PREDICTS CONTINUED BUSINESS EXPANSION

The recovery of business from the deep depression of 1921 has proceeded in a perfectly normal fashion, in spite of European unsettlement, and good business may be expected throughout 1923, according to a report made public last night by the Economic Service of the University, in which further expansion of business, firm or higher commodity prices, and steady or higher money rates were predicted.

"The Harvard Index of general manufacturing output increased from 28 per cent below normal in May 1921 to 10 per cent above normal in January 1923, normal being 75-80 per cent of capacity", says the report. "The prices of many commodities stiffened in 1921, but it was not until 1922 that a widespread increase began.

"Manufacturing profits, also are now generally satisfactory. In 1921 losses were common and good returns the exception: in 1922 profits improved from quarter to quarter, but to many business men it seemed that the days of really profitable business would never return. In the first quarter of 1923, strange to say, not a little pessimism has been generated by rapidly advancing prices and profits.

"Fear that the present good trade will not continue and reluctance to make commitments at still higher prices, how ever, are not had signs at this phase of the business cycle. So long as a conservative attitude dominates the general business community, the prospect of continued healthy advance remains. This attitude promises restraint of undue expansion and therefore sustains the belief that the present good business will not prove short-lived. In manufacturing industries the physical volume of production is now slightly greater than it was at the end of 1919 or the beginning of 1920: but if allowance is made for the growth of the country, production has not yet quite reached the level of three years ago."