Evening star., 1939-04-17
Business Week Index
Declines Sharply as
Loadings Slump
Coal Stoppoee Brings
Substantial Freight
Decrease in Week
Special Dispatch to The Star

NEW YORK, April 17.-After four
weeks OF inactivity at the 80 level,
the Business Week index of in
dustrial activity broke through on
the downside all the way to "a.
1t thus penetrates in single week
the resistance level of 95 predicted
several months ago. Nearly three
quarters of this flve-point decline
III the index, however, is attributable
to railroad carloadings, and the drop
here is almost wholly due to the
stoppage of bituminous coal produc-
ton in the Appalachian field. This
stoppage began on April l, when the
union contract ran out without an
agreement between the miners and
the operators. 1t necessarily has a
sharply depressing influence on car
loadlngs, of which coal is BY far the
biggest single component, and thus
on the whole business index. If it
ends within reasonable time. and
without the extension to other coal
lelos which the head of the union
is said to have threatened most of
the loss will be recovered in the
following weeks. If not. it can be-
come more serious. For the time
oelng 1t Is merely one additional
depressing factor.
Other Factors Lag.
Barring an extension or long
duration of the coal stoppage, it is
perhaps more serious portent that
all OF the series which make up the
index lost ground last week. During
the preceding month the steady de-
cline in automobiles, which merely
reflected stability of actual output
durlng period when new spring
peaks should have been established
every week, had been almost the
only factor which prevented the
index as a whole from rising. Dur
ing the past week, however, a gen.
eral decline appears to have set in.
Where this decline will meet re-
Slstance cannot now be guessed with
out an even greater margin of error
than is usual, due to the influence
OF the coal tleup If the tleup con-
tlnueS the next two or three weeks
! could see the index close to 80. If II
is concluded shortly the rise in CAL
loadings will offset some of the COLI
tlnued decline elsewhere, and the
! index might find its bottom nearer
/ to SO. In either event, the genera
direction for the moment is down
ward.
1t remains true, however, that !.
/ the European atmosphere were 10
clear rapid pickup could. and prob
ably would. occur in the United
States. What is needed is solution
(which will insure peace for the
spring and summer in the way thai
the Munich agreement did for las
fall and winter. Such a solution
grows more and more difficult tn
discover, but, assuming Iunproved
though 1t Isl that peither side de-
slres war today, it will probably be
found.
Meanwhile, signs are appearing
that shary rally in business could
take place if the European situation
permitted. Two signs deserve spe-
cial mention here. Retail sales of
automobiles turned up sharply in the
last third of March and continued
their good showing IN the first days
OF April. Secondly, construction
contracts awarded were very higu
in the last half OF March bringing
the monthly total to wholly
satisfactory figure. Residential build
ing led the way and. at Sl25. 1000 900,
was the best for any month since
1929. Construction promises a base
for business activity. on which it
can rest Or from which it can rise
when the European crisis clears.