Evening star., 1938-04-11
APRIL REGARDED
AS TEST PERIOD
Month Expected to Show
How Much Shocks Have
Affected Trade.
Special Dispatch to The Star,

NEW 4OHh, April 11.-The month
6f April should tell how far the shocks
to business confidence which occurred
during March will affect business
activity itself, according to Business
Week today.
The past month has been marked
by the most serious brokerage failure
in years, by the grant to the railroads
Of freight rate increase deemed
wholly inadequate to their needs, by
series Of European crises and by an
Unexpectedly vigorous continuance OF
administration pressure for more re-
forms regardless of the economic sit
uation.
There was not time for these events
to be reflected more than slightly in
the March production indexes. April
is the first month to feel their effects
fully, and this month will show how
far tendencies toward a business pick
up are still at work
SndIp DTOD SUInplctcu.
The comprehensive Federal Reserve
monthly index of manufacturing and
mining production had practically
completed its rapid decline by jan
uary, when it stood at 80 per cent Of
the 1923-l925 average, or 81 points
below August. In February it was 10,
and for March the early estimates are
78 or 70. In these three months pro-
duction had apparently found base
line to which it could hold.
During March the non-durable and
consumers goods on the whole made
their usual seasonal increase, whereas
the durable and capital goods, like
automobile and lumber, made a little
less than their usual seasonal increase,
or in some cases none at all. For the
nOn-durable consumers goods to hold
and improve their slight gains to date
requires two things-maintenance Of
retail sales, and a pickup in the
capital goods, with the effect of dis
tributing more purchasing power to
workers and other factors of produc-
ton.
Power Index Steady.
The electric power index for the
week ended April is practically un-
changed. But carloadings for the same
week dropped sharply, making it clear
that the rise of the preceding week
| had been wholly artificial-that is, an
effort to beat the gun" on the rate
| increases.
| Automobile output in the same week
failed to make the natural spring in
crease. Above all, steel production,
which in the week mentioned made
| very good rise, has slumped again, and
was scheduled last Monday at 1926 per
cent of capacity, down from 357 per
cent.
The new Federal Reserve index of
department store sales showed declines
of either Is or II per cent in each week
Of March, as compared to 1897. This
poor comparison, however, is in large
part due to the fact that March was
the Easter shopping month last year,
whereas April will be this year. The
Federal Reserve statisticians them
| selves place their preliminary sea-
sonally adjusted index for March as
a whole at 85-down points from
1887 and 3 points from February, 1898.
Capital Is Watched.
Business has been disturbed latelv
by the continued strength of New Deal
| notions Of reform in the midst of the
crisis, as evidenced by the one-com-
missioner report on the telephone in
dustry, progress of the reorganization
| bill, the personnel of the T. v. A. In
vestigation Committee and other de-
velopments. But it is watching with
even greater interest for the next
rabbits that will be brought out Of
the hat
An r. F. c. lending program is be-
ing whipped into shape; the Presi-
dents message to Congress on the rail-
road problem is due the w. P. A. ap-
preparation is being prepared within
that organization. and plans of all
sorts to stop the recession or save the
railroads" are bobbing about in the
Washington kettle.
There is more and more reason to
believe that spending will ultimately
prove the administrations big rabbit.
The timing is uncertain, for many hieh
offlcials are still opposed to the policy.
Election day, however, is inexorably
approaching. Some time within the
next six months business must be pre.
pared for renewal of old-fashioned
pump-prlming. If the capital goods
industries lack the confidence to
launch their own recovery, it seems
that another consumers goods revival
may b. tried.