Evening Star Newspaper, June 23, 1923, Page 15

REAL ESTATE Babson Sees Good Business During Remainder of Year M;zjorily of Barometers Favorable, Says Statistician in Discussing Prices, Credit, | Wages, Building and Other Factors. BY ROGER W. BABSON. Special Dispatch to The Star. WELLESLEY HILLS, Mass, June 23—“Business and the stock market fave been suffering from psycholos! eal depressions during the past six weeks. Many are expecting a repeti- tion of the decline of 1920 in general activity, while others are certain that security values are going to pleces. It s not at all hard to gathér such mpressions if you listen to current comment and market gossip. If we turn to the actual facts on the situa- tion, however, we find things are not as bad as reported. Let us examine the leading barometer of business: . Prices—Commodity prices climb. 200 per cent above pre-war levels b fore they broke in 1920. Thelr pres- ent position is only 78 per cent above normal, and this level has been reached by a moderate, orderly rise Farm products are but 79 per cent above the ten-year average 1900-1910, compared with the inflation of 250 per cent made in 19820. There is nothing dangerous in the commodity situation. ‘There is certainly no ground for fear of another decline such as wé suffered during the year beginning 1920. Calls Fallures Good Sign. Fallures—Contrary to popular beliet, a minimum of failures is a bad sign, while a large number of fail- ures show that business {s cleaning house and points to better times ahead. During 1919 and early in 1920 the percentage of business failures ran at the lowest level reached since they have been recorded. Both num- ber and the liabllities of failures at present are running heavy. This, to- gether with the liquidation of the past two years is pretty good evi- dence that fundamental business con- ditions are growing more sound. Credit conditions—At the peak of the recent boom the national banks had over $12,415,000,000 out on loan. Today they are loaning a little more than $11,500.000,000. In 1920 they were borrowing heavily from the federal reserve banks and were straining all reserves to the limit. Whereas their discounts were $2,827, 000,000 in 1920, they are today bor- rowing but $730,000,000. Money is plentiful. Reserves are strong. There 18 no danger that banks will be forced to cut down loans and slow up bus mess in order to protect their reservei Imports Gaining Rapldly. Imports—Though not as great as in 1920, our imports are gaining ground very rapidly. For the imme- diate outlook this 1s an unfavorable From a long-swing point of View these purchases abroad consti- tute a favorable factor. Eventually Europe can pay Interest and principal only in goods. Increasing Imports at this time tend to relieve the strain on Europe, which is the weakest link in the business chain today. “5. Bxports—The export_ situation, though better than 1913 or 1915, is not particularlv favorable. Although bet- ter than last year, I should still clas- #ify the export situation as one of the few unfavorable conditions. 6. Money rates—A business man can now finance his needs at & per gent, compared with as high as 8 per ‘cent which ruled during a part of 1920. It looks as though plenty of money can be available on this basis for some time to come. ““7. Transportation—The situation is more favorable than it has been for several years. In 1920 there was a car shortage which mounted to a peak In October. Demands at that time called for 147,000 more cars than were avallable. Today we are break- Ing all records in the number of car loadings. The shortage of last fall has been practically eliminated. There xhould be no immediate serious congestion of freight. Handicap in Higher Costs. “3. Wages—Wages have shown vance, particularly in the bullding trades. This is due largely to immigration restrictions. Wages in general, however, are much below the 1920 peak. Certainly there is less inefficiency than there was at that time. Any Increases in cost dus to wage advances will, of course, handi- cap busines: 9. Steel production—The unfilled tonnage in the United States Steel Corporation now stands at 7,000,000 tons, compared with 11,000,000 in 1920, The present level is very satl| factory and shows that buyers are not pyramiding orders but are follow- ing the conservative policies. “10. Gold movements—The increased imports probably _will necessitate some movement of gold from this country, but our present reserves can atand it easily. In fact, the tremen- dous” gold supply which really does not belong here is a constant tempta- tion toward inflation. “11. Building—The combined greed of worker and employer in the build- ing trades has set the brakes on the building boom. ~From the point of view of immediate volume of trade, this is an unfavorable factor. From a long-swing point of view, however, it is not at all discouraging. The in- dustry was rapidly becoming inflated and the slowing-up process merely postpones the necessary building to a time when it will be more needed. It does not take a statistician to total our score. A few of our barometers may be considered