UNITED STATES TRADE

Wanganui Chronicle, Volume LXXXIII, Issue 19783, 5 March 1927, Page 11

UNITED STATES TRADE

“QUIET PROSPERITY” AHEAD. NEW YORK, Feb. 28 As was expected in some quarters, the past week saw an upward spurt on the New York Stock Market to the former high level of prices under the stimulus of holiday trade, a long list of extra dividends find record railway earnings. The securities markets also benefited ,from the views of business conditions expressed by the President, and the Secretary to the Treasury in introducing the National Budget" to Congress. Remarkable <as it may seem, tho greatest problem occupying the statesmen of this country to-day is, apparently, what disposition to make of the anticipated surplus of 400,000,000 dollars over the Government’s financial requirements for the present fiscal year. The only hint of some other slight anxiety contained in each message was the recommendation • that the surplus should not be made the basis of any permanent policy of tax reduction, but how far this caution is eVoked by political considerations rather than economic it would be difficult to estimate. There is little doubt- that the Government’s receipts from taxes in the new year will be smaller, because business activity is contracting, Although in a very orderly manner. Despite thd decline in the prices of commodities, thn profits of corporations this year will be 25 per cent, higher than in the previous year, owing to the elimination of waste in industry, an increase in productivity of labour and a broadened consumption. It is a question, therefore, to what extent these factors will offset the probable continuation of the darkening of business and the decline in prices. The banking view of the’ outlook is that quiet prosperity lies ahead. Bankers predict that the breakneck speed of production will cease, and that busine’ss will be settled and highly competitive. Such a sequel to several years of abounding prosperity is considered by bankers to be a very desirable and a happy one, and they will try to guide business along that course.