Evening star., 1937-10-03
TRADE IS BOOSTED
BY BRISK DEMAND,
INDUSTRY BEHIND
LulI in Steel and Other Lines
Contrasts With Pace
Year Ago.
SOME HESITANCY LAID
TO DROP IN MARKETS
Most Business Men and Econo-
mists Dispute Stocks Reputation
as Forecaster of Trends.
BY THOMAS E. FLANAGAN,
Associated Press Financial Writer.

BY THOMAS E. FLANAGAN,
Associated Press Financial Writer.
Brisk demand for goods across the
Nations retail counters impaired an
Autumn tang to trade reports last
week, but industry generally, it ap-
peared, lacked seasonal snap and for
ward drive.
The contrast with the recovery
momentum business had year ago,
sharpened along the industrial front.
Steel production, for instance, dropped
below the comparable operating rate
last year, the first year-to-year de-
cline since February, 1896.
A rally in stocks interrupted the
shrinkage in share prices since mid
August and frightened the atmos-
phere in Wall Street. Bond men
took hope as the first new corporate
issue of any consequence since July
was offered to investors. A source
of more vigor opened to industry as
automobile makers hurried to get into
production of new models.
Effects of Slump Debated.
What the business aftermath Of
the fall in speculative markets would
be, however, was still a much-dis-
cussed question in financial circles.
Some reports attributed hesitancy IN
buying at wholesale and in raw ma
terial markets to the influence of the
fall in security and commodity prices.
Tv,, ,,,1hItr 0ft H. ~
most business leaders and economists
disputed the stock markets reputa-
tior as forecaster of business
trends.
The United States Department of
Commerce, in its weekly survey of 81
key cities, said there were indica-
tions that the favorable trends which
characterized retail trade during Sep
tember will carry over into the early
days of October"
I'm limited number of cities" it
added, some resistance to the upward
movement was encountered due to the
stock market situation. The melting
away of values among security holders
and apprehension as to the future
combined to take some toll. But up
to the present time this factor has
not proved more than minor.
"In the rank and file of areas trade
for the week occupied advanced ground
over the same period last year. Mer-
chants. as a rule, seemed inclined to
view the immediate future with op-
timism.
% Cities Show Big Gains.
"Of the 81 reporting cities, 81 re-
ported substantial gains in retail trade
compared with the same period last
year. The closing week in September
clearly indicated that earlier optimism
displayed by business and industry
regarding an upward swing in Fall
and Winter trade has not been mis-
placed"
With steel, residential building and
cotton manufacturing under the COM
parable 1886 figures, the Associated
Press weekly index of industrial ac-
tivity fell to the lowest since last
February. On basis of latest figures,
adjusted for seasonal fluctuations, the
index stood at 102 per cent of the
l929-30 average, compared with 1892
the previous week and 964 year ago.
The index for residential building,
hit few months ago by rising costs,
worked out at 60.3, against 679 a
year ago.
Prospects of at least tapering in
the advance of costs were held out to
construction men as metal prices were
marked down in wake of the fall in
other prices recently. Copper for de-
livery in the United States was revised
to II cents pound, compared with
top OF II at the recovery peak in
primary commodity prices last Spring.
The steel scrap quotation also was
lowered in the Pittsburgh area.
Offer More Resistance.
Elsewhere in commodity markets
prices offered more resistance. Buyers
in wholesale markets followed the
| trend of primary staples closely for
cues. In cotton textiles and other
markets, falling quotations for raw
materials have been considered an un-
settling influence retarding resumption
of the sweeping forward buying move
ment under way last year.
Aided by the haulage of large crops
to markets. railroad carloadings again
increased, touching the highest point
for the season since 1880. Loadings
for the week ended September 25
amounted to 840,446 cars. against
826,565 the previous week and 807.243
in the 1886 period.
The American Iron and Steel In
stitute estimated operations of the
industry the past week were curtailed
to 74.4 per cent of capacity from 76.1
the preceding week and 754 in the
corresponding 1886 week. Some au-
thorities argued this was smaller
recession than might have been ex-
pected in light of the shrinkage in the
backlog of untitled orders and leisurely
pace Of new buying.
Home Building Lays.
Most disappointing to many analysts
who had expected more vigor to the
industrial pace at this time was the
recession in residential building. Earlier
in the year expansion in home build
ing had been counted upon to con-
tinue and spread widening circle
(See TRADE, Page E-2.)
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