Evening star., 1934-07-04
SUMMER SLUMP
IS NORMAL SIGN
Gains Over 1888 Recorded
in First and Second
Quarters OF 1884.
BY CLAUDE A. JAEGER.
Associated Press Financial Editor.

:
in itself may be regarded as indi-
eating return to normal conditions.
After registering striking gains over
1893 in the first end second quarters
Of this year, business appears TO be
entering the third quarter well under .
the levels of last year. But in view .
of the highly artificial conditions pre- /
vailing most of last year, comparisons /
with 1893 may be misleading.
| The first few months of 1888 were
| marked by the banking crisis, ending /
| in the bank holiday in March, and /
| the lste Spring and early Summer of /
/ last year saw feveriSh inf1atiOnary /.
/ flare in business coincident to leaving /.
1 the gold standard. and efforts of /.
manufacturers TO beat rising costs
under the processing taxes and the
NJ r. A. codes.
Progress More Smoothly.
! Things have progressed more
smoothly this wear Labor troubles
! the severe drought in the Middle West
/ and Northwest and changing atti-
tudes toward price fixing under the
N. r. A. codes has injected some diff
fcult problems. but they were moth
( ing compared with the ordeals of last
/ year
The Standard Statistics Co index
of industrial production after hold
ing around 81 q per cent of the 1925
average in the last two months of
| 1899, rose steadily during the first
/ quarter of this year to close to 80 per
cent in March II then slid of a
/ little in the next two months but
came back close to the March level
in June. In turbulent 1888 the index
rose from the wears low close to 55
in March to Just shade under 80
| in july
! Factory paw rolls have expanded
! further this year. reaching the best
| level since December of 1890. and the
/ dollar volume OF retail trade has
! shown striking gains, although cur
! rentlv the dollar volumes are not run
ming far enough ahead of 1893 fully
! 10 absorb general rise in retail prices
! possibly indicating lower movement
/ Of actual physical volume of goods. !
( This may not be true. however. owing
TO the tendency Of purchases to shift
/ into lower priced lines.
The half-fear has seen a tendency
/ 10 shift swav from emphasis on price
/ 10 greater emphasis on volume in the
/ recovery program, as increased retail
prices appear to have encountered
some consumer resistance. AutomO-
/ bile lies declined somewhat after an
| increase in prices by several manu-
| facturers in April. In June, prices
were reduced again.
Prices Later Reduced.
| Higher prices for both automobiles
and steel were announced early in
/ the Spring. coincident with 10 per
/ cent increases in wages. but the steel
industry is now following the auto
mobile makers in cancelling some of
! the price increase. The N. r. A. has
I announced the abandonment of min
( imum price fixing as a general policy.
but this has not as yet meant changes
in approved codes
Raw material prices have extended
/ their rise this year. although at
more leisurely pace than during I933's
speculative boom. The drought has
had decided tendency to lift farm
staple prices. With raw material
/ prices creeping up. no general un-
settlement in prices of finished ma
! terisls is anticipated
The drought in the farm States.
according to business analysts may .
| tend to curtail mass purchasing power.
both through cutting the income of
1 the farmer and commanding a large
share of the factory workers pay for
| higher priced foodstuffs. but the I
| heavy Government spending and re-
lief program may well offset this.
Automobile. electric refrigerators. /.
and other articles commonly sold on I
the instsllment plan have been among
lines showing the most striking re-
covery this year. indicating not only .
| increased mass purchasing power. but .
Increased confidence in employment. I
Auto Output Mounts.
Automobile production in June has
run nearly 80 per cent above June
of last year. although June was the
biggest month for the motor makers
in 1888 Textiles, shoes and some of
the other consumers goods lines,
which had such a striking furry at
this time last year, are now substan-
TALLY under 1888.
Among important barometers of in
dustrial and commercial activity. how
ever, both electric power production
and the movement of merchandise /
freight have in recent weeks chalked
up new high totals since 1881
Extraordinary influences have been
at work in steel, and production has
taken a noSedive after reaching the
seasons best volume in June, close
to last Summers peak of around so
per cent of capacity. In the past
fortnight, output has been cut from
about Sc to only % per cent of ca
pacity for this holiday week, the low
est rate in over year.
But steel consumers stocked up con-
Siderably in excess of requirements in
May and June, in preparation for
possible steel strike. and for a price
increase which was announced in
April to take effect after expiration
Of second-quarter contracts The re-
suit was that when second quarter
contracts were filled, there was no
more business.
Upturn Awaited.
With operations getting down to
such low level almost Immediately.
however, steel trade authorities sug-
gest that it is probably scraping bot
tom now, and that the trend should
be upward as soon as the Autumn
stimulus is felt, which often occurs in
August
The heavy. or durable goods indus
tries have made disappointing Show
ing again this year, as they did dur
ing last years recovery. The Govern
ment schedule of spending for coming
months, for public works and other
outlays, is considerably expanded,
however which may help. The Fed
eral housing program comes rather
late. but may bring fair amount of
renovation by Autumn
Latest employment estimates indi-
cate a slowing down in the rate of