Evening star., 1933-05-12
Is the Log Jam Broken?

Oh lar more lnpOTlailee oiiu o6AAA
icance than the great volume OF tradlng
in the stock exchanges and the general
advance in prices of securities, as in
dicative of business recovery IN TINS
country, are the reports that have been
coming steadily for several days OF in
creases in commodity prices and the re-
yival of manufacturing, with additions
to working forces and raises in wage
scales. These reports come from all
parts of the country and all lines OF
business Detailed accounts OF this
movement indicate that two causes are
at work. One of these is the disposition
of industrial leaders to respond to the
Presidents appeal before the Chamber
of Commerce of the United States in
this city last week to restore wage and
salary scales in order to increase the
buying power of the people. The other
is the belief that the long-deferred
buying movement is at last under way.
Retail trade fell of so heavily shortly
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three and a half years ago that manu-
facturers reduced their output and, in
turn, their working forces. This, as
result, accelerated the slump in prices
and, by an inevitable consequence, the
tendency of trade to maintain low stocks
of goods. The vicious circle was in evl-
dence. Production fell off to the point
at which it was barely possible to keep
the shelves supplied with wares. 1t has
been for many months evident that this
depletion of supplies was at such a
point that any marked and even briefly
sustained revival of buying would of
necessity result in a prompt return OF
production activity.
From time to time there have been
signs of such a revival, only to wane
after brief period. The log jam per-
sisted The stream of commerce was
still choked Reasonable optimism pre-
vailed, however, in the belief that
ultimately a readjustment must come.
Goods purchased in the days OF ma
tional prosperity were wearing out and
requirements were eventually necessary.
Supplies of necessities were being ex-
R1austed and must be renewed. Just
how the jam could be broken was the
problem. The measures proposed by the
administration and adopted by the
Congress served to restore public con-
fidence in large degree, but conServa-
tivism prevailed in manufacturing and
business circles, for there had been
false revivals during the months of the
slump and the buying power of the
people was still low, even below the
point of actual needs.
1t is the present hope of those who
study the daily reports of wage increases
and additions to working forces and the
resumption of production on a broad
scale that the blockade has at last been
broken. The stock market may be
regarded as an index of that hope,
though in the past it has often proved
A fallacious token. 1t will take only a
slight, if sustained, acceleration of
manufacturing to set in motion the
forces of trade, the effects multiplying
as the army Of the unemployed is
demobilized and the purchasing power
pf those employed is increased. Another
week, another fortnight, another month
Df successive actions such as those of
the past few days will be increasingly
Viewed as an indication that the corner
has been turned and that prosperity is
returning. And as soon as confidence
jim that recovery is established in the
public mind the natural processes of
production distribution, sale and use
will once more be in full action.