Evening Star Newspaper, August 15, 1925, Page 19

ST y ___THE EVENING STAR, WASHINGTON, D. C, SATURDAY, AUGUST 15 1925. NOTES THE CHANGES IN FLOW OF GOLD Discussing U. S. Business, Babson Also Stresses Wage Cuts and Price Reductions. BABSON PARK, Mass., August 14. —Roger W. Babson states that three very significant events have just hap- pened which, he believes business men and investors should carefully con- sider. These three features are: (1) Changes in the flow of gold; (2) wage cuts of 10%: (3) important price re- ductions. © In discussing these three events Babson states Higher Interest Rates Probable. The balance of trade—that is, the nce between the merchandise the United States buys of countries and that which foreign countries buy of the United ates—was for many years in favor of the foreign countr Some years, such as 1871 and 1 this balance was very much against us, although it gradually working around in our favor. During the 10 vears pre- ceding the war, the balance of trade was in favor of the United States cept a few months during the year 1909 and 1910 and again during the vear 1914 as shown by the following Mr. airr which foreign nce of figures in foreign trade. United millions of dollars: 19131914 54 ¥ 5034 560 *Imports of mercha Situation Changed by War. With the declaration of war by Germany in 1914 the situation was changed, and every vear since then has shown a balance in favor of the United States. This balance has run from a minimum of $324.345.000 to $4,016.061,000. As these balances, to gether with the invisible balances rep- resenting shipments of securities, etc. between nations must be paid in gold, this has resulted in the accumulation of a vast quantity of gold in the United States. Today the United States holds about one-third of the total gold of the world. As our currency is based is, for every $10 or #old there may be issued $100 bills—this has made possible the issuance of a large amount of paper money in this coun- try. Of course, our paper money is not like that issued in Europe, which has almost no gold behind it; but we have not gold to the full value of our bil This means that nding goaper money in this increases at an even more rapid rate than gold increases, and so n may roll up like a ball as our supply of gold grows 1d_supply largely ac- w money rates at the rge amount ailable for home omobiles and luxuries of in counts for the present of money building, all kinds U. S. For ping Gold to Europe. t the first time since the ited States is now ship- Europe. This means that nce of trade is temporarily us. This is caused by a de. ne in exports and an increase in mports, American investments in for- ign bonds and by the large sums of ow being spent in Europe by American travelers. There is nothing serious about the situation at the present t it is all for the best ave truly stable with any country holding than its share of the world's Hence the sooner a re- adjustment is made the better for all rned, so long as it is made gradu- The fact that the tide has turn uld, however, be recognized and business men should watc bal co temporary. also should be remembered th shipment of geld from this increases msiderable rate must res amount _of s, which evy r interest S months ago woolen mills isolated points cut wages 10 per In most ir union plants 20th STREET N.W. Vacant Located on the east side near “Q” St., a very de- irable 3-story brick, hav- ing 9 rooms, 2 baths, both gas and electricity, hot- water heat é $15,000 Thomas J. Fisher & Co. Inc. 738 15th St. N.W. Main 6830 LT HARDZ 50T WUY RUVGH <PRESSED D() not hesitate to come to usin emer- gencies time is he main clement. We give swift service as well as high quality and air prices. Consult us bout lumber at once. when “Buy Here—Save Money” Yost & Herrell, Inc. Lumber and Millwork 11th and O Sts. S.E. Lincoln 1216 | | unton agreed to the cut. These cuts were first made in shoe factories and then extended to textile and other mills. As the plants involved were fairly small, these cuts did not obtain national attemtion. The recent an- nouncement, however, of the Ameri- can Woolen Company, one of the largest employers of labor in America, that it is about to put into effect a 10 per cent reduction In wages has created great interest “Of course, it is generally known that the woollen and worsted industry has been in a bad condition, and th applies to many cotton and other mills s well. This condition has been due partly to higher prices, which have retarded buying; partly