Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-24
Washington Ticker
BY CLINTON COFFIN.
Associated Press Financial Writer.

BY CLINTON COFFIN.
Associated Press Financial Writer.
Much Of the mistaken confidence in
the continuation of good business dur
ing the coming months, which persists
In oflcial Washington in spite Of COL
lapsing stock markets, rests on the state
Of prices in the commodity markets
While for months stock shares Of liter
ally all classes have been playing up
and down price scales in a fashion
| transcending performance in any pre-
vious boom, commodity prices have not
only remained unaffected, but have
even tended rather steadily downward.
In 1920 and 1921, when the last great
market-break period was witnessed, the
security price falls were accompanied
by sweeping downward revlsions in val
ues of grain, cotton, rubber, sugar, cop
per and all the myriad types of finished
goods prepared from these staples.
Today the wholesale prices Of the
great raw commodities and the finished
goods based on them, on wholesale mar
ketS, are unquestionably on the rock
bottom presented by cost of efficient
production under conditions Of compe-
tition, with stocks on hand, in nearly
all divisions, at rather unparalleled low
points. Probably the best indication Of
this is the Labor Department index Of
wholesale prices, which takes into con-
s!deration the wholesale selling prices of
$50 commodities, worked out to use the
price base of 1926 as 100. BY this
standard, the average wholesale prices
for September in the United States are
represented by the figure CTS. A series
of other indiceS maintained by various
organizations over the country give an
even lower calculation, but all point to
the conclusion that wholesale values, on
which business Is done, are devoid of
the slightest imitation.
Indeed, there is some ground for
considering that wholesale prices dur
ing prolonged periods of peace tend nat
urally downward from the effects of
the application of science, invention
and management to production" re-
marked Ethelbert Stewart, who, as
commissioner of statistics for the Labor
Department, works out the commodities
study. I'VE took 1925 as a base for
price studies, because it was the first
full postwar year OF rather normal
outlook. Yet we have found that COM
modify price averages in nearly all the
period since have tended downward, and
in a pretty even fashion"
With this sort of a business situa-
ton, practically all observers who hold
business cannot seriously slow up in the
United States, because consumption is
right on the heels of production in
many lines. Particularly has increased
expedition In rail service Solidifled the
trend in modern business toward hand
to-mouth operation. Five years ago less
than a 90-day supply of coal above
ground was considered slightly hazard
GUS by the great consumers. Today few
stock piles will take care of needs for
80 days. The automobile industry Is
deliberately organized to keep raw ma
terials arriving by train and boat on
the same day finished cars go out of
the factories.
Some Of the calculations as to sugar
indicate that supplies on hand Janu-
airy will represent only five days con-
sumption for the world, and while grain
statistics are complex, the world evil
IDENTIFY will sail closer to limits of bread
in sight before the Winter is over than
1t has ever done. There are stocks of
petroleum probably larger than any
ever built up before, but production is
internationally tending downward and
prices are well down toward lows for all
time. Commerce Department studies
show that through the whole field of
distribution finished goods stocks are
habitually kept at point as low as in
StCao1ASAy VApcAI management can !yeL
them.
These are some of the facts in the
official point of view, which holds that
the stock market isn't barometrical at
all in periods like this for people who
depend on general business.
Latest figures on coast-to-coast air
travel indicate that the possibilities in
that field are still experimental. The
TranScontinental Air Transport, which
operates in conjunction with the Penn
Sylvania and Santa Fe in the New
York California service, resumed last
September after one bad accident in
two months and found that while it's
passengers came back In the six or
seven weeks since their numbers haven't
much increased.
Our travel volume hasn't changed
much" Paul Henderson, operating vice
president, said Of the showing. 1T
runs to about 40 per cent of capacity,
and has held at that point very
steadily"
1t should be understood in connec-
ton with this estimate that 100 per
cent Of capacity in a passsenger-carry-
ing service is probably not attainable.
Railroads have generally figured that
80 per cent is top. At any rate, the T.
A. T. service is financed to continue
for a year yet, even though operating re-
suits run into red ink continually. The
real problem in the field wolves around
the public attitude and the ability Of
its operators to demonstrate that per-
Sonal hazard Is not a serious factor.