The Washington times., 1934-04-03

~ ~&<&S%%'# n d u Strial ac-
Lewis Haney tivity seems to
have been similar to the average
for the year 1881.
Last weeks reports probably re-
flected the end of the recent let
down in steel production. The an
nouncement of price advances to
come, Is certain to bring a rush
Of orders. PWA activity will now
be increasing as milder weather
sets in. The railways are using
money borrowed from the Gov
ernment for buying rails, track
supplies, and equipment.
Automobile production Jagged
little behind the usual seasonal
gain, but the manufacturers are
now rushing to furnish dealers
with the stocks of cars required
for the usual April and May peak
of the trade.
Electric power production did
better than usual for the season.
Railway carloadings, it is true,
dipped little, but this may be
attributed to the preceding labor
uncertainty and some natural re-
action in coal loadings. Miscel-
laneous and merchandise loadings
did well.
AS anticipated, wholesale prices
were irregularly lower. But this
was plainly due to a temporary
lull in buying, and a resumption
of the rise is practically certain.
The impression 1 get from re-
~OrtS on retail trade is that, con-
sidering the high prices, the
volume was fair. weather re-
tarded pre-EaSter sales. March
as q whole, however, seems to
have been q good month, and
especially so for the mail order
houses, which benefited by
Government farm bonuses. Thus
Sears Roebuck, in the four
weeks ended March rs, had sales
81 per cent above the same
period last year, which is so far
above the rise in prices as to be
striking.
All in all, moderate gains in
business activity seem probable
for at least another month or two.
Probably the outstanding event
of the week was the move to
advance wage rates made by
steel companies and other large
induStrialiStS. Doubtless this
step is partly designed to fore
stall labor difficulties, political
and other, and to keep control
in the hands of the manage
mentS.
The move, however, fits in
with the general idea of boost
ing prices and creating pur-
chasing power" From this point
Of view, it is a doubtful expert
ment.
An immediate result has been
a mark-up in steel prices, which
are already high. That will
drive in forward buying, and
thus induce speculation and ac-
emulation of inventories at a
time when fundamental uncer-
taintieS remain.
And what about consumers?
When you put more men on
the payroll, you may increase
the total paid. But at the
same time, you increase your
costs and have to raise your
selling price.
Then each individual laborer
comes to market with his wage
dollar. There he finds high prices.
What can he do? The total pay
roll of the employer is larger, but
his part of it is small. ct is
smaller than it would be if he
worked longer hours and did rot
have to divide up with so many,
among whom the work is "spread.")
His wage dollars do not buy so
much. Consumer resistance" re.
suits.
Can a married man who gets
only $1,000 year really afford an
automobile any more than one who
is out of work?
Can manufacturer make money
by advancing wages to his EN-,
ployes on the theory that they will
buy the cars they help to make
thus merely giving him back his
wage payments?
My thought is that this idea of
spreading work and creating pur-
chasing power looks toward infla-
ton and another speculative UP.
ward spiral in prices.