un- favorable. The majority are not un- favorable. General business is in a healthy position at about 1 per cent above normal. The figures clearly indicate good business for the most of 1923 3 (Mr. Babson, the noted statisticlan, who is regular contributor to The Star, will con. tinue bis speci articles on I Snanctal conditions o next Saturd, SIX NEW DUNIGAN HOUSES ARE SOLD New Homes Located in Petworth and Fourteenth Street Highlands. Consummation of the sales of six of the new homes recently completed in Fourteenth Street Highlands and Petworth were announced by D. J. Dunigan. In Fourteenth Street Highlands two transfers were made, as follows: 5405 13th street to Charles S. Gunn; 5413 13th street to Mrs. Lettle J. Barrett. In Petworth the following sales were completed: Clarence S. Bruce purchased 4232 3d street. This Is a semi-detached house and contains six large rooms, one bath, and built-in garage; 210 Varnum street to Milton L. Arnold; 220 Varnum street to Frank Tobin. Anton Koerber purchased 4324 4th WESTERN REALTORS TOATTENDSESSON Special Trains Chartered to Bring Pacific Coast Group to Big Convention. Realtor special trains from the eastern and western coasts, from the west and middle west, from the south and from Canadian points have been scheduled, realtor boats from Great Lake ports have been chartered and realtor auto caravans froni tributary cities have been arranged to'bring to- gether the approximately 6,000 represent- atives of every branch of business ac- tivity involving real estate through- out the United States and Canada who will meet in Cleveland next week for a general conference on present business conditions as they affect real tate and for discussion of business practices in home bullding, industrial development, farm development, prop- erty management, the safe and ready financing of real estate projects and the sales problem of making real estate a more readily realizable asset. The meeting will be the sixteenth an- nual conventlon of the National Asso- clation of Real Estate Boards. train leaving San Fran- land June 21 will dential special” to the convention, carrylng President L. F. Eppich of Denver and a convention nucleus of 125 Denver men, which will also be joined by delegations from the terri- San_Antonlo to Seattle be- ves June 23 for Kansas City 0, where there will be stop-overs. The southern Californi £roups, jolned by the Honelulu Real Estate Board's officlal representative, will come to Cleveland by a special direct for Cleveland, starting from Los Angeles on June 23. The Phila- delphia ~ special will be joined by realtors from Atlantic City, Lancaster and Pittsburgh. The New Orleans special, leaving June 24, and joining with it delegations from other south ern citles, will stop over at Chatta. nooga for a picnic on Lookout Moun- tain by the way. The New England special, made up In Boston, will carry delegations from eastern territory. Florida and Georgia will lead another convention group. Sectional Meetings. Seven inner conventions will be tributary to the general continental meeting of real estate men. They will be in each case the organization meetings of natlonal groups of spe- clalists on real estate mortgage and finance, on home buflding and sub- dividing, on industrial real estate, on property management and on farm lands, and of a realtor-secretaries group, and they make up the seven divisions into which the association has this year formed itself. A national conference on protective license laws to insure the general public against irresponsible real es. tate dealers, a natlonal exposition of building ideas, a national competition on building plans for cottage homes, a national competition on real estate advertising and a national home-town five-minute speech contest will be held In connection with the conven- tion. The three great general convention topies will be: The whole subject of finance in relation to real estate, with a study of present real estate condi- tions based on reports from real es. tate boards in 244 American and Canadian cities; the great legislative topics of taxation, zoning and real estate licensing: and the specific steps found best in the developm Individual real estate busine Charles B. Gass and Morris Goldstein have purel L tments, from Randolph T. Warwick. The revenue consideration was $135,000. The build- tainl; ing, which Is four stories in height, sed the bullding at 14th n the heart of the rapid 14th street development. CITE MORTGAGES VALUE AS PAYING INVESTMENT Insurance Companies’ Booklet Proves De- sirability of Real Estate Paper; Return Averages 6.10 for Six Years. A study of mortgage investments!per annum, the statistics show. The of American life insurance companles, Just made by the National Association of Real Estate Boards and now being printed, will shortly be issued to the 20,000 members of the association in the bellef that the findings which it presents constitute one of the strong- est arguments that has ever been put forth for the validity and desirability of real estate mortgages. Investments of practically all the Iife insurance companies of the coun- try for the years 1915 to 1921 