The times-news., 1938-06-22
HOPE IS SLIGHT
FOR UPTREND
BEFORE SPRING
Roosevelt Told Volume Of
Housing Work Single
Favorable Factor
By ARTHUR F. DEGREVE
Copyright, 1888, bv United Press

WASHINGTON, June %. IIPl.
President Roosevelt has been in
formed by his economic advisers
that there is little hope OF a DuSl-
ness upswing until late in the
autumn and that the real effect
of the new $3,753, 3,0OO,OO spend,
ing-lending will not be felt until
next spring, the United Press
learned last night.
The only favorable factor IN
the situation, he was told, is that
the volume of new housing con-
struction is being maintained IN
the face of other unfavorable
economic conditions.
Statistics and other current data
on which the chief executives
aides based their forecast lndl-
cate:
That huge agricultural surpluses
may force farm prices lower TINS
summer.
That there has been a slight
drop in the cost of living during
the past three months due chiefly
to a reduction in food prices.
That little OF no headwav has
been made by the nation toward
the equalized price structure
which the president repeatedly
has advocated.
That heavy inventories in some
industries are being depleted,
forecasting an increase in produc-
ton.
That the new wages-hours leg
islation will operate to bulwark
tagging consumer purchasing pow
Ell by preventing a collapse of the
wage structure.
The presidents advisers are
genuinely worried about the price
situation. The immediate future
of agricultural prices dominates
their concern. One government
economist, who declined the use
of his name but whose wide
knowledge and percentage of ac-
curacy in predicting the course
of future trade developments IS
well known. refused to even "haz-
ard guess" of the potentialities
in the present situation.
Their concern is eased partial
ly by provision in the recovery
relief bill which carries a S212,-
100000 subsidy to cotton, wheat,
corn, tobacco and rice farmers.
Even this drop to the farm price
structure will be insufficient to
cope with the situation, it was
said, if agricultural prices skid
under the weight of huge sur
pluses. This condition will be-
come even more serious, the Uni
ted Press was informed, if prices
of industrial products begin to
climb because farmers will not
have money to buy them.
Industrial production on June
/ was 1922 on the index figure OF
100, slightly above that of two
years ago. But survey of latest
statistics available discloses that
the disjointed price structure of
which the president has complain
ed, still remains upright today.
This example was cited by an
economist:
The price of raw materials has
dropped from basic average of
85.6 a year ago to 70.9 today.
The price of semi-manufactured
products fell from sc year ago
to 1878 today. But the cost of
finished products which rose to
S7.6 percent a year ago has fall
len to the average of 1922 as COM
pared with 80.4 two years ago.
These prices mean that sellers
and producers of raw materials
get 16 percent less for their prod
uct than they got year ago;
that the operator in semi-manu-
factured goods gets 16 per cent
less while there has been only a
6 percent cut in the receipts from
finished goods at present prices.
This situation can be corrected
only if the prices of finished
products remain comparatively
stable until consuming power has
been raised in the other two
categories to permit absorption of
the products of the third group,
it was stated.