The Washington times., 1934-04-24


S ticipation Of la
Dor difficulties
cold weather
ES$ ESSSs:S$ and Govern
Lewis Haney ment dole s,
there is little evidence Of general
buoyancy. Supplies are generally
ample. Demand is limited by
high costs and prices in impor-
tant cases.
The latest figures show a fur
ther increase in steel production,
This, however, appears to be the
result of buying stimulated by ar
tificial price manipulation. The
steel producers under their code
have lacked up their prices, and
buyers have been driven to order
in advance. Then they will buy
less. The Governments financing
Of railways for rail buying has
been about to expire, so there has
been a little rush to order rails,
Automobile production gained a
little. Here the usual seasonal
peak which comes in April or May
is probably at hand. Purchases
based on Government doleS to
farmers have been a large factor,
Railway car lOadings were up
q week ago. Here unusually cold
weather helps coal, the Stimu-
latiOn of steel-making helps
coke and ore, and stimulation
Of motor sales helps miScella-
neOus car loadings. It is OBJ
viOus, however, that railway
traffic has shown little trend
since the first of the year,
aside from the usual seasonal
changes.
Car loadings are relatively low
compared with indexes Of indus
trial production, which suggests
that stocks of goods are accu
mulating, either in producers OF
distributors hands.
Thus it is not surprising to
find the curve of industrial &C
tivity rounding off a little since
the beginning Of March. The rise
between November, 1888, an d
March this year was quite sharp
and extensive. think that 1t
was too largely based on Govern
ment spending and pump prim
ing" to be self-sustaining. Now
for six weeks, the general level OF
industry has shown little net
change, after making allowance
for seasonal factors.
It does not follow that any
severe reaction is necessary. In
fact, the more moderate pace OF
recent weeks may help to restore
the balance between demand and
supply. Then, too, there is al
ways the possibility Of another
shot of Government spending and
inflationary stimulants.
This latter possibility is EN-
phasized by the large break In
grain prices and the decline IN
cotton. The Administration will
have to eat many strong words
about getting farm prices up one
way or another, If it does not
do something.
Il may seem strange that
commodity price averages held
uD last week, but the fact seems
to be that the mark.ups by the
steel producers and Government
buying of meats about offset the
declines in grain and cotton.
No better illustration could be
found Of the futility Of talking
about "stabiIiZing" prices on the
basis Of price averages. Accord
ing to the COMMODITY dollar"
theorists, prices remain stable.
But what about the wheat
farmer?
The Administration has con
tinued to show more conservative
tendencies, at least in the matte
of silver initiation, labor, and NRl
policies. Evidently the hope i
that by soft pedaling radicalism
and drawing on inflated "banl
credit" for spending and doles
business men will be induced tt
take hold.
I fear it will take much more
definite monetary policies, and tn
adoption Of sound economic prin
ciples based on experience rathel
than flighty experiments based OF
political expendiency, to establish
the confidence which capital ant
enterprise require.