Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-07-03
Business Continues
To Climb Despite
Uncertainties
Rate Of improvement
Expected to SIoeken
In Coming Weeks
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, July 3.-Neither for
eign nor domestic political uncer-
tainties were sufficiently distracting
last week to check business in its
upward course, says Business Week
today. The Business Week index
advanced for the sixth consecutive
week to OO.9-the highest level since
February II. But from now on the
rate of improvement will naturally
slacken. The advance, after the
snapback from the spring recession,
has to be digested. Thus, though
the immediate trend is still up, it
Is only realistic to note that the
cream, for the time being, is off the
rise.
But business has sufficient internal
stamina, based on existing neces-
sitouS demand for goods, to resist
shock-unless the shock be outright
war in Europe or surprising po-
litical upset here. A mass of sat-
tistical indications bears this out.
Steel production, in the face of
normal seasonal downtrend, has
more than held its OWNS up, in
fact, to the best level con a sea-
sonally adjusted basis since Octo-
Der, 1887. Automobile production,
in complete disdain of statistical re-
quirements for peak in April, has
stepped up sharply since settlement
OF the Briggs strike late in May.
Retail Sales Steady.
Retail sales have been steady.
while in the textile industry there
Is faint suggestion that a BUYERS
market may be turning into a
market in which the manufacturer
may have little more to say about
his prices.
The Governments raw cotton
squeeze bears somewhat on this
newly sensitized supply-and- demand
relationship in textiles, but probably
even more important is the recent
agreement among print cloth manu-
facturers to curtail output Is per
cent. The action impaired a better
tone to the textile market generally.
Gray goods prices, for instance,
flrmed up in sympathetic response.
What's been happening in textiles
is pretty much symptomatic of what
has been happening generally
Though there has been no tendency
for prices to soar, there has been a
creeping advance for the last wear
in commodity prices.
Hand-to-mouth buying apparent
~, has been sufficient to sustain
prices in a narrow range for months.
and as consequence, confidence in
the price level has developed. And
though the report of the National
Association of Purchasing Agents
indicates that purchases are still
being confined to current needs"
the fact of the matter is that cur
rent needs" are expanding along
with general business volume. Thus,
the longer term tendency in prices
should be steady, despite interme-
dlate downward jiggles III the sensi-
tive commodity index.
Spending to Spur Pace.
Inevitably interviewer with the
price trend is the Governments
spend-and-lend program. Certainly.
II the President succeeds in getting
authority to embark on a SO 900 ,00O.-
600 to $4,000, 900 900 self liuuidat-
ing works program, the immediate
impact on the price level and pro-
duction is bullish.
1t is true that great antipathv has
developed to further spending. that
the administration program tends to
excite nervousness among business
men over the future of the Nations
credit.
Quantltatlvely, however, there is
no arguing the fact that a dollar of
Government money which goes into
the business stream contributes to-
ward the purchase of goods and
services and so helps to support the
price and the production level
The compensatory spending"
theory of the administration econ
omlsts has its holes. There is the
argument that the spending policy
creates such grave concern over
fiscal affairs that private initiative
congeals. Hence, compensatory
spending retards rather than aids
business,
On the other hand, there is the
argument that oivo, n ,,,+a;. =,
OF prices and production, the intro
ouctlon OF an additional cash i'm
pulse INTO the business stream,
whether public or private, tends to
raise or support that level. In any
case, the die has been cast. The
administration intends to spend fur
ther. And the impact of those ex-
penditures, regardless of ones per-
sonal economies, seems bound to be
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