to the auto- mobile, which has taken money which people heretofore spent on clothes, and partly to the introduction of rayon, which is gradually but surely revo- lutionizing the textile industry. I am justified in this reference to rayon by the fact that mills which are using it and putting out attractive patterns seem to be having plenty of business today. Question for Investors. “However, the important question for manufacturers and investors to consider is whether the wage cut of 10 per cent is to apply only to the tex. tile, shoe, tire and a few other indus. tries, or whether it is to be more or less general. Unfortunately business s largely determined by fads rather than by facts, and this often applies to changes in the wage scale. Such evidence as is at hand, however, leads me to belleve that there will not be at this time a general decrease in wages throughout all industries. Busi- ness should be better this Fall than it is at the present time, and there should be less unemployment, espe- cially if the farmers prosper. There- fore labor leaders claim that there should be no reason for a reduction in wages. On the other hand, many manufacturers believe that this 10 per cent reduction will be general and, like a wave sweeping over the entire co!untr_ » will be applied to all indus tries. General Price Reductions. “'Beginning this week, the largest glass manufacturing concern in the United States has made a radical price reduction to meet foreign competi- tion. Before the war most of the win- dow glass used in this country came from Europe, largely from Belglum. Like the dve industry and various other industries which were then in & similar position, the glass factories in this country made a great deal of money during the war and since. Up to the present time American manu- facturers of glass have been able to compete with FEuropean manufactur ers, and things have been going very well in the glass industry. Of course, glass has been protected by a tariff, as have been the dyes and similar products, but now a point has ap- parently been reached where even the tariff does not keep out foreign glass. Glass is now coming into the United States in very large quantities, which, with the import duty paid, competes seriously with our American products. “Here, again, this one instance is not very important, but it raises the question whether or not other indu: tries which are subject to severe com- petition will be compelled to make similar radical price cuts in their American products. If so, this may mean distinctly curtailed net earnings in many industri with wage cuts and some unemplovment. Investors who have capital in such American companies should carefully consider the situation and watch its develop- ments. Workmen employed in such industries should also realize that thelr positions and wages are not so secure as in some concern which at the mo- | ment may pay less, but which can hold its own against foreign competi- tion Business Slightly Improving. “General business is slightly im- | (Copyright. 1925.) EVERYMAN’S INVESTMENTS BY GEORGE T. HUGHES. Changes in Bond Yields. The war and Liberty bonds, as has been frequently remarked, created a large new crop of investors, people who never before had bought high- grade securitles for investment. War- !ttme interest rates were so high they seemed well worth while to many who ordinarily would be cold to the peace- time yieids of safe investments. In this new arop of investors there is a large number of persons who were so impressed with 8 per cent on high- grade bonds in 1920 that they are still insisting on that yleld now. They be- came accustomed to it and it is hard for them to realize that times have changed. To be sure, the 8 per cent yield is still available, but not on high- grade bonds. As a result those in- vestors in many cases are buying 8 per cent yvields and assuming that the security is still high-grade. They re- fuse to understand that the same se- curities that they could buy fn 1920 to vield 8 per cent will net them only 6 per cent today, and that the bonds which today yield 8 per cent are the same bonds they turned down as un- safe in 1920, when they were netting around 10 per cent. For example, in 1920 Liberty bonds sold in the low 80's to yield almost 6 per cent. They sold down irrespective of maturity, too, so that the third 41¢s, maturing in 1928, vielded almost 6% per cent in December, 1920. Are those same bonds, which are selling on a basis to yield less than 4 per cent, any better or more secure than they were five years ago? In 1920 60 to 90 day paper returned an average yield of 7.37 per cent, while call money aver- aged 7.72 per cent. Compare those figures with the weekly average rates on_such paper today. Even if an investor refuses to ana- lvze the reason why.he cannot obtain more than 6 per cent today on the same bonds that netted him 8 per cent five years ago, there is no excuse for not recognizing facts. (Copyright. 