Evening star., 1923-05-13
BUSINESS OUTLOOK
PUzzL|NG EXPERTS
Marked Let-Up in Trade Due
to More Cautious Buying
Causes Lower Prices.
MILLS CURTAIL OUTPUT
Postponing of Big Building PROF
ects Has Vital Bearing on
Steel Industry.
MILLS CURTAIL OUTPUT
BY GEORGE II. HUGHES.

by GEORGE II. HUGHES.
Special Dispatch to The Star.
NEW YORK, May 1.-TWO directly
opposite interpretations are placed on
the weeks developments in the finan-
cial anu commercial worlds. Before
stating these contradictory conclu-
sions, drawn by equally well inform
ed observers, it may be well to ex-
anime. with some detail not only the
new developments, but conditions
which have prevailed over a consider
. BILE period.
First, then as to the money market
Quotations showing increasing ease
\ week or two ago 5A per cent was
bid aud 81. per cent asked for sixty
and ninety day funds. On Friday OF
this week bids were reduced to
fcred for all maturities at SD per
cent
Decrease I'm RediscOunts.
The weekly statement of the Fed
eral Reserve banks showed a decrease
IN redicounts for the system of $780,
week of s37.400.0o0. More signiflcan,
atil, this weeks statement establish
ed a new high record for 1928, in total
gold holdings.
Also bearing on the money situation
IL the very firm tone shown in the
market for high grade bonds during
the last few days Bonds which show
ed the greatest strength were the
first mortgage rails and such indus
trials as United States Steel sinking
fund 5s the quotations for which or
dinarily respond only to changes
present or prospective in the charge
for money.
1t may be that actual investors are
not acquiring these bonds, but that
does not alter the fact that the quo
lationS are higher for the kind OF
securities in which capital seeks EN-
Iloyment when it is not needed III
business.
Commodity Prices Lower.
With few notable exceptions. com
:lodity prices show declines over the
last seveu-day period. This is the case
with wheat. corn, -four, lead. copper
and tin. There is no rush to antici-
pate requirements in the belief that
II higher price must be paid later on
These declines, moreover, come IN the
face of no apparent increase in sup
ply. The ease of raw silk is typical
The statistical position Is very
strong. but the market is quiet and
the mills are operating with great
caution.
For the first time since December
the United States Steel Corporation
"eportS a decrease in untitled orders
On Its books. Two reasons are aScrib-
"a Tor the drop. One is the falling
off in buying because of difficulty in
getting prompt deliveries and the
other the higher rate of operation
which allows the corporation to cut
down obligations rapidly.
Big building Jobs Held Up.
Building projects to the amount OF
about $50, 100000 in-And around New
York city have been temporarily held
UP. the assigned reason being exces-
sive costs of la Dor and ma teria1. More
prominence has been given to this
phase of the business situation this
week than to anything ele.
1t is impossible to predict just how
far this movement will go. The con-
tractors. OF course. hope to head off
any demand on the part of labor for
higher compensation and perhaps to
persuade the unions to accept lower
wages Whether they are ready to
continue the Suspension of activities
indefinitely in case the labor interests
stand firm. is a matter about which
there may be two opinions. Mean
while the vital Importance of this
situation to the steel industry is evil
dent.
Curtailment In Mills.
Eight Fall River mills announced
curtailment of operations on the
ground that they were unable to OBJ
tain contracts at a price to meet op-
Grating costs as increased by recent
advances in wages and they could not
see the advisability of filling up their
store houses with goods. This looks
like another buyers strike similar
TO that inaugurated by the contract
ing builders.
However, this dispute and that Of
the builders with their working men
may come out. the only recorded
changes in wage scales are upward.
Moreover. it is announced that the
railroad shopmen VIII demand an in
crease. At least four roads have al
ready granted increases, the benefic-
iaries being Shopmen and mainten-
ance of way men.
There is no evidence of slackened
production in the automobile trade
hut on the other hand the expected
general increase in the price of fin
ished products have not developed.
Business Let-Ip to Increase,
Production generally has continued
-ently, as is shown by the car loading
figures. which. for the week ending
April 2S. broke all records for that
ime of year.
Now, what are the deductions
drawn from all these facts? One is
that there has been a let-up in busi-
ness. which will increase progressive
ly and the effect of which must soon
er or later be evident in business it
self and in the securities market
The other is that the very caution
displayed by manufacturers and mer-
chants, the decline in commodity
prices and the abundance of funds
make for prolonged prosperity on Il
reasonable scale. The outgivings
from Washington tend to support the
latter view. Secretary Mellon is
quoted as saying that the danger of
imitation is passed and that sound
prosperity will continue unless unex-
pected eXcesSes are engaged in by
business.
Copyright, 1927