The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-01-02

Continued
currencies stabilized, and the same
important step there will not in all
probability be much longer delayed
This assurance of stabilizing values
will greatly benefit international
trade.
In banking there has been a
steady piling up of deposits to a
peak for all time.
Under the condition of slackening
business activity, the problem of the
banker during 1927 has not been Sc
much one or commercial credits as
of how to keep this flood of money
working safely in other channels at
a sufficient return to leave him any
margin over what deposits cost.
Too many have strayed from safe
paths, lured by the temptation of
high interest returns.
The result has been a shocking
list Of failures, particularly of small
and moderate sized banks where
the management lacked either the
experience or sound banking in
stinct to discriminate in varied
credits.
In view Of the above generally
admitted facts as to 1927. what if
anything can be safely predicted as
to business in 1928?
Some careful students of economic
trends, down for considerable part
of 1927 under conditions that make
a revival of activity probable, and
by this they do not mean the mere
seasonal revival which nearly always
characterizes the early months OF
a new year.
U2swing to Continue
They point out that downward
swings Of the more important items
Of industrial production, such as
steel, railroad equipment. textiles,
usually follow periods of inventory
accumulation induced by advancing
prices.
But during the greater part of
1927 the trend of wholesale prices
has been downward.
There has been, in consequence,
no accumulation of inventories and
the current low rate of operations,
particularly in iron, steel and allied
industries, indicates that shortages
are in the making.
For this reason, Colonel AyreS
concludes that the upward swing
IN business activity, which he thinks
is at hand. will continue through
1928, with perhaps a slight tenn
porary Slow-up in the third quarter,
and probably will continue into 1929.
He thinks further that it will not
only be period of rising business
activity, but of good profit.
Prices to Increase
He and other economists Of like
opinion base their forecast on a
formidable array of conclusions:
%. The easy credit situation will
continue, QUESTIONING every decline
and prompting every advance" as
Brookmire puts it.
(2). The trend of commodity
prices is likely to be upward. The
low levels of stocks of most basic
commodities in proportion to sales
indicates the pressure which demand
will exert against supply as con-
SumerS require more finished goods.
80. Employment probably will
improve as the year advances and
industrial wages are likely to re-
main firm. The resumption of pro-
duction by the Ford Company
alone will measurably increase de-
mand for labor and raw materials.
Much Building Predicted
"a. The reduction of the National
debt in 1927 and 1928 together with
the proposed reduction in Federal
taxes should both afford some
stimulus to business, in that large
volume of capital is released some
of which will find its way into in
duStry.
90. All the indications point to
a continuance of the amazing activ-
ity in building and new construction.
The contracts already let insure this
at least through the next six months.
co.. Automobile output, after its
Is per cent slump in 1927, is pre-
dicted to exceed all previous records.
Cd. The condition of the farmer
distinctly is improved. His problems
are not all solved, but if the poll
ticians will stop trying to make
capital out of his troubles, he bids
fair to work out of a difficult Situa-
ton by his own energy and good
sense.
Car Loading Decline
The less optinlietica1lv disposed
point out that these ~conrfdent fore
casts of the business prospect for
next year are based on the same
foundations which cruInbled I'M
expectedly beneath the feet of the
forecasters when they were laying
out the horoscope of the second half
year now closing"
One shrewd observer has COM
mented on the fact that in the face
of all the talk about hand to mouth
buying and consequent reduced in
ventorieS, which ought to make for
prompt collections, he has known
few periods when collections were
slower.
"