are cov- ered in the analysis, which compares the returns recelved by these com- panies from real estate mortgage holdings and from other types of in- vestment. The study is based on data prepared by the Alfred M. Best Com- pany. The analysis was made for the national association by the Institute for research in land economics of the University of Wisconsin, under the direction of Dr. Richard T. Ely, the institute’s head. The rate of return secured from mortgage Investment by American 1ife insurance companies in the period covered shows an average advantage over rate of return from investments and bonds of 1.49 per cent NOW OPENING! New Section—77 Lots Nearby Virginia’s Finest Suburb AURORA HILLS Virginia Well Established Community 40 Beautiful Homes 810 50x135 With pressure in fron each lot. nection to Poto River. Concr tioned in ad. On Easy Terms Buys a Double Lot Water under high Sewer con- walks and all other improvements men- t of Real sewer mac ete Electricity. Terms $25 Cash Balance, $12.00 Per Month Improvements! Artesian water under high pressure. system to Potomac River. Concrete sidewalks. Brick gutters. . This thoroughly developed suburb makes an appeal to discrim- inating buyers. Those who buy FACTS instead of TALK—IM- PROVEMENTS instead of PROMISES—and FAIR VALUE instead of inflation. AURORA HILLS, located just three miles south of the White House, between Mt. Vernon Boulevard and Alexandria turnpike (both hard surface roads), 12 minutes by trolley, Washington & Virginia electric line, from 12th and Penna. Ave. N.W.; 15-minute service; station on property. Low commutation rate. Graded, gravel streets with solid foundation, can be used all vear—any weather. Streets electrically lighted. Large shade trees. , Streets 50 and 70 feet wid, Brick car station with waiting room and toilet facilities. Careful restrictions (no temporary houses allowed). New county school and church to be erected. REMEMBER—You are only paying from 12 to 15 CENTS tomac River. PER FOOT in this, the nearest subdivision in nearby Virginia having WATER under high pressure and SEWERAGE to Po- Come in my office, see photo of each house in subdivision, and then SEE’ THE PROPERTY. WILL TAKE YOU TO SEE THESE LOTS ANY TIME, IT IS UP TO YOU TO SEE AURORA HILLS BEFORE BUYING A LOT FOR YOUR OR INVESTMENT. Branch Office in Aurora Hills Station open every day, 1309 H Street N.W. Walter Branch Office Phon O’Hara Exclusive Agent Clqa_nlon 806-F-14 HOME Phone Main 2450 Phone Main 4928 average gross rate earned on mort- £ages is 6.1, on stocks and bonds 4.6. This gives on the rate earned an ad vantage in favor of mortgage Invest- ments of practically 25 per cent. Particular significance attaches to the showing which the study makes because of the fact that the period covered by the records examined comprises ‘the major portion of a business cycle during which we had one of the most abrupt price move- ments in_the history of the United States. It was u period of great stress, and a test period for Invest- ment security. Comparison of the average gro rates of income earned by the Insu: ance companlies on mortgages and on stocks and bonds is given in the fol- lowing dat; Average grossrate earned— focks. Mortga, 3 1921 Simple aversge PLANS ESSENTIAL TO PICTURE HANGING Walls Should Not Be Decorated Without Idea of General Effect, When a group of pictures are to be hung it is a good plan before begin- ning to hang a siflgle picture to draw upon a plece of paper a definite scheme of arrangement. ° If many pictures are to be hung upon the walls of a room this is even more necessary. The principal point to bear in mind when drawing up this plan is that each wall, to give it unity, should have a certain point of Interest to which the other pictures on the same wall gradually lead up. One wall will generally and should always be more important than the others and dominate the room. A wall is never quite successfully hung unless it is designed with a view to both color and form. While it may resolve itself into either a compos! tion in color, a picture very high in tone occupying the central position feading away to those in lower key, or a design of line and mass, the | plan ought always to be made with | a view to striking the just balance between these two element; —_— 1 Ernest M. Fisher, new stant secretary of the National Association of Real Estate Boards, took up his work at _Chicago headquarters June 13. Mr. Fisher comes to the associa- RIEAL ESTATE BUILDING TRADES SHORTAGE BLAMED UPON EMPLOYERS Labor Department Steady, Decline Studies Reasons for in Skilled Con- struction Craftsmen. The present high{wage scales in the bullding industry, which add so much to the cost of construction are blamed by the Department jof Labor, largely on employers competing for labor and not on demands of theiworkmen. A contractor wishes to push his work faster than the number of men which he has will permit, and o he offers a us above the agreed &cale, says the department, This attracts workmen from other bulidinig jobs and the com- petition forces wages up. : For some years past it has been evi- dent that the number of trained