The Washington times., 1934-05-08

1TOu1 LI1e sharp 1cdCIIOI1 VI IA1S
fall months.
Then the Government curtailed
its expenditures considerably. Re
Gently it appears to have been
spending only about half as much
as it was earlier in the year. This
has reduced the most important
stimulus.
Several industries, notably tex
tiles, had stepped up production
to levels at which stocks Of prod
ucts accumulated.
The stimulus Of rising prices
was reduced, and there appeared
growing signs of consumer resist
ance" In this connection, we note
the following statement recently
issued by the American Federation
Of Labor:
"The individual worker in in
dustry made no gain whatever
IL real wages from March,
1888, to March, 1884. His
weekly average increased 81
per cent, but this was COM
pIetely offset by q 9.3 per
cent increase in the cost Of
living"
We must ever remember that
"total payrolls" is one thing;
and average weekly earnings
per individual worker" is another.
When a larger total payroll is
divided up among more individ-
uals, working shorter hours, each
individual may not get much
more money. He may be able to
buy necessary food and clothes,
but he is not able to buy COM
forts and luxuries.
Business is thus learning that
as it's costs increase (including
total payrolls), and prices have
to be raised, its runs into con-
sumer resistance on the part Of
individual workers.
The latest weekly figures show
a little further rise in the curve
of industrial activity. The chief
factors in this rise were steel pro-
duction and automobile produc-
ton.
In the case of steel production,
it is generally agreed that the
rise is chiefly caused by the de-
sire of consumers to accumulate
stocks, due to anticipated price
advances, labor difficulties, etc.
In that case, the peak of activity
is probably not far off. and it is
notable that the price of steel
scrap has been showing persistent
weakness. This is the more prob
able since April automobile pro-
duction fell short of expectations,
and bears out trade reports that
the buying has become more
spotty.
The weekly price averages
were up, largely on account of
the recovery in grains and the
further rise in rubber, both of
which are due to anticipated
feQuCClOnS IN SUPPLY.
The condition of crops in the
Northwest seems to be pre-
cariOuS on account Of serious
drought, and this Is hurting
business in that section.
Retail trade may fairly be
characterized as "spotty," and on
the whole rather backward. For
example, Cleveland district de-
partment store sales in late April
showed the number of transac-
tions to be below a year ago.
Woolworth April sales were below
last year. (ThiS is not as bad as
first seems, however, because of
the later Easter last year,
But all observers agree that
wholesale trade in most lines has
turned quiet, and this is a fair
indication of the current trend of
retail business.
All in all, 1 am inclined to
look for a period of hesitation
and moderately sagging business
activity during the early sum-
mer months. The New Dealers
could cause sput any time if
they want to, by speeding up
Government spending and other
inflatiOnary tactics. But they
evidently desire to test the abiI-
ity Of the business pump, which
they have been "priming," to
run on it's own.
This is fair enough. We will
watch the outcome with intense
interest.