Evening star., 1937-03-07
Stocks Soar to New Peaks,
With SteeIs, Motors and
Rails in Lead.
PAY BOOSTS EXPECTED
TO STIMULATE BUYING
Easter Shopping Also Increases
Demand for Goods-Cotton
Advances Sharply.
BY THOMAS E. FLANAGAN.
Associated Press Financial Writer.

Freed of steel strike threat, the
Nations business quickened its steps
along the recovery path last week.
Steel, backbone of the machine age,
held the financial and business spot
light. Mills raised operations to the
highest since October, 1929, in rush
to fill heavy orders, feed the busy
motor industry, supply material for
expanding Spring building and for
revival in rail and public utility
equipment demand.
But overshado%ing evidence OF o
mounting industrial tempo was the
prospect Of peace along the key steel
front as result of an estimated $780,
100000 wage boost, 40-hour week
for steel workers and the agreement
Of United States Steel Corp, man.
moth of the industry, to bargain with
John L. Lewis c. I. o.
The move of big steel" to recognize
the outside unionization movement,
together with the wage and hour con-
cessions, suddenly dispelled strike
clouds which had been regarded in
financial circles as the chief threat
to Spring and Summer business pros
poets. A steel tie-up, 1t was noted.
would hit motor. building and other
industries dependent upon it for ma.
terials.
Led by steel, rail and motor shares.
the stock market greeted the food OF
steel news with a dash to a new top
on the major advance from the 1882
bear market depths.
Higher Costs Cited.
A mark-up of So to So ton in steel
products to absorb higher operating
costs lent emphasis to the rising spiral
Of prices and wages. Cotton. laggard
in the commodity march to higher
levels since last Summer, spurted above
II cents a pound for nearby deliveries.
The new steel prices on the average
were described as slightly above the
1925 level.
While there was some apprehension
ascending nFices might stifen con-
sumner resistance to buying, many
merchants looked for new stimulus to
trade as rising pay rolls pour more
dollars into the business stream. Trade
reports from various centers during
the week bore indications also Of an
Easter spur to demand for goods.
The Department Of Commerce, in
its weekly business summary, said:
Trade throughout the country. both
retail and wholesale, responded to
favorable factors and moved forward
with accentuated tempo. Fair weather
and the near approach to Easter were
the major elements which filled the
stores of the country with shoppers
and brought wholesale orders into
higher ground.
The industrial picture showed
further improvement and reports of
wage increases In one form or another
continued. Some cities noted unpre-
cedented travel.
Easter buying was going forward
under a full head of steam in all
wholesale centers, with large volume
Of fill-in orders"
Buoyed by sharp advances in motor
and steel output, the Associated Press
index of industrial activity rose to
1851 per cent of the 1929-30 level.
This was a new high for the recovery
and compared with 1881 the previous
week and so in the comparable 1886
period.
The steel industry boosted operating
schedules to 85.8 per cent of capacity
from 82.5 the previous week, the
American Iron and Steel Institute re-
ported. The comparable figure year
ago was 53.5.
At that level, steel men figured the
industry was turning out a record
amount Of metal and there was a wide
belief 1t was nearing effective capacity
Of its most efficient units. Scrap prices
continued to advance as export joined
with home demand for supplies.
Making up some of the loss in out
put during the General Motors strike
tie-up earlier in the year, automobile
productio- expanded as If out to over
take 1929 figures. Grams reports
put the weeks output at 126,975 units,
compared with Ill, ,915 the week before
and 9l,705 in the corresponding 1895
week.
Spurred by the advance in raw cot
ton and the rising wage trend, a new
wave Of cloth buying rolled into textile
centers. Mills for some time have had
heavy untitled orders and have been
using cotton at a record rate
French Franc Slumps.
A break in the French franc in for
eign exchange dealings turned atten-
ton on a broad advance in world
commodity prices in recent months,
attributed partly to devaluation Of the
gold bloc currencies last Fall.
Seasonal influences kept railroad
car loadings and electric power pro-
duction In check, although they held
comfortable margins Of increase over
comparable 1896 figures. Spring build
ing preparations were apparent In the
heaviest February engineering project
awards since 1880.
Meanwhile a lull in new financing
In the securities market was prolonged
while bankers debated chances of q
rise in money rates as q consequence
Of business and price trends and the
reduction in the supply Of loanable
funds by the Federal Reserve Board.
The drop in new offerings was attrib-
uted in part to an unsettled bond
market, still in evidence during the
week as Federal obligations eased, fol-
lowed by a number Of top-grade corpo-
rate issues.
With the approach of Spring, an
other upturn In business demand for
credit was seen in banking figures.
Expansion in loans to private borrow
ers was expected to act as a powerful
Offset to prospective reduction in Gov.
ernment borrowing, made possible In
part by anticipated heavy March 10
tax receipts.