Safety First

The present trade expansion is of a fundamentally different order. Our dwindling exports reveal the fact that rising prices are due almost entirely to domestic demand, and not to foreign purchasing. It comes on a money market of vast unused resources and thoroughly deflated condition. Furthermore, all our Babbitts have learned the value of conservatism by bitter experience in recent years, and it is doubtful whether the unreasoning Moody and Sankey attitude toward increased production which swept the country the year after the Armistice will soon be repeated. A safe and sane rather than a delirious prosperity should be the result. The financial editor of The New York Times very soundly compares prospective conditions in 1923 to the orderly periods of business expansion experienced in 1895 and 1909.

Three main considerations should, however, serve to temper Mr. Babbitt's complacency. In the first place financial conditions in Western Europe, and especially in Germany, are in many respects becoming more rather than less chaotic, and until the credit and currency of this important part of the world are stabilized, America too must suffer in some degree. Secondly, certain fundamental lines of business in this country aro not yet on a satisfactory basis, chief among these being our vast agricultural, coal and railroad industries, and the current housing and rent situation. Thirdly, the cycle of business, now evidently rising toward prosperity, will in the long run inevitably decline again.

In the opinion of competent critics, the building program for the current year is endangered by rising costs of materials. Despite present high prices, still higher ones for lumber, plaster and cement are being predicted. Brick, however, the usually reliable barometer of building material costs, remains stable at present rates, despite interruption to deliveries owing to the frozen Hudson.

Analysis of securities floated in London during 1922 shows that of a total of 573 million pounds British Government loans composed 369 million, colonial loans 58 million, oil shares 17 million, and shipping and harbor securities 15 million.