The Washington times., 1935-12-31
ACTIVITY LEVEL
ABOUT EQUAL
TO '33SPURT
BY LEWIS HANEY
professor OF Economics,
New York University

New York University
The latest available weekly sta
tistics show little indication Of
the let-down in activity that a
good many observers have beer
anticipating. Aside from the
usual year-end holiday shut,
downs, the recent high levels are
being well maintained. This
means a general level about equal
to the peak attained on the
1888 summer squirt, and with
that exception, the highest since
1880.
Several great uncertainties
are tending to check the rising
trend. What will Congress do?
What will the Supreme Court
say? What will happen in Eu-
rope? No one knows the an.
swer, and as the questions are
all important, some hesitation
Is natural.
There is reason to believe that
while awaiting these develop
ments, and in view of the prob
) ability of some natural lull in
the big volume Of automobile
sales, business activity is likely
to fall back a little at times
during the next month or two.
This will not be discouraging,
however, and a little cautious re-
adjustment does no harm at such
times.
The steel industry, considering
the season, may be characterized
as holding its improved position.
Operations have merely felt the
usual holiday influences, and de-
mand from large consumers shows
no significant let-down. Particu-
larly noteworthy is the gain in
steel buying on the part. of the
railways. Construction require
ments hold up we'll. The tractor
business is going strong. The in
creased. schedule Of operations of
farm equipment manufacturers
goes into effect soon. The ma
chine tool trade is optimistic.
The autOmOtive industry con-
tinues to cOnfOund the more
pessimiStic observers. A small
reduction in volume Of business
Is anticipated during January,
but the manufacturers are figur.
ing on schedules nearly Al pres
ent levels, and the surprisingly
large December sales volume,
which has kept dealer inven.
tories OF new cars down, seems
to justify their hopes.
The textile industries are
operating at . high level, and
cotton prediction gained again
last week.
Even the tagging car loading
figures furnish some encourage
ment. The seasonal decline last
week was little less than usual.
A sustained gain in shipments by
rail would be a most favorable de-
velopment.
Although retail trade conditions
have been quite "spotty," il is fair
to say that the Christmas volume
of business was good. Apparently
many people spent so much for
automobiles and travel that they
cut down on their Christmas shop
ping in a good many towns. But
in some sections, retail business
doomed, and in all the reports in
dicate that the inventories Of the
stores are in good shape.
Nothing of great Importance de-
veloped in commodity markets,
unless it be the break in hogs at
the end of the week, and the fur
ther decline in silver. The whole
sale average, however, was higher,
chiefly on account of a rise in
various foods and grains other
than wheat.
Abroad, Premier Laval managed
to win another vote of confidence,
but the margin was so narrow
that doubts concerning his posi-
tion have increased. It is gener-
ally believed that if he has to
resign, the chances will favor an
early devaluation of the franc.
Meanwhile, the franc turned
weaker and further imports of
sold into this country occurred.
This keeps alive fears that for
eign funds may be withdrawn
from our markets, causing disturb
ance especially in securities. re-
main of the opinion that if our
own political and business situa-
tions continue favorable, there is
little to fear on this score.
Signs Of some increase in con-
fidence concerning our situation
are seen in plans for plant ex-
pansion. Doubtless the Literary
Digest poll, which indicates
growing opposition to the ROOse-
welt policies, is an important
symptom. If we will stop the
waste, balance the budget, and
put recovery ahead Of sOcialiStic
reforms" business will hum.
It should be noted, however,
that in the last six months, the
Roosevelt Administration has run
up a deficit of 1.8 BILLIONS of
dollars by spending about twice as
much as it's receipts. AS long as
this sort of waste goes on, we can't
know how much Of the business
activity is real recovery and how
much is just Initiation" based
on Government debt.