A RECORD YEAR

Sun (Auckland), Volume 1, Issue 4, 26 March 1927, Page 2

A RECORD YEAR

1926 IN U.S.A. WIDESPREAD PROSPERITY Except in farming and textile industries the year 1926 was for the United States of America one of widespread prosperity, all previous records for volume of business being surpassed, according to a special report issued by the Department of Commerce, Washington. Aided by a gradual decline in prices throughout the year, the purchasing power of the people has been unparalleled and production in nearly all lines has been at a record height. Wages have been at the highest levels in history and, while there has been practically no unemployment, strikes have been few and far between. The people have thus been able to live better than at any other time and savings bank deposits have continued to increase. MONEY PLENTIFUL Money was in ample supply, and rates of interest are said to have been reasonably low throughout the year. The average rate on 60 to 90 day bills during 1926 was 4.25 per cent., an advance of 0.22 per cent., over the rate for 1925, but the average was below that of the five-year term. Funds for investment flowed into the bond market faster than attractive issues could be supplied to it, the result being that securities were carried up in price to exceedingly high levels. Government stocks sold on the lowest yield basis recorded for years, and the stock of many industrial concerns touched the highest level known. Financing on behalf of foreign nations and businesses represented a sum of more than £270,000,000, or 6 per cent, more than in 1925, which . was a’ record year. While this was so, the sales of bonds on the New York Stock Exchange declined by some £63,000,000,, but they still amounted to the vast sum of £601,700,000. Irregularity marked the stock market. A violent “slump” occurred during the six weeks ended March 31, but later on many important stocks were $o heavily bought as to reach unparalleled heights. The advances in the stock market are said to have rested upon the excellent profits recorded by large corporations. The real basis for the advance was an increase of 9 per cent, in railway profits, and 12 per cent, in those of public utilities corporations. THE MOTOR INDUSTRY In trading circles predictions were made that the motor industry had developed to such an extent that the people were over-sold. As during the first 11 months of 1926 4,081,000 cars and trucks were manufactured, the expectation of the Department, of Commerce was that the 1925 total of 4,172,000 vehicles would be exceeded for the full year of 1926. Dealing with the textile industry, the department writes that it had suffered from over-production and under-consumption. A scarcity of orders had kept mills from operating up to capacity and part-time work had led to a decline in profits. The drop in the price of cotton had been a most disturbing factor, because it had encouraged hand-to-mouth buying and had made manufacturing somewhat speculative. In the iron trade the average production monthly during 1926 was 3,270,000 tons of pig iron. Steel prices had been slightly higher during the second half of the year than in 1925. There had been no excited buying movement, but buying had not been dull. In conclusion, it is said that conditions in the farming areas had led to a great deal of dissatisfaction because of the depression caused by the decline in the price of cotton, the fall in the price of No. 2 red wheat ™ d of A maize « which had eased from J 9 cents a bushel in December, 1925, % 8 * 1926 ’ de spite a falling oft of 34o,000,(W0 bushels in the 1926 crop.