Evening star., 1934-12-31
Consumer Goods Continue
Upgrade, but Other
Activities Lag.
AUTO VOLUMES EXERT
POWERFUL INFLUENCE
Hasty Retreat to Lower Prices
Revives Sales Sharply in Last
Half of 1894.
BY CAMBRIDGE ASSOCIATES.

Individual industries in 1884 present
a mixed picture, as the smallest in
vestor could readily testify. Those
who placed their faith in consumption
goods with the exception of electric
power), or automobiles, did not do
badly. Those who had hopes of sub
stantial recovery in the heavy indus
tries, such as building, machinery and
steel, however, had occasion to regret
their choice.
Let us first turn to the most power
full force yet in evidence in the re-
covery of the automobile industry.
Faster gains were shown by other in
dustries, but the automobile industry
affects so large sector of the general
industrial picture that a comparatively
small increase is of major Importance.
Actually, the increase in automobile
production in 1884 over 1888 was ap-
proximately 10 per cent. 1t would
have been smaller had producers per-
sisted in maintaining the price ad-
vance which was inaugurated at the
middle of the year. But sales fell off
so sharply that the industry beat a
hasty retreat to lower price. Volume
obligingly picked up again.
Automobiles.
Although it was the automobile in
dustry which made the gains, the
equipment companies reaped the
greatest profits Many of these COM
panies approached 1929 earnings, since
their prices were not restricted by
public refusal to buy, but only by the
more tolerant attitude of the motor
manufacturers. Surprisingly, the tire
companies brought up in the rear,
since a large part of their volume
comes from replacement sales, on
which prices could not be advanced
to offset the sharply increasing price
of rubber.
Oil companies seemed perennially on
the point of improvement, but never
quite made the grade. Although the
Government restriction was successful
enough to maintain the price of crude
practically constant throughout the
year. devastating price wars in the re-
failing of gasoline swept the country
during the Summer when record con-
sumption levels were attained. It has
proven true of the industry that unless
there is a strong arm enforcing re-
striction of output, the possibility of
overproduction exerts depressing
force on prices.
Steel production showed slight but
encouraging advance over 1888.
Whereas the boom of that year came
in the middle of the Summer, 1884
showed its lowest activity in early
September. The automobile industry
was the strongest contributing factor
to the improvement. Railroad equip
ment and general purpose machinery
makers had larger requirements. Othe-
metals enjoyed an inc9ease in demand
from the same sources.
Chemicals.
tered by the chemical manufacturers
This industry has become so varied in
its applications that the earnings of
the average chemical company can be
taken as a measure of industrial pro-
duction without going far astray. The
future outlook for chemicals has been
outlined as extremely optimistic by
scientists and economists alike, many
new developments having been
achieved during the depression years
which promise to revolutionize indus
tries and habits of living.
Electrical Supply.
The progress of the electrical refrig-
Grafton industry, even during the de-
preston, has been one of the bright
spots of the last few years. Its big
gest year probably is yet to be seen fo-
this industry. conditioning is be-
ginning to assume a significance be-
yond its years. Further reductions il