Evening star., 1938-05-22
Heavy Lines lust Coasting,
Factories Wait for
Buying Revival.
BANK CLEARINGS SHOW
ONLY SLIGHT UPTURN
Carnegie.1llinois Action Helps
Steel Price Situation, but
Scrap Says to New Low.
BY THOMAS f. FLANAGAN,


Statistical evidence made availab BILE
during the week just ended indicated
the Nations heavy industries-steei
and the like-Were doing little better
| than coasting.
The record of consumers goods in
dustries showed that makers of shoes,
motors and textiles had throttled down
operations pending signs of reviving
| purchasing power.
On still another business 'front.'
retail trade-unseasonably cold wealth.
er was a discouraging factor in some
parts of the country.
Bank clearings usually provide a
guide to the ebb and flow of trade
and industry. Business writers noted
that, although clearings increased in
the latest week, the gain at the cor
responding period last year was about
four times as great.
In recent weeks reports of price,
cutting by some steel companies had
left industrial consumers in an un-
certain mood. This week, however,
the United States Steel Corp-Which
traditionally has set the pace for other
units in pricing policies-put an end
temporarily to such unrest.
Prices Reaffirmed.
Its principal operating subsidiary,
the Carnegie-Illinois Steel Corp, re-
affirmed prices on most products for
the third quarter. This action. while
tending to remove apprehension of
further price-cutting, had broader
meaning. experts said It served to
hint that the steel industry would
keep wage rates steady. This inter-
probation sprang from the fact that
repeatedly in the past six months Of
flcials of leading companies had said
no price cuts could be put through
without wage reductions.
On the other hand a decline in
scrap prices gave steel men food for
sober thought. Not long ago, the
ruling opinion was that scrap steel
had bumped bottom. The dip in the
latest week to the lowest point since
July. 1885, reminded analysts that
users Of steel were in no rush to re.
plenish raw material stockSS
The decline in scrap steel prices was
followed by mark-down in the price
of domestic copper. Meanwhile
economists resumed discussion Of the
question of whether lower prices would
stimulate demand. The fact that the
pace of copper demand failed to
quicken as the result of lower quota
tlons provided Sidelight on the ap-
parent unwillingness of industry to
make forward inventory commit
mentS.
Stores Slash Prices.
MerchandiserS in some Eastern in
dustrial regions tried to stimulate
buying through price cuts This was
symptomatic Of desire to speed up
turnover and to reduce inventories.
If general consumer income holds
ground, such efforts may help Jolt
general business off dead center, some
argued.
On the other side of the equation.
however, was the wage factor. One
manufacturing company announced
10 per cent pay cut for $4,000 salaried
employees. This was made necessary.
the company explained. by shrinkage
of orders. If enough other companies
reduce pay, some experts said. bene-
fits flowing from price reductions
would be Offset.
The American Iron g. Steel In
stitute estimated operations at 30.7
per cent of capacity, compared with
3O.4 the previous week, 324 month
ago and 80 year ago. Carloadlngs
in the week ended May Is were re-
ported at SAL ,813 by the Association
of American Railroads, up IL per
cent from the previous week but 296
per cent under 1887.
Power Output Up.
Electricity output was 1867, ,613 600
kilowatt hours in the week ended May
Is. the Edison Electric Institute re-
ported. Although slightly above the
previous week, this was 103 per cent
below last year. Automobile produc-
ton. at 46,810 units, compared with
47,415 the week before and 136,438
a year ago, Wards reported.
The Associated Press index OF In
dustrial activity advanced to 66.8 from
66.2 the preceding week and compared
with 1882 in the like 1887 week.
On the New York Stock Exchange
shares idled along an irregular groove.
The bond market drifted down. On
the average commodities receded to
the lowest level since 1884.
In it's weekly review OF business
conditions in 36 cities. the Commerce
Department reported nearly all cities
continued to register decreases"
These downturns ranged about IS
per cent below the levels prevailing at
this time year ago. Reports were
unanimous in stating that
the decreases for the current week
were attributable to unseasonably
cold or rainy weather.
wholesale markets generally con-
tinued weak, with conditions closely
following the present retail trend"
the department said. while some
slight relative improvement was noted
in certain sections of the country and
of the trade, the general disposition
was for the purchase of seasonal items
for prompt shipment"