1925.) _—————— many communities, has been distinctly better than the first half of 1924. The Babsonchart now stands at 2 per cent above normal, compared with 12 per cent below normal a yvear ago, and the tendency of busin is upward at the present time. Of course, a great deal depends on the crop situation this year. The probability is that the farmers will not get such good prices as they did the latter part of last ar, and hence a large crop is rather necessary Moreover, the weather conditions for the cotton crop have been rather poor for the past few weeks, which means that there will not be such a large cotton crop as was originally anticipated. The tendency all along general lines of business seems to be for improved volume of business but continued small profits S eans that this increased busi- ness may come about through further general price reduction all along the line. Lower prices’ usually increase the volume, and it is increased volume which is needed today 333 Bryant St. NE. 6 rooms and bath. Hot water heat; hardwood floors, large porches; electricity; bullt-in garage; all modern improve ments. PRICE AND TERMS LACY & BELT Owners and Bullders proving. There is no radical change. The first half of 1925, although dull in | lumber they neede lumber, and you'll We carry eve need in hed, well known Flooring, Sidi Sash, Doors, Bl Breathe the KEEP COLONIAL large BATH, DETACHED attractive site on $13,500 Avenue. In the Woods 1407 New York Avenue the construction of a house. tumber and millwork from LIBBEY, a long estab- of 6 good-sized rooms, livin feet, WITH A BRICK FIREPLACE, TWO PORCHES, Ph. M. 7421 493 G St. S.W. PRICES NOW REDUCED For over a century we have supplied the home builders and remodelers with exactly the d. Find out what you need in save money buying from Us We Make Immediate Delivery!! rything in stock that you will Buy your firm. Window and Door Frames, inds, Moulding and Shingl FRANK LIBBEY & CO. Lumber and Millwork Cor. 6th and New York Ave. Phone M. 1223 Country Air WELL and Buy on Easy Terms This COTTAGE room, which is 12x21 GARAGE. Located in an The Brow of a Woody Hill 6512 Ridgewood Avenue Open This Evening and Sunday Grounds 60x120 Feet Follow Connecticut Avenus beyond Chevy Chase Club to Thornapple Street, turn west for two blocks and find Ridgewood on the Ridge LOUIS P. SHOEMAKER BIG TRADE IN GOODS FEATURES SEASON Purchases for Future Deliv- ery Indicate Wide Selection in Merchandise Line. BY J. C. ROYLE. Special Dispatch to The Star. NEW YORK, August 16.—Buyers are pouring into the main wholesale Jobbing and manufacturing centers. An unusual number already have ar- rived, and their ranks are constantly growing. Thelr purchases so far have not been remarkable for size, accord- ing to dispatches from main centers received today, but indicate a wide se- lection of goods ordered for future de- livery. This movement has been given im- petus by fine current retail sales, by improved crop prospects throughout the South and the grain-producing States, and the general and steady ad- vance of commodity prices. Careful examination of the situation by mer- chants has induced the belief that this advance s due to continue for some months, and they are laying in Fall stocks {n consequence. Steel Situation Improves. There have been some encouraging changes in the steel situation in the past week, and producers are cheered over the realization that production and absorption are proceeding at a far higher rate than at this time last year. Increased production manifested itself chiefly in the northern Ohio mills. Building operations are making new records constantly. This is accounting for a vast amount of raw materials and providing additional purchasing power through full employment at high wages. The record volume of revenue freight being moved is not only bringing revenue to the raflroads, but is indicating the ability of the country to absorb goods. The automobile producers are count- ing on added sales to make up a de crease in the margin of profits caused by recent price