The Washington times., 1935-12-03
NEWS
DISTINCTLY
CHEERFUL
BY LEWIS HANEY
professor Of Economics, New York
uniVeraltY)

buSlIlGoS 1dSG WCCh Woo AAS
tinctly cheerful. Industrial ac-
tivity, as measured by the lead
ing indexes, has risen close to
the peak attained in the first New
Deal initiation boomlet Of mid
1898: With that exception it
is probably the highest since 1880.
, Reports from the various Sec
tionS of the country are more
uniform, indicating that condi'
tions are less "spotty." All Sec
tionS report a good response to
Seasonably cold weather has been
shown by retail trade, and signs
of active holiday buying are gen.
; eral. An increase in building ac-
: tivity is reported on all hands.
Many observers are discussing
the possibility Of a "let-down" in
the early part of next year as
result of slowing UP in automo-
bile production between the arti-
ficial squirt this fall and the
natural spring peak next May.
. But this discussion is as yet
, somewhat academic, and even II
the motor business has a lull, 1T
is possible that the growth in
building activity and other lines
may offset it. And If WPA
spending is supplemented by a
soldiers bonus" distribution OF
some sort, it may we'll be that
the demand for new cars Will
show only a little recession.
The steel industry last week
. continued to forge ahead in activ-
ity. Considering the season, 1t ap-
, pears to have touched a new high
. for the year. One statistical organ
, ization, after making some allow
{ ance for the effects Of the sea-
sonal change caused by the earlier
showing Of automobile models, eS'
- Inmates steel activity at 80.4 per
i cent of normal a week ago,
4 against AL per cent a year ago.
! Automobile prod uction con-
tinued to climb, but more gradual
s ", as the manufacturers have at
tanned level Of output nearly, If
s not quite, sufficient to take care
II Of demand. ....
s. Statistically. this industry pre-
sentS an interesting problem. 1t Is
. now impossible to know what al
loWance should be made for the
merely seasonal movement, and
!. the significance of current levels
b Of all production indexes, is there
: fore in doubt. This fact, however,
= makes no difference in the out
/ look for the year, and some de-
cline in the indexes" later on
!. should not be disturbing.
| Lumber production show ed
some recovery. and cotton cloth
production picked up as expected.
Building activity spurted in most
sections, and it seems probable
that this great branch of industry
will become the chief factor in fur
ther expansion.
Il Best of all, railway carloadings
1 gained. While this was partly
:. the result Of increased coal ship
ments, and the uncertain statisti-
cal measurements Of the auto
mobile and steel industries are a
factor, it is a hopeful indication.
It's continuance would be the most
favorable symptom that could
occur.
Wholesale commodity prices re-
acted. A slump in the grains was
chiefly due to a reaction from
preceding war-scare squirt,
occasioned by renewed peace pro-
posals made to Mussolini. Lard,
cotton, silk, and wool tops were
also lower. But livestock and
i, meats rose, and rubber, tin, and
: cocoa were higher.
;; In general. there are enough
financial and international un-
certaintieS at present to make any
considerable rise in cammodity
markets improbable. But the cost
of living continues to climb grad
ually. (ShoeS now seem to be
slated for an advanceO In gen.
eral, I agree with those who antici-
!. pate much higher price levels
eventually.
Abroad, the Laval adminiStra-
ton in France received a new
lease on life, and this brought
some recovery in franc exchange.
French political difficulties, how
ever, are by no means over, and
the crucial matter of approving
the Laval administrations econ
omy measures remains to be set
tied. The drift toward another
European war, and the consequent
burden of unproductive expendi-
lures for armament, now seem to
!. make the French deflationary
program almost hopeless. am
therefore becoming more dis
posed to look for an ultimate de-
valuation of the franc than I have
been.
I do not, however, see how any
such development could help but
eventually increase the general
. trend toward initiation.
NEEao,a~ DHoJIIna