Evening star., 1936-08-02
CAUTION ADVISED
AS COUNTRY GOES
ON BUYING SPREE
Overdose of Enthusiasm
May Bring Trouble Later,
Writer Warns.
RISING COST OF FOOD
TO CUT BUYING POWER
Effects of Bonus Cash and Relief
Outlay Declared Temporary.
Store Stocks Piled Up.
BY J. G. DONL.EY.

ETecial D.spatcn 10 Tne star.
NEW YORK, August 1.-When bull
shness in Wall Street reaches the
point of unanimity, so that no dis
senting voice Is heard amid the gen.
eral prognosis that stocks are going
to continue up and up. willy and ex-
perienced traders shift their positions
to the bear side of the market.
But that is a maneuver very few
business men ever follow. And busi-
ness sometimes suffers the same set
backs after too much enthusiasm
which often affiict the stock market.
Right now there are signs Of more
enthusiasm than may be good for the
future of general business activity.
Some observers are growing a bit
concerned over the near-crop failures
in some parts Of the country. with
signs that rising cost of food may
soon begin to shave something of
consumer purchasing power. They
are inclined to credit o considerable
amount of recent consumer spending
to the bonus distribution, which they
figure has now expended about 60 per
cent Of its effect upon buying.
Effect Only Temporary.
As one man put it to the writer,
The bonus, as a source of public
income, may be set down as what
in the lingo of corporation revenue
accounts is called 'non-recurring in
come. And have a suspicion that
the Summer bulge in the relief work
program must be put under the same
heading.
Government spending to make
work has been concentrated so Is to
offset an expected Summer recession
in the hope Of starting something
that would carry on Of its own mo-
mentum. Some Of it will carry on
and spread, but our past experience
has shown that lot Of it will be dead
ended when the money is gone. The
very limitations Of the appropriation
win neceSsitate q thinner spreading
OF funds over Autumn months"
Meanwhile, stores are stocking to
the limit in expectation Of what some
Of the business reviewers call the
heaviest consumer demand expert
enced since 1929" And country
merchants have reinstated orders can
celed a month ago. We read of
hectic activity" which Is q re-
miniscent phrase not exactly con-
fdence-inspiring. Even in areas af-
fected by the drought, where relief
payments are creating q temporary
flush feeling, retail distribution Is
widening steadily.
Great While 1t Lasts.
The country is apparently on a sort
Of consumers buying spree" which is
great stuff while it lasts, but some
times leaves headache on the morn
ing after.
There is, Of course, a great deal Of
necessitous buying, long held back by
lowered incomes and fear Of the fu-
ture. But the Dun & Bradstreet Re
view says that. in the retail markets,
much Of the weeks buying was
centered in jewelry, silverware, radios
and pianos" And it remarks further
that interest was unabated in fur
promotions" In the wholesale mar
kets It Is said that, "in spite of the
higher prices, recorders for fur gar
ments continued to increase, with the
better grades predominating."
The National Piano Manufacturers
Association reports that the first six
months Of this year were the best
in Is years and As per cent ahead of
the like period last year. Business
reviewers say that makers Of radios
and pianos are trailing their orders,
despite weekly increases in schedules"
Caution Advised.
1t is highly unpopular to grow cap
uious of industrial operations "appar-
emily impervious to the influences
ordinarily dominant at this period"
And it is difficult to find fault with
rising activity in business in any form.
But, knowing what we all know
about unemployment and the still
convalescent state Of the country's
fundamental economic health, 1t
would seem the part Of business wis
dom, while going along with the crowd
as far as 1t goes. to keep q step be-
hind 1t.
As one canny stock trader used to
put it, The markets will also be open
tomorrow"
(Copyright, 1850