Evening star., 1939-07-30
Spurt in Steel Rate
Brightens Business
Outlook in Week
Rise Contrasts With
Usuol Recession in
Summer Period
BY THOMAS E. FLANAGAN,
Associated Press Financial Writer


Associated Press Financial Writer.
An unusual summer squirt in steel
production frightened the business
horizon this week.
The American Iron and Steel In.
stitute estimated that industry's op-
erations jumped to 60.6 per cent Of
capacity, new peak for the year
and the highest since the week Of
November, 1888, when the rate
was 607.
Normally the steel industry runs
along at sluggish pace at mid
summer. The weeks sharp runup
was fueled mostly, experts said, by
heavier demand from miscellaneous
sources and some forward buying
from the motor industry.
The boost in steel output con-
trasted with lower figures posted for
carloadings, electric power and mo-
tor production.
Meanwhile, trade reports from
steel centers said steel would prob
ably get further boost from the
motor industry. Iron Age said the
motor division was expected to lift
the rate well above that for this
week. Previews of some leading mo-
tor manufacturers, 1t was stated,
confirmed expectations of an early
start for the new production season.
Hopes for brisk output of motors
were not without foundation. The
Commerce Department in its report
of business conditions in 36 cities,
cited figures which showed sales Of
new cars were holding higher than
a year ago. Wayne County, Mich,
reported sales of new passenger
cars totaled lat, compared with
1,514 the week before and 428 in
the like week last year.
Auto Trend Repeated.
Although automobile production
dipped this week, Wards Automotive
Reports said the trend was follow
ing an almost exact parallel with
last years. A year ago the industry
hit bottom in the second week Of
August.
Scrap steel prices chalked up an
other gain, the third successive
weekly rise. Farm equipment makers
did their part in keeping the steel
industry's backbone stiff. Rejecting
the sharp advance in building opera
tions over a year ago, structural
steel orders were reported at two
year top. The rising tide of orders
for steel from the motor field, build
| ing and miscellaneous sources only
served to make more conspicuous
the absence of the railroad industry
as big steel buyer.
| Normally about one-third of the
railroad industry's entire purchases
fall to iron and steel. But buying
power has fallen to an abnormally
low level because of shrinkage in
earning power and-for some sys.
tems-a wobbly credit situation.
Railroad experts summing up the
current situation said this week that
the industry as whole had its
head barely above water.
Although figures issued this week
showed carloadings running 13 per
cent ahead of the like week of 1898,
the total was far under the 900 900
car-a-week level which was reached
In the boom years of the late
20s. Analysts said the outlook
was fair for an upswing in carload.
ings as soon as the Nations crops
started moving at the end of sum-
mer. If. as a result, the industry
should get hold of some additional
ready cash then some heavier buying
of steel might follow.
Recent Gains Kept
The Commerce Department said:
Nationwide business activity
during the past week held it's re-
Gently recorded gains. Retail trade,
while showing evidence of the usual
seasonal lull, was moderately ahead
of last years figures in practically
all reporting cities. Purchasing in
wholesale markets was also we'll
ahead of that recorded for a year
ago, while a more confident atti-
tude in evidence toward fall busi-
ness"
During the week the following re-
ports went into the business record:
Consumption of copper swelled
sharply. Bank clearings jumped we'll
above last years total. Issues of new
securities dropped abruptly. Tho
Nations two largest steel companies
United States Steel and Bethle-
hem-reported sharp gains in sec
ond-quarter earnings. Exports Of
aircraft and related products jumped
to new record high in June, with
France and the United Kingdom
heaviest buyers.
Record Is Reviewed.
The statistical record for the week
included:
The Associated Press index of in
dustrial activity rose to a new high
for the year-92.6, compared with
90.4 the week before and 70.8 in
the like 1888 week.
The Edison Electric Institute re-
ported power production totaled
1924 ,588 900 kilowatt hours in the
week ended July %, a drop of 1.3
per cent from the previous week, but
10.8 per cent over last year.
The Association of American
Railroads reported car loadings at
656,34 in the week ended July %,
small drop from the preceding
week.
Wards automotive reports said
output totaled 40,595 units, COM
pared with Al ,420 the previous week
and 81 800 in the like 1888 week.
The American Iron and Steel In
stitute reported production of steel
at 6O.6 per cent of capacity, COM
pared with 56.4 the week before, $40