cuts. Many good judges attribute the present strength in copper and the non-ferrous metals largely to the automobile demand. Better buying by the clothing and cutting-up. trades has encouraged the woolen cloth manufacturers, and the stability of wool prices has added to their feeling of sccurity. The demand for worsted has shown an appreciable gain in the last week. Cotton manu facturers who have ventured into the fleld of rayon fabrics report adequate buying response. The coal situation is still complicat- ed by uncertainty as to a strike Sep- tember 1st in the anthracite flelds, but reserve supplies are growing daily. Ofl has suffered some severe setbacks in the shape of price cuts in crude and refined products this week. Production is still being maintained at well above 2,155,000 barrels daily. Buy- ing of railroad equipment has taken on more life, but still is not all that manufacturers might desire. The num- ber of freight cars In repair declined, but no shortage impends. The street raflway companies are fully as much disturbed at present over traffic con- gestion as over the rates of fare. Street conditions in many cities are preventing speedy and regular car schedules, and this is reacting on earnings. The sales of leaf tobacco in the South have been in the main satisfac- tory, and are expected to be more 8o as the cholcer products are offered Cigarette factories are running near capacity, with sales at retail approxi- mately 10 per cent above those of last year. The cigar factories are mod- erately well engaged. Sales of shoes for Fall delivery have been excellent, and have resulted this week in a speeding up of schedules in the producing sections. Hoslery mills are active, although capacity opera- tions have not been reached. Makers of radio recelving sets are swinging into full production in anticipation of record-breaking sales in the last four months of the year. The strength of the live stock mar- ket has gone far to instill better senti- ment throughout the West and Middle West. The rubber market has reflect- ed heavy orders for tires for replace- ment purposes. Excellent profits are expected by manufacturers this month. — . GAS DOWN CENT A GALLON. BALTIMORE, August 15.—A re- duction of 1 cent a gallon in the tank wagon price of gasoline, which was made here yesterday, is sald by offi- clals of the Standard Oll Co. and of the independent companies to reflect an unusual situation in the gasoline business. Prices are declining at the height of the Summer automobile pe- riod when they usually rise. This is said to be due to competi- tion among the producers and refiners to capture some of the unusually large volume of business. Consumption of gasoline is said ‘o be unusually large this Summer. The production also has been unusually large, however, hence the reduction in price. The automobilist, however, will not buy gasoline or blends any cheaper as a result of the reduction. The drop is to the filling station only and is for the purpose of restoring to the dealer the 3-cent margin of profit which he enjoyed until last October. At that time the spread was reduced to 2 cents. ——Window Shades MADE TO MEASURE You know how well a tailored to our shades. [+ MAY 830 13th St. N.W. order suit fits—it's the “taflored” same with to measure window A better shade—a shade bett WE ESTIMATE? W. STOKES SAMMONS, Proprietor CHEVY CHASE, D.C. New Brick Homes $9,350 to $9,500 Four Already Sold Payment as Low as $750 Cash Easy Monthly Payments These new, semi-detached houses are splendidly fin- ished and equipped throughout. Six spacious rooms, tile bath with built-in fixtures, pantry, laundry, hot-water heat, electricity, floor plugs in every room. These houses are situated in one of the highest points in Chevy Chase. Convenient to cars, bus lines, schools, stores and churches, and in a section where values are enhancing rapidly. JENIFER at Open for inspection tomorrow. 42d STREET Representatives on premises. VAEKER 813 15th Street N.W. 4118 Emory Street Out, Connecticut Avenue to Har- rison, to 4lst Street, south on 41st Street to Emory. Detached West Chevy Chase The distinguish- this home is its large, light, cheer- ful rooms. Extra Large Porches Attic Oak Floors Hot-Water Heat Shade Trees Open Sunday From 10 AM. to 6 P.M. ARNOLD and COMPANY Exclusive Agents Main 2434 1416 Eye Street ] SPREAD OF OPTIMISM. Purchasing for Fall Held by Bradstreet’s as Encouraging. NEW YORK, August 14 UP).