Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-10-02

REAL ESTATE
BY THOMAS 8. HOLDEN.
Vice President In Charge of Statistics,



Vice President In Charge of Statistics.
F. W. Dodge Co.
The business cycle isn't what 1t
used to be. IT Is the victim of its
own folly. 1t has permitted itself to
be caught, isolated, analysed. dis
eected in thousand laboratories
mapped, plotted and charted ad in
fnitum. AS a result. 1t has lost much
of its old time potency as regu
lator and prognosticator OF the ups
and downs of prosperity and depres-
sion.
1t has permitted it's habits and
characteristics to become genera lily
known, and has thus given into the
hands of it's enemies the means Of
avoiding it's effects. BY giving us
the understanding of it's advance
warnings of EMBELLISHMENTS and un-
healthy tendencies i'm business. It has
given lis the means of correcting the
djustments and unhealthy tend
encies before they result in serious
or widespread harm. In addition to
permitting this almost fatal famili
aritN with It's inside workings. 1t has
In the recent past received a knock
out dose compounded of augmented
wealth. increased national income
and stupendous and widely dis
trihuted prosperity
One interesting modificati ton Of the
business cycle can he seen In the
postwar construction record for
New York City. Since the war the
old style 40month cycle has changed
into a 24-month cycle The end of
each odd numbered year G9l9. 1927.
1923 and 1920 has been the crest
Of wave of construction contract
letting. and the ends of the even
numbered years have all been periods
Of rela lively low building volume
This tWo-year cycle has up to the
present been observed only in the
records of New York. 1t may he
temporary. or it might conceiva bly,
develop later in other sections Of the
country. Apparently, 1t will work
out this year. giving reduced vol
ume of contracts for New York City
In the second half-year, as compared
with the first half
Fall Upturn Feature.
Another shift in the business cycle
has been the tendency toward an
upturn in construction contract vol
ume in the Fall months Of each year.
after a slackening in the Summer.
This has taken place in each of the
past FIVE years, and appears to be
taking place at the present time
Last year the Fall upturn started a
couple of months earlier than usual
and took on the proportions of full
sized boom.
The contract totals for the three
calendar years did not vary greatly
from each other. The writer estj-
mates the entire country's contract
totals for the three years at S3l42.-
100000 for 1919, $3.33S 900 100 for
1920 and $4,000 600, 900 for 1927. In
1920 there was s per cent increase
over 1919; in 1921 decrease of per
cent from 1920. During the three
year period the monthly contract vol.
umes averaged around S265 900 900.
This figure may he conveniently con
Sidered as the normal monthly con
tract volume for the United States
during the first phase tor first three
years. Of the postwar era.
During this entire first phase. with
It's violent fluctuations between boom
and depression. it's hysteria Of inha-
ton and subsequent panic. there was
present a condition which became the
principal stimulus to the development
of the second phase of post war con
struction development. This was the
building shortage. 1t was only after
the purgative processes of dchation
and depression that took place in the
first phase that the country was ready
to make real progress in catching up
on the shortage. The revival of build
ing that started in the middle Of 1921
was carried forward with a gathering
and increasing momentum. The year
1922. with recovery in fun swing. had
$500 600. 600 worth of construction,
an increase Of Al per cont over 1921.
&C.
took place In the transition period he
tween the first two phases of the
postwar era.
Second Was Expansion.
The second phase of the post war
era was the period OF growth. eXpan-
sion, Of catching up with the short
age II consisted Of the wears 1922.
1929 and 1924. beginning auspiciousiy
In 1922 with a construction volume Of
s4.33n 900 600 with it's II per cent in
crease over 1920. ii continued into
1923 with total construction volume
of 81 76S. 600 600. and into 1924 with
years total Of S5.227 n0o. 600. Com
naring these years with the years Of
the first phase. with their monthly
contract average of S2S5 900 600. we
note that 1922 averaged 1851 600. 900 a
month 1929 had 1897 600 900 month.
PnG IVA nHH T4Sh .NHb,N'h a HltIl'l.
Thus the second phase was period
Of steady growth in construction
volume. stimulated by the existence of
an unusually heavy building demand
which was occa stoned by a real short
age in the necessity construction re.
ouirements of the country. One re-
suit of this continually charging &C.
tiVity Of the years 1922 through 1924
was the wiping out of the shortage.
For, taking the country as whole.
all pressing necessity building re-
oulrements had practically been
caught up with by the end of 1924.
An even more important result.
from the point of view of present
conditions, was the very considerable
expansion of production facilities for
construction that accompa MED the
rapid growth in building volume.
New Finance Methods.
Perhaps the most conspicuous ad
vance in construction facilities was
the widespread growth in new meth
DDS of fnanCln construction projects.