Evening star., 1939-09-10
War Activity Spurs
Business 10 Best
Pace in 7 Years
Tendency for Prices
To Get Out Of Hand
Diminishes
BY SMITH REAVIs,
Associated Press Businssk WYitav.

States business fooled along at its
best speed in two years during the
first full week of the European war,
stimulated by the crisis abroad and
simultaneously fulfilling earlier
peactime expectations of better trade
after Labor Day.
The men who direct It's affairs
expect the pace to quicken as soon
as war orders can be specified-a
wealth OF inquiries from abroad has
already poured in by cable. The
steel industry has blown in more
blast furnaces to take care of the
activity it looks for and others are
preparing to take over new markets
in the past served by the warning
nations, and to feed and clothe
France and Britain as we'll
The impact of Britain and
Frances declaration of hostilities
against Germany caused sharp rises
in commodity prices, which were at
about the low of a tWo-year decline.
Toward the end of the week, how
ever, the tendency to get out of
hand leveled off, possibly because
there was evidence the Government
might take measures to prevent Q
runaway and that primary produce
ers were in the same state of mind.
Foodstuffs Advance.
AS commodities were boosted so
were foodstuff prices, especially
those OF sugar. flour, butter, eggs,
meat, lard, beans and canned fruits.
The Government again threatened,
as did municipal authorities and
wholesalers. 1t was pointed out
Government agencies hold huge sur
pluses of wheat, cotton, butter and
eggs and the release of these would
automatically send prices down.
Capacity of food processing plants
has not been utilized fully recently
and the addition of extra shifts,
analysts say, would soon abolish any
shortage
War conditions likewise sent high
grade and United States Treasury
bonds down, but the fall was
stemmed near the week end. Some
speculative loans bounced higher
and stocks added billions to their
market value in the heaviest trading
in two years.
An immediate result of the iump
in commodities was an increase in
farm income and purchasing power,
some OF which was almost immedi.
ately transferred to retail trade
channels. Dun g. Bradstreet noted
smaller retailers in rural regions
reported IAN immediate expansion in
purchases and dealers in higher
priced articles such as electrical
goods farm equipment and automo.
blles had more inquiries than in
months"
Index Gives Picture.
A brief picture of the week may
be seen in the Associated Press index
OF industrial activity, which at s59
per cent of the 1929-3O average was
up for the eighth straight period
and touched new high since Octo-
Der, 1887. 1t compared with s5.s
the preceding week and TO
year ago.
Its various components were af-
fected by the Labor Day holiday.
Actual production of steel ingots fell
off, but, seasonally adjusted, was at
the high Of the year. Strikes in
parts plants cut down automobils
output, which was nevertheless rea-
sonably higher than the preceding
period. Cotton mill activity, despite
the greatest weeks buying of gray
and print cloths in the memory of
many textile men, dropped when
normally it was expected to increase.
Residential building was at its best
for the year, as were railroad freight
carloadings, indicator of the Nations
trade. Coal output gained.
Consumers of retail goods appar-
emily found in the war no reason for
higher prices. At any rate retail
trade in general was reported at
6 to II per cent better than for
the comparative period of last year,
with the broadest gains in the South
and Middle West.
Fur Buying Heavy.
Dun & Bradstreet reported heavy
buying OF furs and fur coats was
considered significant, since these
articles, because of their high unit
costs, are generally barometer Of
consumer sentiment" Purchasing
was more evenly divided among the
various lines than for many months
past.
In many of the wholesale markets
the week was the most active in
years. Inventory positions were light
and calls heavy. Observers reported
buying was less of the hand-to-
mouth variety that has prevailed
the last two years and that orders
were being given for as much as five
months ahead.
This forward buying, II extended
to all branches of industry might
make for a continuation of normal
recovery on broader basis than at
present. some analysts assert, They
contend that If the price situation
is kept in hand producers will not
be afraid to buy and to expand their
output.
Textile Trade Rushed.
In Worth street, the Wall Street
OF the cotton textile trade, sales Of
various cotton goods reached the
huge total of around 500 900 900
yards In rollicking chase of process
sors to catch up with orders. Mills
had large inventories on hand, how
ever, but prices were advanced, as
producers said that for months they
had been selling at less than cost.
As rule, however, manufacturers
were chary about boosting prices, on
the theory that it is easy to kill the
goose that lays the golden eggs. Au-
tomobile makers. in a number OF in
stances, announced reductions In
the 1910 models. In a number of
merchandise lines prices were with
drawn for the time being until the
somewhat chaotic situation of supply
could be Strengthened out.
As far as war business is con.