Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-07-23
FAVORABLE TRADE
FACTORS ARE SEEN
Wall Street Expects Usual
Business / pturn by
Early Fall.
BY PRESTON S. KRECKER.
ecial Dispatch To The Star,

NEW YORK, July 23.--Wall Street
today is talking of prospective recov-
cry in business.
Whether that more cheerful feeling
is merely an automatic reflex of the
recent rally in the stock market or
whether it is the result of sound
economic reasoning is perhaps de-
batable point. In either case there is
quite a general impression that this
month will experience the worst phase
of the depression and that with next
month the beginnings Of an improve
ment will be perceptible, which will
continue progressively at least through
early Autumn.
Favorable Factors.
While the wish may be father to the
thought" there are more substantial
reasons than mere hopes that justify
at least moderate optimism regarding
the future of business Here are some
of them:
1. Liquidation of inventories.
2. Lowest wholesale prices in IA years,
which have been followed by decline
3. Cheapest money since. 1915. Wall
Street has not seen Il per cent call
money since January and February OF
that year.
In addition to those fundamental
factors, which lay the foundation for
an improvement in business, seasonal
forces also are expected to operate in
favor of expansion in the next few
months. A recovery in trade and in
dustry next Autumn would be In accord
with precedent for years past.
Business always has picked up in the
Fall months. There are logical reasons
why it should. One is the change in
the weather, which quickens demand
for Seasonal products, such as heavier
wearing apparel Another is, the crop
movement. The two big money crops
of the country-wheat and cotton-are
moved in the Autumn months. They
create freight traffic and money turn
over, which combine to stimulate trade.
The crop movement puts farmers in
funds, with which they make their sea-
sonal settlements. There is no, reason
at all for doubling that the usual an
nual business cycle viii be experienced
this year.
The larger question is whether the
prospective improvement will be a mere
flash in the pan or whether 1t will mark
the beginnings of a permanent change
for the better. So many factors enter
into the situation that he is a bold
prophet who makes any prediction with
confidence when the longer pull is con-
sidered.
Foundation Laid.
Undoubtedly the severe defation in
prices has laid the foundation for such
a recovery, A mistaken view is held
by some pessimists that business can
not prosper when prices are low. That,
of course, is fallacy While business
Is depressed when prices are In a de-
cline, 1T can and does pick up after
they have been stabilized.
Two developments this month may
prove straws pointing the way the wind
blows. Building contracts awarded so
far during July have reached the
largest aggregate since July, 1929.
Since the decline in building construc-
ton has been one of the principal
causes of the depression, that is a sig
nihcant development. Another favor
able point is that a substantial increase
in automobile construction is reported
to be projected and may already be un-
der way.
One thingtis certain-big business is
not holding up expansion plans be-
cause of the depression. One of the
biggest oil consolidation deals in history
is IN process of being worked out. The
steel industry, despite the fact that cur
rently 1t is operating at not much bet
ter than so per cent of capacity, is
spending millions of dollars to build
bigger mills. The natural gas industry
Is enjoying a truly phenomenal growth.
(COpyright. lQ30l