Evening star., 1927-12-31

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many facts going to prove that 192
was an unsatisfactory year to set vi
a claim of good corporation results.
There are, of course. notable eXcer
tons in the automobile trade, in tn
net earnings of chain stores. nationa
distributors, food and tobacco produc
companies. the public utilities and II
a scant half-dozen railroads. Agains
this we have a score of leading indus
tries whose net income in the frs
nine months of 1927 ranged from 6 pei
cent to nearly 60 per cent under tha
of the same period in 1926. This in
cluded such important lines as iror
F. and steel automobiles, coal and coke
| railroad equipment. oil production and
refining. machinery. building materi
ais and nearly the entire range OF
metals,
Wages and Salaries High.
Less vocal. but more influential. In
carrying the country along through
| the year has been what may be termed
| the well.to -doness OF the average
| American wage Garner and profession
al man. His share in the gross prof
| its of industry has been higher than
| ever. His employment has, for the
most part. been steady. He has had
money to save or TO spend. With a
stationary or perhaps slightly higher
average wage scale than before. his
cost of living in the past two years
| has declined.
The effect of this situation has been
that of creating the greatest purchas.
ing power in the history of the
country, part in essentials and part In
| non-essentials. but whether the one
or the other. creating business and
helping TO keep some one beside the
actual buyer at work.
There are unhealthy elements In
the present liberal spending habits of
the American people, whose tendency
10 mortgage the future is greater tha II
ii should be. However, 1t Is the
writer's opinion that prosperity based
on the absorption of liberal share of
corporation profits by wage earners
is more perma nent prosperity than
that which comes from the abnormal
earnings of great many different
industries and Is distributed TO stock.
holders. There is not likely TO be so
great a swing back and forth in the
business pendulum in the former case
as in the latter.
The fact that there is today such
tremendous buying force in the
country. together with such large saw.
ings deposits, such great volumes of
new insurance, such real estate activ.
tty. especially in the form Of home
building. and in the absorption Of all
classes of securities as TO prove that
the population, as a whole, is making
money. although the commercial
statistics are not particularly crafty.
fyaer - hA Ia AstR L
interests.
Politics a Business Factor.
The period since 1924 has been one
of the most placid In the political his.
tory Of the country. Given political
inactivity. condition OF business pros.
perity Is likely to result. One OF the
great unknown quantities surround.
ing the 1928 business situation is the
coming presidential campaign. It is
the confidence OF the conservative in.
terests in an administration that keeps
business moving forward on an even
keel.
There are bound to be significant
movements in the business and fna n.
cisl affairs Of Great Britain, France
and Germany In the next IL months
business believes IL is very necessary
that during this period the United
States should have strong govern.
ment and one that is willing IN act
sympatheticaily with European
policies
This brings forward the question
OF gold exports not only 10 Europe
but to South America a prospec,
that has been facing the United States
Tor some time and one that In i'm.
portant In that IL may mark the end
OF the period OF easy money on which
the security markets OF 1927 have
been founded.
II is not unrea sonable TO expect
tne shipment Of between $50. 900 900
and $7b 900 900 in gold 10 Europe in
The next 3 months. This sum might
he considerably enlarged in case
France suddenly decides to stabilize
her currency and at the same time
draw down her balances In London
and In New York The question
~ gold exports, therefore, has ceased
70 be academic and may be put for.
ward as one having an important bear
Ing on the financial history Of 1928.
Continued Cheap" Money Likely.
II is true that the shipments 80
far made 10 Europe. South Americn
and Canada have had no unfa vorable
reaction In the money markets Of
This country. II viii take some
time for them to produce an effect.
because this may be minimized
through the operation of taking more
government securities into the port
foIios of the Federal Reserve Banks
from the open market. IL might
hlsn he Immediately checked through
lowering III the Bank of Engla nj
disc"ant rate. This Is one ~ the
most probable Developments of the
Eew year.
With the cuitsilrnsnt Of business on
the present scale IL seems probable
that the reservoirs Of capital avail.
able for speculation Or Investment
viii he fed more rapidly than they
are drawn upon by foreign markets.
and that the rate ~ money through.
oni the fifst half Of 1928 viii he
relatively low,
Let az take look at events Ia the
world this year AMI others possible In
1923 that have had or are likely 10
have an effect on the mhrkeis for
American goods and securities.
Great Britain ls recovering slowly
from the industrial bl0~ II received IN
he coal miners long strike, IIer CON,
nefcisl position has improved snd
/ with u her financial status In
November her exports were 4s7, 500 =.
900 mare than the year previous ard
nearly $50 900 900 in excess 0f 1895
/ She is siiiI, however, facing serious
competition from the continent ~
Europe, where wages sre lower ami
sko hs nges more fs syorsbis 10 the pro.
dBction and distribution of goods.
Germany has been through d year
of excessive speculation in securities
followed ny el1w liquidation IN
| them. 4 constantly growing irritant
/ In the way of higher living costs
| II aDd taxes bears hess gjiy on the work.
| Ing classes IL IL not unlikely that
| 1874 viii witness disturbing labor and
| 5naBsfs4ai a1Hnsliuna ta fsAFnaanH 40