Evening star., 1940-06-30
U.S.. Industry Reaches
Highest Midyear
Marks in Decade
Anticipation of War
Boom Spurs Building
Of Inventories
By FRANK MacMILLEN,
Associated proSS Pusfpacs Urit.r


United States defense expenditures
still to come, the Nations industrial
barometers today were the highest
for midyear in a decade.
For the June end the Associated
Press index of industrial activity
stood at the best level since 1929
after recovering the last two months
the greater part of the loss in the
winter and early spring slump.
While short of the 10-year record
attained on the initial wartime up
surge last autumn, this guage of
factory operations has risen steadily
since the German blitzkrieg in the
west quickened arms spending and
defense plans on both sides of the
Atlantic.
In part, analysts said, the rise
has been traceable to anticipation
Of war industry boom, causing
buyers to lay in stocks before Gov
ernment orders occupy factory ca
pacity.
The Associated Press index has
risen to 1854 per cent of the 1929-3O
level, compared with the years low
of 93.6 late in April and with 8s.s
a year ago. The December peak
was 112.1.
Holidays to Halt Rise.
Fourth of July HOLIDAYS in steel
and other industries may halt the
expansion trend in the coming week.
analysts said, but in many machine
and metalworking shops vacation
schedules were adjusted to expec-
tations of an increasing flow of arms
orders from Washington and busy
summer for the heavy industries.
The belated spring upturn showed
signs of tapering the last week as
the Nazi conquest of France closed
to American trade the biggest re-
naming continental market in Eu-
rope.
Financial and commercial rela-
tions with the continent were prac-
tlcally at Standstill, except for a
trickle of business by way of Spain
and Portugal. The tie-up in trade
with the continent surpassed any,
thing comparable in the memory of
veteran business observers, exceed
ing World War disruption of Euro
pean trade.
Hardest hit by loss of European
markets were farm products, notably
cotton.
How American trade would fare in
the long run under the new orders"
proposed in Europe and Asia was
debated in financial circles. A hint
OF the repercusSions was seen in the
Washington idea for setting I'D a
huge corporation to buy the Latin
American commodity surplus so
Western Hemisphere producers
might present united front to
totalitarian traders.
Arms Orders Heavy.
Temporarily, anyway. Uncle Sans
European trade was heavily weighted
with sales of airplanes and other
war machinery to England. British
purchasing agents announced tnev
had taken over French contracts in
this country.
England'S rush efforts to fortifv
her defenses against the threatened
German blow appeared to account
IN part for the vigor of the summer
production drive in this country.
especially in aviation. machine tool
and other war supply industries.
Combined with the British buv-
ing were growing expenditures for
plant enlargements to meet the an
ticipated boom in war industry when
Washington's multibillion dollar de-
fense spending gets into high gear
The most striking indication Of
the trend, some analysts reported,
was wave of rail equipment orders
and increased capital outlay In the
public utility and aviation indus
tries.
The trade publication "Iron Age"
said the carriers may buy $4,000 to
$4,000 freight cars within the next
few months.
Revival in heavy industries under
the grim touch of arms manufacture
was reflected in rising traffic in ore,
coal and miscellaneous freight. Rail-
roads were on the way to having the
most profitable year since 1880,
judging by latest returns on operat-
ing income.
Markets Backward.
In contrast with war -timulated
industrial expansion was the halting
pace of Wall Street marets. A brief
demonstration of bullish faith,
which rallied prices all along the
line. followed the nomination OF
Wendell L. Willkie as Republican
standard bearer for the presidential
campaign.
But the nomination of the busi-
ness leader, which financial circles
described as constructive" seemed
to be overshadowed in the market
place by the European puzzle.
Spectators waited for the
threatened German move on Eng
land or for rumored peace feelers"
to take definite shape.
The publication business week"
suggested a truce between England
and Germany could set back in
dustrial activity suddenly and, per-
haps, sharply"
For even though this Government
;ook over Britain's orders" the mag
azine said, sit would take time to
revise specifications, unquestion-
ably there would be an immediate
falling off of exports to which the
heavy industries are geared.
This presumably is one of the
main considerations in the nervous
ness in both stock and commodity
markets"
Meanwhile, pay roll dollars of
workers in expanding war industries
seemed to be making the rounds Of
the retail counters, helping balance
the effects of chill weather and rain
on sales of summer merchandise.
Store Sales Increase.
Federal Reserve figures disclosed
department store sales for the week
ended June % were 10 per cent ahead
OF sales in the corresponding 1899
week. For a four-week period ended
June %, the increase amounted to 9
per cent, the Reserve Board reported.