Evening star., 1927-02-15
MEN AND MONEY
By NJ. S. Rukeyser.
(Copyright. 1879

At this period of midwinter lull in
trade American business men have
expressed keen interest in the ques-
tion, "H6w long will prosperity last!
Unfortunately. no one has yet been
able to formulate an infalilbie tlme
table concerning business movements
OF tho future.
Ten thousand and more individual
fortunes and the welfare or tens OF
millions of workingmen are tled up
in the answer to that simple inquiry
which was raised by several thousano 10
business men who were asked what
problem was uppermost III their
minds.
A. w. Shaw, publisher of System
in attempting to find the answer
sought the cooperation of l,5Oo KEY
business men. Ills formulation or an
answer is, therefore, composite
viewpoint.
1T seems" says Mr.. Shaw, from
q bit of analysis of the underlying
trend that the factors largely respoh
sible for the well balanced actiNitN oi
1926 are to. in the main, prevail our
ing this year.
likely tn Continue.
"And therefrom ! think 1t IS pos
sible to shape an answer 10 our ques
tion. How long will prosperity last
That answer would he about thlS'
.Our nrosperity is likely to continue
during 1927 AS | say, no one can
reasonably expect an answer III terms
of probabilities beyond 1871.
"pf course. such An answer uo%S
not pretend To eStahilsh thht tne pt'
able degree of business actiNltA III
1927 viii be exactly as superiatiVe as
in 1905 pr0D0 DIN ii
will not. as a matter Of fact. prove
10 he as superlative but 1t can turn
out to he that and still he well above
the degree of activity indicative or
q normal year.
1T looks, barring the totally uneA-
pected. az If it would continue-tnat
1927 is to be:
"A GOOD wear for good management.
Last wear. domestic business ana
trade on the continent of Europe Wei~
artificially stimulated by the WITH
drawal of the British from production
for period The British general
strike in the Spring was short hVed'
hut the coal strike lasted almost to the
end of the year. 1t diverted business
to competing countries. and gave arti-
fcial stimulus which will no doubt
he lacking this year. While the Brit
lsh miners remained inactive foreign
ers literally brought coal to New
castle.
Another variable factor is likely TO
be the construction trade. Ihere Is
some evidence of an attempt to slow
up the construction of urban building,
but, if this develops, il may to some
extent be offset by other types of con-
struction activities. such as road build
ing. the extension and development of
public utility plants and of public
works.
The automotive trade, which reached
peak sales in 1926. is another pivotal
industry Can it keep up the record
breaking pace of last year? The opti-
mists are stressing the large replace
ment demand the tendency of well-to-
DO families to use more than one car
and the increasing foreign demand.
In all discussions of business pros
poets the bolstering effect Of continued
easy money needs to be emphasized.
Thus far cheap money has not been
used to initiate commodity prices.
Wholesale prices actually declined 10
per cent last year, and thus far have
shown no tendency to stiffen.
Credit has been used to finance con-
sumption on an unprecedented scale.
The whole system of business enter.
prise has been radically changed. Con
ventories, instead of the producers.
Business men are buying from ha nd
to mouth, and manufacturers are at
tuning production to demand
BY means of credit, applied in the
form of installment purchases, con-
eumers are taking over the country's
goods, using them before they fully
pay for them.
As long as the circle is complete,
the system functions smoothly The
rising standard of living. facilitated
by cheap money, Is the driving force
behind the enormous volume of busi-
ness during the present period.
Prosperity Overexploited.
One of the keenest observers of cur
rent conditions. whose name may not
be used, told me that the one aspect
which he does not like is the evidence
that prosperity is being overeXploited
There is a general rush to keep up
sales-to maintain volume, even at
the sacrifice of profit margins. II
that trend continues, conditions in the
forthcoming months will be in general
move favorable to the railroads tha n
to industrial corporations, beca use the
railroads have the benefit of fixed
prices. and will prosper as long as
the aggregate volume of business is
maintained.