Evening star., 1939-10-06

Industrial Output
Advances Close 10
1887 Peaks
Reserve Board Points
To Ropid Rise Since
Beginning Of War
By the Associated Press,

BY the Associated Press.
The Federal Reserve Board re-
ported yesterday that American in
dustry, stimulated by the war and
domestic factors, had increased its
production salmost to the level at
tanned In the 1887 recovery squirt.
The September production rate
averaged ITO per cent Of the 1923-25
base period, the boards monthly bull
letin estimated. It added that out
put raced well ahead OF ITO in the
latter part Of September. This
brought the index close to the 118
per cent peak OF 1887, the highest
point reached. since the depression
started in 1929.
Last years high was 104, reached
in December. The year 1899 started
out with industry rated at 101. Dur
ing dull spring, the index slipped
to 90. June brought a rise to SO,
July to 101, and August to 1902. This
pre-War squirt was emphasized by the
board
Activity Climbs Faster.
However, the report added that
while employment and national in
come increased substantially, as is
usual. they expanded less rapidly
than industrial activity"
The report summarized business
conditions at time when various
governmental agencies were study
ing the possibility of larger export
trade to Latin America and other
neutral countries cut off from Eu-
ropean supplies.
While most are agreed that some
stimulation of trade with South
America is certain, Chairman Emory
S. Land of the Maritime Commits
sion suggested today that business
men should not raise their expec-
tations too high.
With reference primarily to the
shipping situation, he said that
"the idea that we are going to
find plenty of opportunity for all
of us in South America just doesn' t
hold water"
| Cites MisinfOrma ton.
! He added that there had been a
"lot of misinformation" about trade
with South America and that there
was a great deal of difference be-
tween cash on the barrel-head
and the barter trade in which some
South American countries have en-
gagged with Germany.
Much of the expectation Of greater
trade with South America has been
based on the theory that the United
States might supply markets held
by Germany prior to the war
Industrys potential power needs
in the light of ar-stimulated activ-
ity, were discussed during the day
by President Roosevelt and C. E
Groesbeck, chairman of the board
of the Electric Bond g. Share Co.
Groesbeck told reporters after his
White House visit that "the power
companies are in much better shape
to meet any emergency than at the
beginning of the last war"
Price Changes Sharp.
The Reserve Boards report noted
that the war. in addition to increas.
ing industrial activity, had result
ed in abrupt price changes and sharr
increases in activity in the commod.
ity and financial markets of this
country.
Prices of basic commodities ad.
vanced in September, rejecting
chiefly heavy purchases by manufac.
turers and distributors, but to some
extent also speculative activity BY
traders" the report said.
Statistical tables in the report
showed that the prices of 80 sensi.
tive commodities jumped 20 per cent
in the first week of the war.
The rate of this gain alarmed
many administrative officials, anc
the Commerce Department Busi.
ness Advisory Council of 50 promi.
nent business and financial leader.
discussed here yesterday voluntary
means of carrying out pledge tt
act as ''liaison" between the Gov.
ernment and business in checking
''unwarranted price increases"
The Reserve Board attributed thu
industrial gain largely to increased
production of steel, automobiles. tex.
tiles, shoes, petroleum and coal.
The board also reported demand
for business loans at commercial
banks has increased sharply in re.
cent weeks.
"A part of this demand represent:
a seasonal increase, but much of i
appears to be for funds to financ.
the purchase of additional inyen.