Evening star., 1935-12-31
Every Month Brings Rise
of 10 to 20 Per Cent
Above 1884 Levels.
LARGE PART OF HUGE
NEEDS STILL UNTITLED
Wave Of Buying Ranges From
Home Requirements to Machine
Tools for Industry.
BY J. G. DONLEY.
Special Dispatch to. The Star.

NEW YORK, December 31.-A new
answer is being given by Old Man
Business to all who anxiously inquire
about his health. Before the Sum-
mer of 1895 the long-suffering old
fellow for several years had a ready
reply which somewhat humorously
portrayed his state of being.
Every time get a little better I
get little worse" he would say. And
that's the way 1t was in all the years
from 1880 to 1884, inclusive. In 1893
business got whole lot better in short
order. Then came a relapse, and,
before the end Of 1888 another turn
for the better. In 1884 the upturn
continued until the end of April and
fiattened out in May and June. There
after business got "a little worse"
quite steadily until Autumn, when q
slow improvement set in. gathering
momentum as the year end ap-
preached.
In 1885 one Of the most significant
developments is the fact that con-
valescing business Is now able to say
thruthfully, Every timesI get little
worse I get little better"-with the
accent on better"
Befort the slight recession which
usually marks the year end, business
activity, as measured by the familiar
indices, actually got back this year to
the highest level reached-with the
exception of the bulge in 1933-since
the middle of 1890. To visualize just
where business stands at the close of
1885 it is first necessary to note that
the composite index of activity was
somewhat more than cut in half by
the long decline from the 1929 peak
to the 1888 low point. At this months
high nearly two-thirds of the loss had
been recovered.
Holds Wen Above 1884.
Looking back over the year, it is
apparent that, although there was a
slow recession from the high of early
February to the low Of April, there
was not even one month which might
have been called poor" In every
month of the second half Of this year
activity has consistently run from 10
to 20 per cent above the like period
last year. And there has been i'm
provement, almost without exception,
from month to month. 1t marks the
first time since the downturn began
in the middle of 1929 that business
has maintained an unbroken upward
tread for as long as six months.
Foremost among the factors account
ing for persistence of the recent re-
covery is deferred demand-the needs
upon which both corporations and in
dividuals had turned their backs for
five or six years. When the need to
replace worn-out and obsolete equip
ment of endless kinds in both homes
and factories became so pressing that
it could no longer be deferred, there
developed wave Of buying of house
hold equipment, radios, furniture, floor
coverings, farm implements and nu-
merous similar articles. Eventually, it
reached back to machinery and ma
chine tools as factories prepared to
fill the vacuum created by five years
Of niggardly living.
This accumulated deficiency of all
the things needed In the daily activi-
ties of individuals, homes and offices.
retail stores and factories, farms and
our great transportation lines and
communication systems-estimated to
run into the billions of dollars-re-
mains in large part untitled and
should supply the motive power for q
sturdy business trend throughout 1886.
Capital Goods Watched.
Greatest hope for next year lies in
continued improvement in capital
goods, for. while consumers goods lines
will end 1885 at levels fully compara-
bic to pre-depression days, it is esti-
mated that. as compared with such an
average year" as 1926, capital goods
are still about IS per cent below nor
NAL. Long laggard in recovery, sales
of numerous capital goods lines have
recently been showing the best totals
since 1929 or 1880.
Profits are the accepted "yardstick"
OF business recovery. On the basis of
the latest reports, for the third quarter
of the year, improvement is gratifying:
The December bulletin of the Federal
Reserve Bank of New York reports
that third-quarter profits of 259 in
dustrial and mercantile concerns were
81 per cent larger this year than in
1884, when earnings were relatively
low in 8 number of lines.
The machinery and tool group of
companies earned three times as much
In the September quarter this year
as in the like period last year. And
the building supply companies did
nearly as well. Electrical equipment
concerns doubled their. last years
profits. But all of these groups had a
very poor time of it last year.
Nets Up IS Per Cent.
Automobile, automobile accessory.
paper and paper products and house,
hold supply groups reported increases
OF rs per cent and more. Two groups
steel companies and the clothing
and textile up-operated at a new
profit this year, as contrasted with last
years "red ink"
Groups reporting less profit in the
third quarter this year than last in
cluded food products. shipping. to-.
bacco and aviation. And the railroad
equipment concerns were ''in the red"
as a group this year. compared with
a better-than-even position last year.
Measured by production. seven i'm
portant industries have operated this
year at q rate equal 10 90 per cent or
better Of their post-war highs. They
are, according to compilations BY the
lCnnfiniiAd nn PaaA &. Column 3