The Washington times., 1935-12-10
BIGGER GAINS
F0RESEEN FOR
BUSINESS
BY LEWIS HANEY
Professor OF Economics,
New York University

action may come early next year,
It seems that enough momentum
has been gained to carry the
expansion further by next spring.
Many people seem to have
money and are spending it more
freely. Favoring this condition
are the WPA spending, the
automobile industry's early sea-
son. the favorable income OF
many farmers, and the growing
Use of small-loan credits. Not
only are more stores selling furs,
etc. on the instalment plan. but
banks are going into the small
loan business.
OF course. colder weather and
the approach of Christmas have
stimulated trade.
So, while there are consider
able labor disturbances. short
age of semi-Skilled labor high
living costs, high taxes and
political uncertainties, the bus
mess outlook is good.
The steel industry. consider
ing the season, continues to
point distinctly upward, and the
failure to advance finished steel
prices for the first quarter does
not seem to have reduced the
buying. The fact that the ma
chine tool business is doing bet
ter than usual for the season
is a favorable augury
No sign of any reaction in the
automobile industry has yet ap-
peared. The stocking OF dealers
has now been attended to, ana
the trade-in problem has increased
but the retail demand Tor new
cars continues surprisingly good.
One straw is seen in the fact that
Cook county Chicago and Vlcln'
itv) registrations in November
were 5,549 against 4,836 in Octo-
Der, and 2.917 a year ago.
Favorable reports come from the
textile industries, and cotton
goods production rose last week
Ravon and wool production con-
tinued at a high level.
Lumber production strikes one
of the "sour" notes. Railway car
loadings remain inconcluslVe ana
doubtful, the figure for last week
probably being off very slightly
more than usual for the season.
But retail trade in most lines
and sections has been booming.
Wholesale commodity prices
continue to fluctuate uncertainty,
and last week again averaged
trifle lower. This was chiefly due
tn declines in wheat. lard, ana
sugar: although hides, tin, SILK
and rosin were also lower. Cotton,
cottonseed oil. and wool tops
were up a little.
Two great uncertainties are
holding commodity markets IN
check. One is the pending decl-
Sions concerning AAA, notably
the Hoosac Mills case. Many pro
fess to fear that if the artltlclal
policies by which the AdmlnlStra-
tion is holding farm prices up
we're stopped, prices would de-
cline. The other is the european
war situation. If peace should be
near, the wheat and copper mar
kets might be weaker for a time.
But stocks of most commodities
have been reduced and credit IN
flation" is developing. Any reac-
ton in prices would be very tenn
porary. Incidentally, the lease on
life gained by the Laval admins
tration in France postpones the
danger of franc devaluation,
which should help international
commodities"
Gold continued to pour in last
week, however, lifting the New
Deal gold hoard to high record
of over 10 billion dollars (of SO
cents each). Excess bank reserves
mounted to new high.
Our Federal public debt also
broke all records by rising we'll
above 80 billions of dollars. The
Administration borrowed over a
billion and paid 224 per cent. Al
the same time the English gov
ernment borrowed at pa per cent,
so evidently our credit is not the
best.
Washington made it clear that
no control over credit is contem-
plated to inflated business activ-
ity, it is o. k.
Big business came out flatly
against the Roosevelt administra-
ton.
1t is good to have the lines def
nitely drawn, and TO quit the
hypocrisy of breathing spells"
and cooperation. 1t is to be re-
Cretted, however. that the busi-
ness leaders program was not
made more liberal. The danger
now seems to be that the Republi-
can party may be split into stand
pat and liberal parts.
But the Democrats are also up
against a similar problem OF being
split three ways: Cd real Demo
Gratis, 90 New Dealers, and CD
other radicals and inflationists
(Townsendites, Coughlinites, and
greenbackerS).