Evening star., 1936-08-16
Factory Activity De3lines
After Abnormal Speed
for Two Months.
DROUGHT CUTS RETAIL
TRADE IN SOME AREAS
Eager Buyers Show Optimism and
Confidence on Wholesale Mar
kets During Week.
BY THOMAS f. FLANAGAN,
Associated Press Financial Writer.

After Steaming ahead with abnormal
dustry finally yielded to the influence
of Summer last week, while retail
trade, although generally resilient,
wilted under drought in some regions.
After climbing for 10 consecutive
weeks, the Associated Press index of
industrial activity faltered. 1t de-
clined to 947 from 95.8 last week, the
highest point since February, 1880. A
year ago it stood at 1911.
The Department Of Commerce, In
its weekly business survey Of 35 cities,
said: The waning of the Summer
season revealed enlivened consumer
interest in final promotionaI events
and, with the retail volume augmented
by a more noticeable trend to Fall
merchandise, a pronounced margin
of gain over the comparable 1885
period resulted.
| There were some instances Of mod
crate relaxation from the recent alb
normally sharp week-to-week gains,
but in the main last years records
were substantially eclipsed and some
cities gained also over the previous
good week.
Eager buyers, rejecting optimism
| and confidence, crowded the whole
sale markets" 1t said.
Steel Operations Down.
Vacation shut-downs in some mills
and modest slackening Of new busi-
ness at few points contributed TO
decline in steel operations. The
| American Iron g. Steel Institute esti-
mated output last week down to 70
per cent of capacity from TIA per
cent the week before and compared
with 48.l per cent in the like 1885
! period.
Nevertheless. steel experts said the
strong tide Of improvement in the
| durable goods division had brought
well-suStained demand for structural
steel, bars and sheets.
Meanwhile sharp advances in scrap
prices at all important centers bore
witness to pressure on steel mills to
meet immediate consumer needs.
Rejecting manufacturers prepara-
tionS for output of new models, auto
mobile production fell sharply.
Grams estimated the weeks total down
to 56,679 from S1,704 the preceding
week and compared with $685. in
the similar period year ago.
Word from the motor front tndi-
Gated that makers, encouraged by in
dications of stoutening buying power
and sales of large percentage Of sec
ond-hand cars which had been over
hanging the market would compress
"change-over" work into the Short
est possible period.
Freight Loadings Drop.
Downturns in shipments of miscel-
laneous freight, coal and grains de-
pressed carloadings 26 per cent in
the week ended August 8, but the total,
728, ,2e3 cars, was ISL per cent ahead
of a year ago.
Electricity generated in the week
ended August 8. at 2,079, ,149, 900 kilo-
watt hours, was slightly up from the
preceding week and 14.3 per cent bet
ter than in the like week last year.
Continued heavy industrial demand
for power, refrigeration and irriga-
ton pumping in some sections helped
keep the total up. power men said.
The deep cut in the corn crop and
the reduced wheat yield indicated by
the Department of Agriculture ar
rested the attention of analysts eager
to gauge possible repercusSions on gen.
eral business.
As of August the department esti-
mated the corn crop down to 1,439,-
100000 bushels from the 2.244 ,o00, 900
total indicated on July l. Wheat out
put was cut to $4,000, 900 bushels from
100000 estimated on July /.
Economists said relief funds In af-
tlicted areas and higher grain prices
in sectors not affected would go long
way in bolstering farm purchasing
power.
FOOdStuffs on Upgrade.
They said that with the country at
large paying higher prices for food
stuffs there might be somewhat less
money available for non-farm prod
ucts. On the other hand, they stressed
that with heavy industry gathering
momentum, additional buying energy
lies in the offing from this source.
One Of the brightest spots of the
week on heavy industry's ledger was
the indication that construction in
the West is expanding at rate which
compares favorably with recent brisk
gains in the East.
The oil industry occupied a high
position on the roster Of improvement.
Statisticians noted record consumption
of gasoline and oil, comparative ball
ance in the output of and demand for
crude oil and price stability.
On the financial horizon was the
mirror of improvement already scored
by business. Although the output Of
corporate earnings reports slackened
the figures continued fatter than in
like periods a year ago. Meanwhile
more liberal dividends remained In
fashion.
Shares on the New York Stock Ex-
change had spell Of irreglarity as
traders viewed the almost uninter.
rupted climb from the years low at
the end of April and wondered whether
prices had outdistanced business i'm.
provement.
U. S. Bonds Climb.
The bond market gave fairly good
account Of itself. Investment circles
were primarily interested in the rise
Of some Government bonds to new
highs following the statement of Sec
retary of the Treasury Morgenthau
that trade and industrial recovery
had swelled Federal revenues.
The money market saw excess re-
serves OF Federal Reserve member
Icoe rAIIaITcrraxy 49,. q