The Wilmington morning star., 1940-01-02
new YEAR BRIGHT
TO U. S. BUSINESS
Has Much More Confidence
Than Appeared Probable A
Few Months Ago
BY CLAUDE A. JAGGED
Associated Press General
Financial Editor

A440AACluA GQlUOE
NEW YORK, Jan. 1.-LR-Amer-
lean business starts the new year
much more confidently than seemed
probable a few months ago.
First reactions of many business
leaders and economists to the au-
tumn splurge of buying and manu-
featuring ranged from uneasiness to
frank skepticism.
But it is a widely held view
among experts today that accom-
panying Embellishments which often
make such sudden upturns short
lived, have been avoided.
Available information, they agree,
does not indicate any serious &C.
emulation of unsold merchandise.
Furthermore, several industries
have enough business on their books
to assure brisk operations during
the early months of 1910.
After the exceptional final quar-
ter Of 1899, some slackening of the
first quarter Of 1910 would not be
surprising, yet analysts who LOCK
for a recession sufficient to under
mine the recovery trend are hard
to find.
Test Anticipated
Few these days are willing to look
very far ahead, but some think a
test may come in the second quar-
ter, when the current impetus may
have worn off.
A good many, however, face that
period without m~isgivings. Unless
buying is checked by some shock to
confidence that cannot now be fore
S e n, continuance of expansive
forces. they think can be antici-
pated.
First is the eject of war. While
supplies of most commodities are
ample, and runaway price rises
have been avoided, it is noted the
effect of wal would seem likely to
have at least a sustaining or a
firming influence on prices. If that
Is true, it may be expected that
buyers will continue to replenish
stocks, and in some lines, to build
them up to more comfortable pro-
portions.
Heavy Industry Climbs
A second important factor is the
pickup in heavy industry. Electric
power in use has been consistently
breaking all past records, and the
power companies are planning a
substantial amount of construction.
Railroads also are in the market
again for equipment.
Another is the continued plethora
Of idle funds. After its early weeks,
the war in Europe failed to disturb
the money market, and high grade
bonds are back close to record
prices. Whether any considerable
flow of private capital into industry
for new development can be ex.
pected in face of the uncertainties
of war and a national political cam
paign, is a moot point, but funds
are plentifully available.
After the sudden wave of buying
in the early weeks of the war, when
orders were placed right and left on
the theory that the only certain eff
feet would be higher prices and it
was a good idea to buy, things
levelled off somewhat.
Orders Continue
Then business men began to ask
whether goods might not be pilins
up as they did in 1897, or in the
early summer Of 1888. The precipi.
tant slump in autumn of 1887 was
well remembered. But orders con.
tinued to flow in, not at the rate of
the first furry, nevertheless at a
good pace. After some setback,
commodity prices stiffened again in
December.
So fears that business might be
Just building up for another quick
slump, largely vanished.
Figures May Decline
Statistical experts are pointing
out, however, that with maintenance
of close to the current volume of
business in the new quarter, most
of the index figures of production
may decline.
This is because they are adjusted
for the normal seasonal trend. that
is, if from one month to another,
business shows only the usual sea-
sonal increase CT decrease, the in.
dex is unchanged.
Now the first quarter is nor
mally a period of quickening. The
FeFdera1 Reserve board monthly in
dex Of industrial production, for in
stance, allows for an increase of
close to 10 per cent between De-
cember and March. Unless there is
such an increase, therefore, the in.
dex will be several points lower in
March.
Such a normal seasonal expansion
in the first quarter, which some
feel can scarcely be expected after
the spectacular quickening Of the
past quarter, would only leave the
index unchanged.
KANSAS CITY LIVESTOCK
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