Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-26
OPTIMISM RIFLES
TRAbE FORECAST
Head of Motor Corporation
Believes 1890 Business
viii Increase.

Conservative optimism rather ac-
ctlrately describes my views on the pros
poets for American business during the
year 1880, according to A. r. CLANCY,
president of the Oakland Motor Car Co.
It is my opinion that 1880 will wit
ness reversal of the business history
of 1929 which started better than it
finished. I believe 1880 will finish
better than 1t started.
The year 1929 started off at rapid
business pace. And then, instead of
the usual Summer letdown, it continued
the abnormal speed Of the earlier
months. Almost invariably such I'M
reasonable activity is followed by an
unreasonable recession. Then things
return to normal.
Market Decline Hurt Business.
1t would be absurd to assert that the
stock market decline of october and
November had no effect upon business
In general It did. But the fact re-
under when it sank to such spectac-
ularly low levels.
The stock crash, aptly characterized
by the observer as value panic" re-
manned just that and did not spread
sufficiently to become in any sense a
general business panic. In fact, / be-
Heve there never has been a market
slump so little related to business as
was the recent excitement in Wall
street.
Under production conditions obtain
ing in former years the market slump
might have resulted in disaster to BUSH
ness in general, with widespread price
alashing and unemployment.
In the 1920-1e21 crash the liQuida-
ton of highly inflated commodity
markets, together with the tremendous
ivy hx
caused huge losses and aggravated the
situation severely. This condition is
almost entirely absent at the present
time. Some declines have occurred in
commodity prices, affected by and in
sympathy with the sharp break in the
market, but nothing at all comparable
to the smash in commodity prices OF the
earlier period.
The careful inventory control which
modern business is able to maintain
through the "hand-to-mouth" buying
of raw materials permitted by the re-
markable efficiency of our railroads has
to a large degree protected industry
from the effects of the recent market
debacle.
Hoover's Action Steadying Factor.
Another steadying factor was the ac-
ton of President Hoover, one of the
ablest administrators this country ever
has had, who moved intelligently and
effectively when he inaugurated his
famous sunshine campaign" at WASH
ington. While the results of his con-
ferences with Americas industrial lead
ers probably will not be felt for some
time, their psychological effect was
both tremendous and timely. Mr..
Hoover undoubtedly helped American
business to keep its head"
Some purchasing power, no doubt, mas
been impaired by stock market losses,
but the fact must be remembered that
despite tn, growing public participation
In stock market activities during recent
years, the percentage of those who
'splay the market" still represents only
an infinitesimally small percentage OF
our population, and I imagine that .
good many ex-ticker fans have turned.
sadder and wiser, to more lucrative
fields of endeavor. The losses incurred,
moreover have been to individuals, and
are not losses reducing the country'S
productive capacity. The Nations
wealth. as represented by its farms,
mines, mills. railroads and factories, re-
mains intact.
The fundamentals Of business have
been and still are sound. Our large
corporations are in good shape and ap-
parently have not been greatly affected.
Never before in the history of the coun-
try have our industries been better for
tined with cash, conservative state OF
inventory or SoundneSS OF corporate
structure.
The automobile industry was fortu-
nate in that the value panic" craze
came during the normally dullest por-
ton Of the business year, time when
production and sales usually are at
their low Therefore, 1t is not unreaS-
enable to expect that the motor car
manufacturers will be able to con-
tribute materially toward Stabalizing
the prosperity OF 1880.
Declines Comment on Auto Trade.
I am making no predictions as to
automobile production in 1880. But 1t
must be remembered that automot1ve
transportation has become almost as
essential part of American life as eat
ing and sleeping. And when one car
has been worn out another must replace
It. From the 25,O0O,O 900 motor vehicles
In use throughout the Nation, We may
anticipate an automatic replacement
demand for 5000, 900 new cars, or about
three-fifthS of q normal year OF busl-
ness from this source alone. The ex-
port trade should require approximately
100000 cars this year, or 20 per cent
more than the 1929 demand. And to
this potential export and replacement
demand must be added the new buyers,
the growing number of two and three
car families and the increasing demand
for buses and trucks.
OF course, varying public response TO
the sales appeal of the new cars intro
duced this year possibly will result In
the transfer of volume from one manu-
facturer to another But I believe the
long-range outlook for the automobile
industry and for American business as
Q whole will progressively improve
through 1890.
The major business of feeding, cloth
ing, housing, entertaining and trans
porting 100 900 900 people must go for
ward. and prosperity beckons to the
Industries through which these funda-
mental wants will be supplied.