work- | ers in the building trades has been fall- ing off, and the' present activity of the ;nihmry has made the shortage keenly elt. Lack/of Craftsmen. “A number of efforts are being made to increase the number of trained work- ers.” says the department. The scarcity is due partly to a change in the charac- ter of immigrants and partly to the non-adaptability of the old-time ap- prentice system and partly to modern conditions. - The tide of skilled crafts- fuen from Europe, which for so long pplied our needs has practically ceased, and there seems little prospect of its restoration, so attention i= mainly directed toward the apprenticeship problem. It is estimated that merely to make up the losses from death and retire- ment, the building trades need some 35,000 skilled recruits annually, but in the fact of this need the apprentice system has almost ceased to function. There have been several reasons for this apart from the alleged opposition from unions to apprentices, an opposi- tion which in the building_ trades does not seem to be strong. The contract system of bullding is not adopted to the needs of apprentice training, and many contractors say that they cannot be handicapped by the necessity of training their workers; they need men who know their work and can do it, not learners. “Even when so-called apprentices are taken on, there is usually little if any provision’ for seeing that they are trained, and the boys too often get only what they can pick up for them- selves, or if they learn to do some one thing ‘well, are kept at that instead of being glven an all around training. Partly because of such difficulties and | partly because of the seasonal irregu- larities which makes high daily wages count up as small annual incomes, men already in the trades have not beep anxfous to put their boys in, and re- cruits from outside have been few. “Efforts during the year to provids training for new workers have been along two distinct lines. One group has taken the ground that apprenticeship fo the old sense s unnecessary, that it je better to begin with older boys and | men, and that for these a short inten- sive’ training in the clements of the trade s all that is necessary. “Such plans are looked upon with disfavor by a number of bullders who maintain that the only result will be | to increase the number of half-trained | workmen already in the trades—not to turn out the skilled craftsmen £o urg- | ently needed. A four-year apprentice- | ship is none too long, they say, to give | the worker a knowledge of his craft in |all its detalls and to get the skill and | power to secure desired results which | characterized the old-time workman. Consequently vocational schools are be. ing pushed and plans for a genuine ap- prenticeship system are being carriod into effect in a number of citles. “"Training beginners is bound to take |a long time but an immediate effeot |can be produced by a better utilization of the work of those already in the trades. Consequently during this vear | the campaign for extending the build- | ing season, for a better planning of the [work, and for a general increase n lefciency has been pressed. This has been pushed along about the same lines as in the past two or three years. One | rather interesting suggestion that has | been put forward wans that the south | should definitely adopt the winter as | 1ts time for building, so arranging dates that the bullding worker might travel southward with the season, thereby In- suring a full year's employment. There are some obvious objections to creating a new class of migratory workers, ana |as vet little appears to have been done along this line. |~ “Apart from these movements di- | rectly " concerned with the building | boom and the supply of labor, there have | been_indications in the industry of ‘a | determination to pull Itself together {and to direct its growth along well con | sidered lines, instead of continuing the haphazard development of the past.” Massachusetts Park Washington’s most beautiful residential section of detach- ed homes. Containing seven million feet of forest-covered land, with six miles of improved streets. Includes what remains of “The Triangle of Increasing Values” between Connecticut, Massachusetts and Cathedral avenues (Woodley Rd.). Over four million feet of land sold. Over ninety homes from $15,000 to $200,000 built and under con- struction. Wooded villa sites, lots and central and side hall brick homes, with lots from 50 to 115 feet front—Park Office, 32d and Cathedral Ave. (Woodley Rd.). Middaugh & tion from the Institute for Research | in Land Economics and Public Utilities, University of Wisconsin. Woodward Building, Established Shannon, Inc. }ls.sh and H Sts. New Homes —for— . $600 Cash Payment Stop Paying Rent---Be a Home Owner 18th and East Capitol Streets See 'Tfiem, Today or Sunday The only new brick homes of the size at this price, six rooms, bath, deep yard to an alley, paved street, first-class neighborhood. Right opposite new Eastern High School. ONLY FOUR LEFT ,.,;,,Mcxn-acoss - ervice (EXCLUSIVE AGENTS) 1415 Eye Street NW. MEMBERS OF WASHINGTON REAL ESTATE BOARD