Evening star., 1939-05-13
Business Sentiment
Shows Improvement
During Week
Recovery Hopes Spurred
By Wearing OFF Of
War Fears
Special Dispatch to The Star,

NEW YORK. May 13-The gen.
eral state Of feeling about business
seemed to have improved this week
said Business Week today. It was
admitted that the latest figures
showed a sharp decline in the rate
OF production, and it was feared
that current activity would prove
to be as low if not lower. But
there was less pessimism about the
European situation, and a wearing
of IN the power of the foreign crisis
to irritate American business seemed
to be getting under way.
Some hope, therefore, began to
develop that American energies
might soon be turned again to WORK
ing Tor domestic recovery. In this
state of opinion, it was natural that
securities and commodities should
quietly improve on their gains Of
the preceding week. Fortunately.
the losses from the bituminous coal
strike to date have been relatively
small.
Index Dips Sharply.
The Business Week index of pom
eral activity last week took a shsrp
2i2-polnt drop, which left it we'll
below the previous low figure of the
winter and spring recession. At its
current level of approximately 90
1t has lost over 40 per cent of the
gains of last summer and autumn
The weeks losses were divided
throughout almost the whole index.
out were most severe IN automobiles
When the retail sales of new pas
Senger cars for the last 10 DAYS OF
April became known, it appeared
mat earlier optimistic estimates had
Deen grossly mistaken, and that the
montn as a whole had therefore
turned out TO be serious disaD-
polntment. Field stocks of General
MOTORS cars did decline bv a fey
thousand units during the month
but this was entirely due to the
reouctlon Of output. For the first
time since this corporation began
keeping records more than 10 wears
ago. sales TO consumers we're ar-
tuaIy lower in April than in tho
preceding month. The same contra
seasonal decline will probably prov,
10 nave occurred in the rest of the
industry as we'll when the figures
are known
With automobile curtailment thus
effective while awaiting another
hoped-for pickup in retail sales, and
with cotton textile mills curtaillng
'for the astounding reason. it is
said. Of lack of raw cotton, business
needed all the help it could get from
settlement Of the coal strike and
from the coming summer peak in
building.
LOadingS to jump.
With the END of the coal strike.
there is sure to be a very sharp
Spurt in carloadings. but it is not
likely to have large effect on other
parts OF the general index. Its set
tlement might. however. mark the
bottom OF the 1899 recession in
American business. Whether it does
or not should depend in large part
on whether building activity can
spread its influence throughout
industry successfully. and on the
absence Of further serious shocks in
Europe or on changing state of
mind IN American business toward
European troubles
The building contract figures for
April are on the whole satisfactory,
though not brilliant. Residential
contracts awarded in the 81 Eastern
States were fractionally below those
awarded in March. but the removal
OF single large contract from the
March total would overcome the
discrepancy. The main point is that
residential building is now moving
along at the rate Of early 1887. when
1t was Just taking hold and before
1t was cut off by the rising costs of
that summer. while the backlog
OF mortgages approved by the Fed
eral Housing Administration indi-
Gates that the present spurt will not
soon be cut off.
II. therefore, political shocks are
not too great. and the present de-
cline is halted through peace in the
coal fields and inventory replenish-
ment by industry, gains in business
activity may be expected in the sum-
mer months.