The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1938-12-20

lCS dangers, AOL
1t may cause a
false feeling of
security. The
fact is that the
statistical rise Lewis Haney
is partly due to the increase in
electric power output, which has
very little, indeed, to do with bust
ness activity-being mostly domes
tic use in homes.
Probably. too, no adequate al
lowance for seasonal variation in
automobile production can be
made, and this makes the gain
seem larger than it is.
EXERCISE CAUTION
In other words, it seems prob
able that q month or two of re-
action in business will be re-
qutred early next year. And,
while this Is desirable in the inter-
est of sustained recovery, we
should not get too bulliSh con-
corning the immediate future.
The steel industry almost GER
tainly faces some setback in order
to allow the re-eStabliShment OF a
bitter adjustment Of production
to the quantity demanded at
present prices. This appears to
be already occurring at Cleveland
and youngstown. But the longer
view ahead is favorable.
It is especially notable that
steel prices have firmed up, in
Guiding such shaky items as
sheets and nails. And the in
creased buying by railways. to-
gether with large inquiries for
structural steel, is helping. In
the South, the Tennessee Coal,
Iron and Railroad Company &C.
tually shows increased operations
and enough orders on the book
to sustain the present rate for
several months.
AUTOS IN SUPPORT
OF course, the automobile in
duStry remains the main support
of steel, and it has reached a new
high weekly production level for
the year. Few observers, how.
ever, expect this to be maintained
after dealers stocks are built up.
Building and construction &C
tiVity is well sustained, and one
important development last week
was Mr.. Roosevelt'S action in add
ing another billion dollars to the
amount the FILA will lend on
residential building next year.
This should clinch expansion in
building activity for some time.
Probably. the recent improve
ment in the statistical reports of
the lumber manufacturers is evil
dence of building gains.
Even the cotton textile situa-
ton looks better. Last week, the
trading in cotton goods expanded
sharply. as buyers apparently con-
cluded that prices had hit bottom.
Sales of print cloth largely ex-
ceeded production, and prices
strengthened. Some fear of the
effects of the trade agreement
with England still remains, how
ever, and the textile industry is
still "spotty."
RETAILERS CAUTIOUS
Railway car-loadings declined
more than SeaSonally, including
the miscellaneous" cars. which
include manufactured products.
One of the best symptoms is the
rather widespread improvement
in wholesale sales. Apparently,
the retailers in most sections have
been so cautious that their in
ventorieS are low and they are
now rushing to the wholesaler
with fill-in recorders.
Commodity prices were rather
tnconclusive last week, the aver
ages" being mostly a trifle lower,
while a majority Of sensitive"
markets were stronger. I am i'm
pressed by the rise in tin, scrap
copper, rubber. hides, silk, print
cloth and wool tops. Hide prices
rose in active trading. Probably
the fiveweek period of price weak
ness is nearing its end.
The petroleum industry, how
ever. is disturbed by the renewed
tendency toward overproduction,
and talk of Government control.
A further cut in the price of
crude seems to be under conSid.
Grafton.
FALLACY is SEEN
One Of the best sympt ON S
recently is found in Washington
and concerns our domestic poll
tics. Perhaps as important a
point as any is the way the rice
and tobacco farmers turned dowr
the AAA scheme Of crop controI
This surely shows that the futilitN
of the New Deal hocus-pocus i
being realized.
Accordingly, one by one. thu
New Deal measures are on thu
way to being modified. including
even the drastic attitude towarC
private power companies. Thu
notable report Of the nonpartisaI
committee may lead to a correC
ton Of the security act with it
unreal reserve"