Evening star., 1935-08-11
CONF F|DENCE FELT
. IN SOUNDNESS Of
BUSINESS UPTURN
All Lines Reflect Hopes.
Further Gains Likely
for Rest of 1885.
IMPROVEMENT COMEDIES
WITH SEASONAL TREND
Steel Magazine Halls Start of
Long Climb Back to Prosperity.
Stores Hold Advance.
BY CHARLES r. SPEARE.

NEW YORK. August 10.-The i'm
important phase of the national situa-
ton. There is nothing artificial about
it. 1t appears to have a sound basis
and to be progressing on natural
lines.
The fear is held In some quarters
that 1t is only one more of the many
spurts in the last two years that have
soon faded out. but this fear Is not
present to the extent previously main
tanned.
The improvement comedies with
season when business expansion is
normal. 1t reflects a degree Of con-
fidence among retailers. jobbers, ma
tional distributors and manufacturers
that has at no time since 1888 been
so universal at it is now. Therefore,
it may be expected to continue and
to broaden out in the remaining
months Of 1885.
Dealing with the aspect of recovery
that obtains in the steel trade, the
4iOl AkC LIllS "CCA Gays ~ Id OAotAi4NS
from the abortive rebounds of pre-
vious depression years and really
represents the beginning of the long
pull out of hard times" The opera
tions of the steel plants are today at
Al per cent of capacity.
Stores Maintain Rise.
The 10 per cent gain in retail trade
in the New York district in July has
been held in August and the presence
here of the largest number of buyers
since 1929 suggests preparations for
consumer demand next Fall and
Winter that will be the best in years.
In nearly all the Federal Reserve
districts of the country the reports are
Of enlarged sales and Of a remarkable
spending movement. Sears. Roebuck
and Montgomery Ward sales for six
months are up 26.7 and 20.4 per cent,
respectively.
Compared with the low point In the
Spring of 1888, the index Of business
activity shows a rise from about so
per cent of normal to rs per cent: in
other words, . regain Of about half
of the decline.
Dividend Rates Raised.
Rejecting this change in conditions
are such dividend increases this week
as those of General Motors, Eastman
Kodak and Timken Roller Bearing,
following a s40,000,o 900 rise in cor
poration dividends in July. Unfor-
tunately, the same measure Of i'm
provement is not to be found in the
statistics of employment. These clear
ly indicate that, in period of abnor-
mally low production. ways and means
are discovered to reduce overhead and
to make machinery do more of the
work formerly performed by men.
Furthermore, the work relief pro-
gram is slow in functioning. It is
now doubtful if any considerable
proportion Of the 3,500,000 unem-
ployed who were to have jobs by
November / will then be independent
of direct relief. This situation. COM
pares unfavorably with that in Great
Britain, where the July figures of the
idle we're the lowest in five years and
one-third down from the maximum.
Liquidated Status Helps.
The fundamental reason for the
gains in industry and for the strength
in securities is the liquidated degree
of business and of the stock market
and the almost liquidated condition
of real estate. This has more to do
with the recovery now taking place
than the decisions of the Federal
courts in the N. r. A. and A. A. A.
cases, though these obviously have
given heart to many.
The debate on inheritance and gift
taxes Is alarming to the comparatively
small group most affected by the pro-
posals, but the absence Of any sug-
gestion of currency imitation in bills
now seriously considered by Congress
encourages a large body of business
men to make commitments about
which they have been hesitant for
months.
The fact that stocks have been
liquidated, that there is comparatively
little borrowing on them and that
money is so abundant and Is con-
stantly seeking release from its pres
ent unattractive employment accounts
for the willingness of investors to buy
shares even at the present high
average range of prices. This week
some of the good news described
above has been the occasion for
profit taking. So long, however, as
business recovery is maintained, the
position of the present holder of
stocks is reasonably secure and prog
ress in sections of the stock list prob
able.
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