Evening star., 1936-04-05
INDUSTRY PUSHES
UPWARD STEADILY
DESPITE BARRIERS
Momentum of First Quarter
Offsets Floods, Tax and
, Foreign Situations.
$500, ,00O,0 900 DAMAGE
SEEN IN FLOOD AREAS
Heavy Spending for Reconstruc-
tion and Replacement Expected
to Cover Many Months.
BY CHARLES F. SPEARE.
Special Dispatch to The Star.

DA SHIhhLES r. STEhhE.
Special Dispatch to The Star.
NEW YORK, April 4.-The Ameri-
can business world enters the second
quarter of the year with reasonable
expectation of enjoying satisfactory
Spring trade.
The momentum of the first quarter
has been sufficient to offset the ef-
fectS of floods, new tax proposals
that will weigh most heavily on cor
porations, an unbalanced budget and
European credit and po-
ltical conditions. 1t was reflected
In rising iron and steel production
an expansion in automobile output
and in car loadings, in bank clear
ings, retail and wholesale distribu-
ton Of merchandise and in contracts
for new building.
The returns of corporations and
institutions were sufficiently larger
in the March quarter of 1886 to per-
init of dividends 20 per cent in excess
of those of the same period last year
to a compilation made by
the National City Bank and published
in its April circular. profits in 1885
Of 2.0l0 companies were AZ per cent
larger than in 1894. They repre-
sented yield on capital of 81 pei
cent, against 3.5 per cent in 1884.
Flood Loss at 500 Millions.
1t is estimated that the losses by
flood in New. England and in Penn
sylvania and the Ohio River Valley
districts approximated $500, 200, 600
1t will take these sections of the
country many months to absorb the
costs. Meanwhile they will be spend
ing for reconstruction and replace
giving employment and creating
broader markets for many industries
Already the pickup in iron and
steel has been remarkable Steel pro-
duction this week is at 62la per cent
Of capacity, the highest since June
1890. This Is due in most part to
The activity in the automotive indus
try, whose April output is placed at
500, 900 cars. Railroads and construc-
ton interests are extending their Or
ders for materials. Electric power
production for the week of March 28
ran per cent over this week in 1885,
in spite of the effect of high water
In the New England and Middle At
antic industrial centers.
Bonus Effects Due.
In the current quarter of the year
the effect of bonus money spending
will be first visible.
Without doubt a part of the ad-
vance orders for automobiles is de-
rived from this source, also a certain
amount of buying of building ma
terials for new construction or for
repairs. After June Is there will be
a sum, now estimated at $1,000, ,000,-
BOO, to be turned into the market
for consumers goods chiefly, though
tavorably influencing also the mar
ket for capital goods, and supple
the present purchasing power
If farmers, those in the trades, in
,he professions and in clerical posi-
lions whose average income is greater
Than at any time since 1882.
In January and February the cash
income of farmers was per cent
above last year, without benefit pay
nents. In the same period of 1885
nearly IS per cent of cash income
was derived from the A. A. A.
Except in the flood districts, retail
trade is now booming. 1t will prob
IDLY reach its crest in the early part
If the Summer.
100000 Still Jobless.
This picture Of recovery and Of
United prosperity seems to avoid the
blight of the 100000 unemployed
md as many more who have just
enough income to keep of the bread
inc. This is the great problem.
The human factors in it are the
Unknown quantity in next November's
Election. 1t is fortunate that there
S no imitation in sight, that the cost
# foodstuffs Is falling and that fur
her declines in this group are prob
lble in view Of the large acreage
TAINTED to wheat, to be harvested be-
ween May and September.
The proportions of the stock mar
et recently have been small, COM
jared with those in the first half Of
farch. The diminishing volumes,
lowever, have not much affected the
eneral price level or seriously inter-
upted trend that has been upward
or over a year.
Emphasis in speculative circles this
Teek has been on the industrial
hares, though they are, as a class,
ar in advance of all others. It is
'orth noting, however, that the rates
harged by bankers on industrial loans
ow being offered is well In excess of
hose to borrowers in the public utility
nd railroad field in spite of the fact
hat the last two are subject to strict
nd increasing regulation from Fed
(dl ana SCaLc auUIlOrlCl6S ana LlldL
heir rates are declining from year to
ear.
Tax Program Opposed.
Our tax program moves haltingly
,ward a conclusion. It Is opposed
Y many interests. Exceptions to its
rovisions for taxing the undistributed
lrplus of corporations are becoming
lore frequent. More may be given
p in taxes than will be realized un-
er the new measure.
The last quarter of the fiscal year
being entered with little indication
what the final result of the IL
lonths' operations will be, as be-
veen income and outgo. Very little
rogress in reducing Government ex-
enses can be observed in q study Of
lrrent Treasury figures.
It Is amazing that, In this situation,
,e list of Government obligations,
rect and guaranteed, remains so
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