Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-04-16
MEN AND MONEY
BY NJ. S. Rukeyser.
Copyright. 1927

me widespread demand among Jn1
American people for better products
| in liberal supply, backed by an abun.
| dance of capital and credit and also by
| heightened efficiency in manufacture
and distribution, is keeping up the
| general volume OF trade.
| Prophets of despair have again been
answered by the event. Critics early
| in the year pointed out that the break
| in prosperity would come from a sub.
| stantial letdown in the automotive and
constructive industries, Both of these
| pivotal industries, however. are at
| present proceeding on plane Of high
activity The automotive industry, 1t
| is true. has become increasingly com.
petitive, bat the dominant factors ara
currently reporting record breaking
sales.
After a moderate recession in the
building trades during the first two
months Of the year, March witnessed
substantial recovery, ana current OPP.
erations appear TO be large. Con-
struction contracts amounting TO
$500 73S, 200 were awarded in March
in 81 States east Of the Rocky Noun.
tains, according to a leading sta tisti-
clan. This figure Is $4,000 900 above
the previous high record established in
August, 1926. and represents an in
crease Of nearly 4 per cent over
March, 1926. and gain Of 57i4 per
cent over February of this year. In
spite Of the slump in the first two
months, construction activities during
the first quarter Of the current year
were only 4la per cent behind the
peak record Of 1926,
Construction Is Reflected.
The renewal of activity in the con
struction industry helps TO explain
the record-breaking production OF the
steel trade
Caution still prevails In business,
and the Industries are sharing un'
equally the fruits of present prosper
fy. However, in the strength in the
business situation Is an explanation
Of the capacity thus far OF the stock
market to resist reactionary condi-
tions. Unless business conditions
change substantially, break I'm Sc
curity prices would be more likely
to result from Misrepresentation than
from the influence of the outside world
of barter. Taking their cue from the
trade situation, spectators are dis
eliminating carefully. and are for the
most part favoring stocks OF com
panies which show an improving earn
ing power.
The tendency Of commodity prices TO
drift irregularly lower increases the
burdens on management.
The announcement that sales OF 621
department and other retail stores in
March were Is per cent smaller In
dollars than in March, 1925, reflects
q decline in commodity prices rather
than a shrinkage in the physical vol
ume of trade.
According to Prof. Irving Fishers
index. commodity prices are tending
to steady, after having declined for
many months. The average OF goo
representative commodities. though
higher than three weeks ago. is still
4A per cent below the best 1927 level
In so far as the decline Of wholesale
prices is reflected in retail quotations
the public benefits Unquestionably
falling prices in recent months have
released funds for extra purchases and
for investment.
Continued Easy Money.
The prospects for the remainder of
the Spring are for continued easy
money. After July seasonal expansion
of commercial borrowings, In antici.
patton of a substantial Fall trade,
there may be some moderate stiffening
Of interest rates.
Europe has been an experimental