The Washington times., 1935-01-16

for the season. M
They were only S
76 per cent of =.
the average for LOWS nancy
1923-25, but that compares with
73 per cent in November. Since
retail prices and liquor business
are now more like they were a
year ago, the II per cent gain
over December, 1888, is real one
in the sense of volume of goods.
We also find a gain in factory
employment indicated for De-
cember. The New York State re-
turns show an increase of about
half of one per cent, and factory
payrOllS increased about 4 per
cent. This gain in employment
is more than usually occurs In
December, and is thus more sig
nificant.
Perhaps the most notable thing
about it is the fact that metals
and machinery showed among the
larger gains in employment.
This fits in with the fact that
the production of iron and steel,
and the sales Of machine tools.
both increased last month, thus
suggesting an upturn in the
''heavy" or capital goods indus
tries.
Steel production jumped sharply,
and after adjustment, the Decem-
ber index is the highest since last
June, and about up to the level
reached in February during the
early 1888 upturn. Pig iron pro-
duction has been relatively slow,
and tagging behind steel. It is be-
low a year ago. But it too gained
more than seaSonally.
Machine tool orders well
represent the sO-called "capitaI
goods" and they increased con-
siderably more than usual in
December. While still below
December 1888, they were
higher than in any month Of
1884.
Probably the main factor in
these capital goods gains, has
been the rise in automobile
production, though various pub
lie works" have, of course,
been a factor.
On the other hand, December
building figures were very dis
appointing. Construction con-
tracts were down II per cent
from November, and were far be-
low a year ago. Building permits
were q per cent under November,
and IS per cent under December,
1888.
These declines in building and
construction indexes were much
more than seasonal, and do not
augur we'll for activity in the
building trades during the winter.
Other less favorable indications
may be found, such as the de-
clines in cotton mill consumption
and exports of cotton, accom-
panied by reduced spinners'
margins between raw cotton
prices and yarn prices. Orders
for zinc dropped, and surplus
zinc stocks rose to high level.
Railway carloadings, however.
did better than the normal sea-
sonal expectation for December.
and were at the best level since
last June.
Banking data in December con-
tinued their doubtful indications,
for while deposits increased,
loans fell, and the turnover OF
deposits was at very low rate.
All in all, one would say that
most indexes point to further
rise in activity, and that a cyclica1
upturn would be suggested if only
this rise in activity were proceed
ing under its own steam. But
the question arises, to what eX-
tent is this a made" recovery,
which has been produced by arti-
ficial stimuli, and which is there
fore likely to peter out as did
the upturn in 1898?
If Government spending Of
borrowed funds is chiefly re-
spOnsible for the better show
ing Of retail trade and auto
mobile production, and these,
in turn, are chiefly responsible
for the gains in steel production
. and machine tool orders, one
cannot have the same asSur-
rance as to the final outcome
that one might otherwise have.
If the bank deposits represented
individual savings, and the re-
duced bank loans meant liquida-
tiOn Of total debt in the nation,
one could be more optimistic
about the large excess reserves
and low money rates.
AS it is, I feel reasonably sure
. (barring radical political action)
Of further business gains here
but remain doubtful as to the dura.
ton Of the current recovery"
Mont. Ward Nets
e1 A09 Q56 in Dnc