Evening star., 1937-11-07
FEAR PUNCTUATES
BUSINESS HOPES
Production Shrinks Again,
but Possible Tax Action
Lends Optimism.
Special Dispatch to The Star.

NEW YORK, Nov. 6.-Business
sentiment f1uctuated uncertainty this
week between hope and fear, says
Business Week today. On the hopeful
side were rumors that Washington was
lending a more attentive ear to busi-
ness protests on tax and labor regula-
tions. The recent reduction in Sc
curity margins appeared to be the first
step toward more conciliatory attitude
to business. On the other hand, cur
rent productive activity continued to
shrink. Steel mills reduced operations
to 48.6 per cent of capacity. Whole
salers complained of hand-to-mouth
buying. Only retailers reported fair
sales gains over last year, and con-
tinued to count on doing the best
Christmas business since 1929. Com
modify prices tended to sag.
October sales of steel ran Is per
cent to 80 per cent below those of
September, the chief losers being the
makers of heavy steel. What Novem-
Der will bring depends chiefly upon
the automobile industry, whose buying
has been hand-to-mouth so far. Pig
iron output last month dropped 18 per
cent from September on daily basis,
with 80 furnaces being blown out dur
Ing the month, the sharpest reduction
since the spring of 1924.
Trade observers are wondering why
the tire companies picked a period of
heavy inventory accumulations and de-
clining prices for rubber and cotton to
stage price advance on tires going to
the replacement trade. United States
Rubber Co. started the ball rolling
with increases of per cent to per
cent, followed by other makers, who
appear to have taken pains to keep
their revisions from being uniform.
At the same time manufacturers made
q concession to big dealers by offering
them Is per cent discount on volume
over $4,000.
Railroads lost no time in accepting
the invitation of the Interstate Com
merce Commission to ask for general
increase in freight rates. This week
they filed a request for Is per cent
increase on all commodities except
some of those affected by the recently
granted rate boosts. They also asked
an increase in passenger coach rates
on Eastern lines from 2 cents to 21s
cents a mile. These increases, it is
estimated. would bring in & half bill
lion dollars additional revenue to off,
set higher operating costs, which the
roads say have risen 1868 300, 900 an
nually, compared with 1888. Mean
hill fl,n t1,-Do oxl1
delay further their purchases of new
equipment. Some foreign business is
being accepted by rail mills, but the
total is not large, chiefly because
foreign buyers are offering prices much
below quotations for domestic business.
The furniture industry has felt the
same slackening in new business dur
ing the third quarter that both steel
and textiles have experienced. During
the first quarter new orders were COM
ing in so per cent ahead of the same
months in 1886. BY the second quar-
ter this margin had shrunk to l8 per
cent and in the third a 10 per cent
loss was reported. Shipments have
held up better than orders.
Clothing markets appear to be
among the first in which the recent
reductions in raw material prices have
been reflected in finished products.
Additional shoe manufacturers have
reduced prices. Unbranded full-fash-
Toned hosiery prices have been re-
duced S per cent to 10 per cent. Re-
cent reductions in denims have been
carried through to overalls and
dungarees. Leading sheet and pillow
case producers have marked down
prices on well-known brands. And
the Is per cent reductions being Of
fered fur trappers by leading buyers
are explained by the resistance which
consumers have made toward this
years high price level, plus sthe fact
that the weather hasn't been sufi-
GENTLY cold to stimulate heavy buying.
Retailers are making special efforts
this year to reduce their stocks of fur
coats early.