Evening star. [volume] (Washington, D.C.) 1854-1972, 1937-11-13
SEER FORECASTS
BUILDING BOOM
Upward Cycle Has Not Yet
Run Its Course, Expert
at Columbia Says.

A. building boom is predicted by DR..
Benjamin Haggott Beckhart, associated
professor of banking in the Columbia
University School of Business, who in
a survey of economic conditions ex-
presses the view that the present bust
ness recession will be short.
"In any long run forecast of bust
ness conditions it must be remembered
that we have not made up the def
cheney in housing, which will become
more acute as time goes on and which
will be reflected in sharp increases in
rents" DR.. Beckhart says in ANNOUNCE
ing the organization of a banking
seminar at Columbia in which bankers,
economists, and educators will par
ticipate.
"As rents increase, residential build,
Ing construction will be resumed,
which for the time being has met
resistance from the rising costs of
labor and materials. Building costs
which seem high now may later appear
low after the rise in rents has taken
place.
Might Be Wrong, However.
"One must always hold in mind
that forecasts Of the immediate and
future course of business can be radi-
cally changed by political develop
ments at home or abroad. A general
world war or repressive legislation
enacted by Congress would distort the
entire picture.
MY prediction is that the pattern
over the next few months will resemble
that of 1884 rather than that of 1929
80. We will likely have short recess
sion lasting a few months which will
be followed by an equally sharp re-
covery. 1t does not seem possible that
we have run the course of this business
cycle. We have not made full recovery
from the great depression, nor have
we made the same relative progress
as foreign nations.
THE characteristic feature of the
recovery period will be increased &C
tivity In the durable goods industries
and building boom. Both will be
oeAiiol1tCd Wy Vic INV AatCo VI lllUCl COT
and by the plentiful supply of credit.
Even If the budget has been brought
into balance and imitation from that
quarter checked, we are likely to have
the same type of business imitation we
experienced in the 1920s And there
is strong probability that monetary
tools will be used very tardily, if at
all, to restrain the boom.
Usual Symptoms Missing.
"The inf1ationary possibilities in the
monetary policies adopted have so far
been held in check by the fears of
war and Of governmental restrictions
on business. The usual symptoms of
an end of period of prosperity, in
GLIDING credit stringency, large in
ventories or excessive activity in the
capital goods industries, are lacking"
A factor inducing the maintenance
OF low rates of interest is that business
and agriculture have been adjusted
to the present level, Prof. Beckhart,
co-author of 1.-THE New York Money
Market" points out. "Installment
finance companies, real estate develop
ment corporations and the powerful
agrarian groups would be expected to
oppose any tendency of rates of in
terest to harden" he continues.
Fiscal needs and the opposition of
business interests will make very diff
cult any reversal of the present in
terest rate policy. The artiflcially low
rates must be looked upon as the con-
sequence of those monetary policies
which have been followed by the ad-
ministration and which have involved
gold devaluation, the purchase of sill
yer, and the open market operations
Of the Federal Reserve Banks. They
are not natural rates and cannot con-
tinue indefinitely. In time, rates Of
interest must rise, just as every period
Of imitation must come to an end"