—Brad- street's tomorrow will say: While buying everywhere s con- servative and no great surge forward is in evidence, there is none the less visible a disposition to convert some of the optimism apparent for some time past into actual purchasing for Fall, and in the case of some lines beyond that. Helpful in this direction have been the large assemblages of country buyers at the varfous trade 0 [ i AFK REAL ESTATE. ing markets. At both eastern and markets, and at points in the southwest, where recent rains have been beneficial to corn and cotton, more has been doing for Fall or be- yond. It is noted that dry goods, es- peclally cotton and silk fabrics, have sold bettter at some leading eastern centers, and trade interest has been quickened by a perceptible readiness on the of some producers to extend lines along the path of new- styled cotton fabrics for next season. Weekly bank clearings, $8,263,777 000. Second-hand clothing, most of it from Great Britain, cost natives of | decreased 4 and market week gatherings at lead- | East Africa $11,000 last year. Only Five Left of These Fourteen Petworth Homes —Nine have been quickly sold | REICHSBANK STATEMENT. BERLIN, - August 14 (#).—The Reichsbank report as of August 7 shows the following changes in reichs. marks: Gold and bullion increased 9,542,000; deposits abroad decreased 20,503,000; reserve in forelgn curren. cies decreased 9,534,000; bills of ex change and cheques decreased 83,119, 000; silver and other coins inci on other banks increased 10.318,000; advances decreased 36, 448,000; investments increased 14,000; other assets increased 116,039,000, notes in circulation decreased 57,660, 000; other maturing obligations ine creased 110,668,001 other labilities 771,000; total gold holde Because—they are Homes of unusual attractive- ness—extra broad frontage, giving rooms of excep- tional size—added to a most delightful location. ' 4901-4927 Tllinois Ave. Sample House, 4923 Illinois Ave. They are indeed beautiful Homes — refined in their character, livable in their design and arrangement—and with every detail of construction, fitting and finish indica- tive of the high-class Homes they truly are. Six rooms, tiled bath with built-in fixtures and shower. Beautiful woodwork, mirror door in entrance hall, electric plugs, sleeping porch, servants’ toilet and hot- water heating equipment in basement. Large closets and many of them; front and back porches—including sleeping porch. Terraced front; and deep rear lot. street, walkin 9080 for our free auto. CUNS 14th & K Sts. Each Home has an allotted space for garage in an ample area in the rear—independent of your house lot. - Another remarkable feature is the price—nothing te compare with it in this popular section— $10,500 There are only five of these Homes—which means selection should be made promptly—so come to see them tomorrow. Open and lighted 9 AM.. to 9 P.M. every day and Sunday Take 14th St. or Georgia Ave east to these Homes And Terms Adjusted to Your Convenience . cars to Emerson Or phone Main of Communities ON Phone Main 9080 Petworth’s Master Homes On the most commanding site—in this pleasing section—we have just completed a group of —into which we have put the combined skill of our organization—its buying and building ability—re- sulting in Homes that are materially better than the prices indicate— 8,950 and *9,250 With built-in Garage. As usual, Cafritz terms are adjusted to render purchase financially easy. After inspection there isn’t a change you'll sug- gest—but you’ll agree there are many features that surprise. But these Homes were not built from “stock plans,” but carefullv detailed and thought- fully finished. Six roe they are real rooms. ms—but Tjled Baths, with built-in fixtures. 'ardwood floors and superior woodwork throughout. Electric fixtures of pleasing new design—and floor lugs everywhere. Kitchen of most convenient arrangement and best equip- ment—with spacious pantry adjoining. Best of heating plants; hot-water heating equipment; laundry end servant’s toilet in besement. Front Porch—Breakfast Porch and Sleeping Porch—not Sunday | CAFRITZ CONS] Builders of Communikies just “balconies”—but broad and spacious porches for practical use. We cannot urge prompt inspection too strongly —for we know they are wonderful Homes—happily located—and remarkably priced. Sample Home—4814 Seventh Street— Open from 9 AM. to 9 P.M. every day and Take l4th St. or Georgia Avenue cars to Decatur St.—then it's only a step to these splendid Homes. auto will call for you. Or phone Main %080 and our RUCTION CO. Phone Main 9080