The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-07-05

Forcing trade we may eliminate
as a factor in shaping our own eco
nomic life in the immediate future.
This leaves public spending and
private heavy goods industries to
be included.
There is no force apparent now
which would justify us in Supposing
that business would be more brisk
for the balance of the summer than
it has been.
There is, however, every reason
to believe that business will resume
it's activity with the coming of fall.
The chief reason for this is to be
found in the governments plans.
Bank Reserves Mount
A great deal of reliance is
placed by many business men
on the mounting reserves in the
banks. Bankers have now vast
funds to lend. They are certainly
eager to lend their. Some bank
ers think the jam can not go on
forever and that presently Dor
rowers will begin to turn up. If
this happens it must come from
one or all of three sources:
l. Replacement in industry. Fac
tories have been wearing out their
machines. Even machines standing
still grow old and worthless. There
must be many factories in need of
new machinery. The moment must
come when obsolescence must be re-
paired. Has that time come yet?
2. Under the NRA many in
dustries made it difficult for manu-
facturers to buy new machinery.
This was part of the plan to restrict
production. That is past. Perhaps it
will release some machinery-buying
energy.
3. The other source of borrowing
may be on real estate. The new
banking bill, SO bitterly fought by
Senator Glass, has a provision per-
hitting national banks to lend up
IS per cent of the value of property
on 20 years terms amortized This
has been included at the request of
smaller banks. 1t may make money
easier for house and store rehabilita-
ton and new construction.
May Start Credit Flow
1 think the provision very
one. But that is not the
point here. It's effect may be to
start a little flow of credit.
A more powerful force for credit
may be seen in the construction in
dustry, but not, fear, for the imme-
date future. 1t is not likely to de-
velop in any effective way until
next summer and even later. 1 be-
lieve a housing shortage is in
course of development. 1t has not
become acute yet. But it will pres
emily be felt.
During these last five depression
years, houses have been wearing
out. We knock down thousands of
homes every year for one reason or
another. Scores of thousands have
been burned down. Thousands more
have been abandoned because they
were finally at the end of the trail.
Meantime we have not been replac-
ing them. In many communities We
have been destroying more houses
that we have been building.
In the next 10 years we will have
to build 100000 houses just to
take care of population increase and
replacement, to say nothing Of en-
abling people to keep up with the
Jones and with the scientists who
keep inventing new things for
houses. This housing market will
develop. If left to itself, it may
take some time. 1t will develop
rapidly if some impetus can be given
to business from some other quarter.
At the same time it may be that
new industry is in sight. That
is the fabricated house industry.
This is developing with rapidity
little observed by the general pub
lie. 1t may burst on us at any
moment. However, these things, as
already pointed unit, will not make
much difference in business in the
next six months.
r.