Evening star., 1937-09-25

not vet recovered vidIawr.nc.
to its normal
level. There is evidence of a long
term upward movement in building.
Stocks of raw materials and manu-
factured goods do not appear excess
sive No serious recession has pre-
viously occurred under these condl-
tions."
Possibility Of Further Decline.
There are some factors which the
board frankly says may suggest the
possibility of further decline in busi-
ness activity" and these include:
al. The abnormal labor situation,
coupled with sharply rising labor costs.
%. The practical certainty that the
Government will attempt to increase
further its regulation of private busi-
ness.
"3. The probability that an addi-
tional rise in taxes will become neces-
sary."
Now. As for what has been happen
Ing, the board says industrial activity
on the whole declined slightly in
August, and. were it not for the high
levels of production maintained in
the automobile, iron and steel and
electric power industries. the whole
average would have been lower be-
cause of the decline in transportation
activity and retail trade
Auto Industry's Position.
Incidentally. the auto industry is
going along in good fashion with a
~ per cent increase in August, 1887,
over the corresponding month in 1895,
and activity really has reached, aside
from seasonal considerations, the
highest point for any month since
October, 1929"
When we look at construction, We
fnd a lib drop from the July level
and figure only 36 per cent higher
than year ago in contracts awarded,
There is a better gain shown. about
per cent, in private residential build
ing
While the heavy industries seem
TO be using lot of electric power
and steel ingot production was higher
than in any August in the history
of the industry, the armament situa-
ton abroad probably had much to
do with it, though heavy demand
Is reported from the canning, farm
equipment and petroleum industries.
with lag from the railroad and
construction industries, which usu-
ally use plenty OF steel
Retail Trades Decline.
What is most disappointing is the
declined during August in the field
of distribution and retail trade. The
most substantial losses, according to
the Conference Board data, occurred
in the and 10 cent stores and
variety stores, but "the drop in other
divisions was also decisive"
1t is most significant that "since
the recovery peak of February the
dollar value of department store sales
has declined 4 per cent, while the
physical volume has receded per
cent"
This would seem to indicate ad-
vancing prices are meeting with some
consumer resistance, and that if labor
costs continue to force prices upward
the public will be buying less. This
In turn produces a slowing up in the
wholesale houses. and finally the
msnufac curing industries begin to lay
of workmen. All the Wagner acts in
the world will not make five days of
work when there is only work enough
for two days or three.
Indeed. the trouble with the whole
New Deal scheme OF planned econo-
my is that it never really plans 1t
allows instead any one group to
throw the whole economic system out
-. Of balance by arbitrary demands ir-
respective of economic justification.
Hull Statement Quoted.
It's the same trouble in the dicta-
torship countries, where planned
economy can be more effective be-
cause the people there are regimented
and their liberties are taken from
them, so, from purely mechanical
standpoint, price control is simpler
to operate. Yet from Cordell Hull.
Secretary of State in the Roosevelt
administration, came last week this
statement in one of his speeches:
THE broad. unsolved economic
problem of distribution is how to
fand customers to enable the ma
chinery of production to operate con-
tlnuously and fully, economically and
profltably. Our modern civilization
definitely has within its grasp the
productive means and resources for
supplying the material needs of man.
kind on standard of living never
yet attained. But production con-
tlnues to fall short, at times trag-
ically short, of its possibilities, and
We are still far from achieving a
world of contented people"
Mr.. Hull points out further that
restriction policies all over the world
have curtailed consumption and
brought misery. He assails economic
nationalism and economic isolation.
which, he says, when carried to
their logical end require complete
control of production and prices, regi-
mentation and dictatorship"
Argument of Hull.
Mr.. Hull. who is perhaps the out
standing statesman in America to-
day, discreetly avoids mention Of the
domestic policies of the New Deal,
which are gradually curtailing pro-
duction and threatening to bring
more unemployment. But his main
argument. namely, that restrictions
and barriers to external trade must
be broken down, applies equally we'll
10 restrictions that bring high prices
and stsgnate the exchange of goods
within a country.
The outlook is for more imitation
by continuous increase in Govern
ment borrowing for more price rises.
The Conference Board points out
there is room for more OF the re-
covery movement.
The truth is we have not yet re-
Hplaced the many things which woM
IL -