The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-05-29
RESISTS
SLUMP DESPITE
RECENT Squirt
General Business Index in
April Same as in Three
Preceding Months.

NEW YORK. May 2e-General
business activity in April was char
acterized by considerable resistance
20 curtailment despite over-expan-
sion during the first quarter. &C
cording to the Alexander Hamilton
Institute. The Alexander Hamilton
Institutes index Of general business
activity was practically the same in
April is in the three preceding
months when the movement was
sideWise.
Steel mill activity in April de-
clined TO the lowest rate so far this
year but the decrease from March
was less than the usual seasonal
amount. Freight car loadings and
cotton mill activity in April also
showed decreases but, as in the case
Of steel output. the curtailment was
moderate. Automobile production
N April rose to a new high for the
year while building activity showed
an unusually sharp squirt.
Although preliminary reports in
dictate that the trend of general
business activity has been down.
ward during May" the survey con-
tinues. these reports furnish little
evidence of a pronounced slump.
Further curtailment is consequently
in prospect as a corrective move
ment to the over-expansion which
occurred in the early months IF the
year. The present outlook is that
the average rate of activity during
the remainder of 1885 will be below
the average for the first five months.
The recovery movement which
began IN 1892 has apparently been
halted. Resumption of this move
ment will depend upon a down.
ward adjustment of prices and wage
rates. This adjustment may start
this year. Present indications point
to a larger harvest in 1885 than in
1884 and prices shouldy decline un-
der pressure of larger agricultural
yields. Declining prices, however,
will not be accompanied but will be
followed by a resumption of the re-
cOvery movement. While prices are
declining, business will probably
experience a rather severe setback
because of the difficulties involved
in the adjustment process.
If prices start declining this year.
however, the unsettlement caused
by such a development will probably
not be fully felt until 1886 at the
earliest. In fact. any serious bust
ness recession may not occur until
1897. In view of this outlook, the
governments spending policy must
be viewed with particular apprehen-
sion. There is the danger that
breakdown of government credit will
coincide with the coming business
business recession. In such case,
a panic of major proportions rather
than a period of orderly dust
ments will usher in a resumption of
the recovery movement.
If there is a Federal credit panic,
it will hold at least equal rank with
the stock market panic of 1929 and
the bank panic of 1888 which have
already featured the process of re-
tSLd OllSAllAlH GIOAlOiii1C OOAlNlA-ADilS OAi
the sound basis which the world dis
carded at the outbreak of the war in
1914.
Since the end of the World War,
business has followed closely the
trend after the Civil War. The
course of business after the low
reached in the depression of 1873
supports the conclusion that the
rally from the low of the 1929 de-
preston has now been halted and
that business is facing a recession
in the not distant future while re-
adjustments are being made which
will lay the basis for resumption
of the recovery movement. The
business rally after the 1873 depres-
sion was halted in 1881, the year
which seems to correspond with
1885. After 1881, business showed q
downward trend for four years"