Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-11-02
Dry Goods Leader
In Recovery After
Inventory Cuts
Conservative Factory Rate
And Cautious Buying
Reverse Situation
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, Nov. 2.-One of the
first to slow down under the weight
OF top-heavy inventories a year
ago, the dry goods trade, was also
among the first to rally and to
blaze the trail toward recovery in
1888, according to a survey by Dun
& Bradstreet, Inc.
In most divisions of the trade,
a slackening in activity had been
evident as early as June or July,
1887. Just one year later, conserva-
tive manufacturing schedules and
cautious purchasing policies had
achieved an almost complete re-
versal in the position of the indus
try. Stocks of goods in distributing
channels had, in many instances,
been reduced to point where they
would require immediate replenish-
ment at the first revival in con-
sumner buying.
"On a seasonally corrected basis,
the index Of department store sales
began to head upward in June; I'M
adjusted, it continued downward
through July. Wholesale trading in
dry goods expanded slightly in July,
but doomed in August, recording the
highest dollar sales since November
a year ago. AS buyers showed
greater interest in forward orders,
many mills, in turn, became reluc-
tant to sell ahead at prevailing
prices, in the expectation that scare
tiles in some lines and heavy sales
would force values up.
Inventories Cut Sharply.
Both producers and wholesalers
showed sharp reduction in inven-
tories between January and the end
of June. For wholesalers, the de-
creaseS amounted to 10 per cent,
for manufacturers from 10 to II
per cent. In the early fall, Govern
ment purchases Of sweaters and
other knit goods for distribution
through the w. P. A. gave an added
! impetus to stock clearances. BY
October, acute shortages had devel-
oped in a number of dry goods lines.
"All producing divisions of the dry
goods trade shared in the upturn
during the third quarter of 1888.
| The situation stood out in sharp
contrast to that year earlier when
new business was falling off sharply
and prices were weakening under the
weight of excessive stocks. A year of
extreme caution in production and
buying policies had brought about
sellers market in many lines, and by
the summer of 1888 pressure was for
expansion rather than contraction
OF factory operations.
Cotton spindle activity advanced
from low of SO per cent of capacity
in May to rs in August, which COM
pared with IS in August, 1887. The
rate dropped back to 70 in September,
but in early October sales of gray
goods were approximately double
production, insuring further in
creases in activity. Schedules at
wooden mills turned upward in May
and by August had reached 70 per
cent of capacity; although below the
rate for the corresponding period of
1887, the August figure topped all in
tervening months since August of
the preceding year.
Production of rayon yarn during
the second quarter of 1888 amounted
to 53,300000 pounds, according to
Rayon Organon; this was the small
est for any full quarter since 1884.
A squirt in demand beginning near
the end of June caused a sudden
change in the position of the indus
try; producers deliveries of year in
July were almost double those made
in June, setting a new all-time high
which was more than equaled in
the new two months. Consumption
of raw silk was higher in each sue
cessive month following the low in
May. August and September deliv-
cries of approximately $4,000 bales
each month were the largest since
April, 1887"