The Washington times., 1935-11-02
NEW CONFIDENCE SEEN
UNLEASH|NG GREAT
INITIATION FORCES
BY LEWIS HANEY
Professor of Economics New York University

There has enough improvement in business conditions
to allow considerable increase in confidence and this
tending unleash the great forces of initiation that lie
derneah There enough doubts and uncertainties still to
hesitation but time goes by and nothing bad
happens these doubts taken less seriously
For example, looks back the past two months it
is series of buying the
commodity markets. each followed by lulL The periods
of war scares have had something with this but
becoming increasingly probable that general European
will and that the ltaloEthoplan affair will
be very large factor in the worlds business More
important has been the tendency to of buying in
tcipaton of initiation Buyers rush for while, and then
wait for the inflationary rise to show up
The commodity markets just appear to be in Of
the lus illustrated by the ledown buying of
ferrous metals But at this writing the stock market IS
strong public officials have recently felt it necessary
prepare abs by warning against nflationary boom
In good many cases. the volume Of forward buying has
been quite heavy and untitled orders the books of
ducers sufficient to make them disposed to hold their
ground and wait for the next buying
The result that initiation has been gradually taking
effect probably only question of time until breaks
out more actively when commodity prices will rise more
sharply Certainly there possibility of another reaction
but against this the possibility that the may continue
and the probability that eventually prices will be much higher
reasonably certain that the New Deal Administration
going allow any business reaction next year, and that
the tendency will all be toward stimulating business by such
borrowing and spending may be required for
that purpose.
Some uncertainty the decisions of the Supreme
affects the AAA and the Bankhead Act and damper
the cotton market Aside from this however, the trend
be toward somewhat higher cotton prices the
seasonal hedge selling tapers off, The peak the crop
ment has probably been
Both domestic and foreign inquiries for have in
creased forwardngs to domestic mills have gained and the
takngs larger than last year 1t is notable that the
mills have shown tendency to increase their stocks
Exports of cotton have increased and factor in this
the fact that American cotton has continued sell lower
comparison with the nearly comparable grade of Indian
cotton year ago the price of Indian per
cent of American, while now it is 839 per cent
The industrial demand for cotton this stronger
as automobile production stepped up the building trades
continue to Increase gradually and the demand from bag
trade Increases While there has been u the demand
for yarns and fine goods the large untitled orders
facturerS insure firm attitude Meanwhile the wholesale and
retail dry goods sales have gained
In general mill activity hgh and spndles probably
operating at nearly 100 per single shaft capacity
In view OF the activity wholesale business seems that mill
activity will be sustained during the balance year.
Steel production is holding WELL in of the Gin between"
situation In the automobile business The general is
wave, and are iqudatng their low steel Meanwhile
Pig iron prices have been advanced The buying wave
therefore likely to bring advance in prices
While increased structural probable on a
count OF pubic works. these not likely be effective
until next While there has been improvement
the demand for pipe both standard pipe and line ppe
ume OF railway buying much restricted the whole
am inclined to doubt that there will be any general rise in
steel prices this There little prospect an increased
total demand until next year. and the pig partly
offset by the decline in scrap
But decline steel prices probable and with the
OUTLOOK taVong some rise the general buying
is plainly Indicated