Evening star., 1940-01-21
Slows,
Trade Remains
Near Peak
Steel Rate SIuckens:
Auto Plants Hum
With Activity
BY SMITH REAvIS,

ltIlc IIllS Week lTOIl the record levels
reached in November and Decem-
ber, and further decline in new
orders pointed to additional diminu-
ton in the whir of mills and fac
tories.
Retail trade, aided by Jack Frost
and augmented purchasing power
induced by the heavier pay rolls of
the last few months and the farm
er's increased income, continued to
hold near its peak figure.
Industry's slowing down was not
heavy, and some departments con-
tinued to produce at close to ca
pacity. Although the diminished
rate was against the usual seasonal
trend. there were those who recalled
the last four months of 1899 had
seen one of the fastest recoveries
in the country's history and held
that return to normal and non-
war-stimulated improvement would
do little harm.
The Bureau of Agricultural Eco
nomics reported that an industrial
downturn was expected in the first
half of 1910, but that it was not likely
to be prolonged or severe.
Rail Chiefs Optimistic.
In Milwaukee, on the other hand,
executives of some of the Nations
largest railroads saw a small but
well-defned upswing in the offing.
accompanied by disappearance of
the effects of the depression years
and the dawn of brighter era.
The concensus of a good many
delegates to the convention of the
National Retail Drygoods Associa-
ton. held here, was that this IL
months would be not boom, but a
pretty good" year.
Although output slipped a little
and new orders in many cases were
only half of shipments, some
analysts saw decline in inven-
tories hastily built up after the
start OF war and a possible re-
newed demand within the next
month or So
A sign of this was noted in Iron
Age" which reported railway equip
ment orders picking up slightly
after the heavy buying of last fall.
Other hopes for the heavy industries
were held out in announced plans
for industrial plant expansion in
various parts of the country.
Activity Index Eases.
| AS reflected by the Associated
Press index, output fell of to 1893
Of the 1929 80 average from 1118 the
preceding week and compared with
Oil a year ago. One explanation
given was that as deliveries had
been hurried since the war began.
consumers were finding themselves
sufficiently stocked for awhile ahead
and were not hurrying new specifi-
cations as they did in September,
October and November.
Trade observers estimated steel
shipments were running about twice
ahead of new orders, The industry
curtailed production a little, drop
ping the operating rate to 84.8 per
cent of capacity compared with the
autumn peak around a.
Some quarters suggested the steel
rate soon might fall below 80 per
cent unless a new wave of buying
starts.
Similar hints of a readjustment of
business activity after the swift ad-
vance in the first few months of the
war were found in metal markets.
Custom smelters lowered the price
of copper. In an effort to interest
buyers. Steel scrap declined in
certain producing areas.
Subject to Sharp Swings.
Metals, particularly, are subject
to violent swings in demand for
durable materials. Buying at the
outset of the war, motivated in
large part by fear of wartime ad-
vances in prices, attained record
proportions. Obviously, analysts
argued, some let-down was to be
expected as industry completed
orders placed in the enormous
September-O October rush to accumu-
late stocks.
Caution in placing orders for fu-
ture delivery was noted at spring
merchandise shows, although busi-
ness generally at these gatherings
OF shrewd buyers was reported better
than year ago.
Encouraging to business, however,
were indications the legendary man
IN the street and the housewife were
spending briskly out of the enlarged
national income. The Federal Re-
serve Board announced department
stores in the Nation for the week
ended January 13 were 4 per cent
ahead Of the comparable 1899 period.
A sustained rate of consumption,
1t was pointed out, would shorten
any period of production curtail-
ment resulting from overstock
shelves.
Auto Record Expected.
Detroit's busy motor plants were
geared for a new January OUTPUT
record. Assemblies declined a little
from the previous weeks high figure
but remained 20 per cent larger than
in the like 1899 week. Railroads
benefited from the activity in auto
motive industries as we'll as unusual
demand for fuel caused by extremely
low temperatures in many places.
Running counter to the main
trend, the aircraft industry was pic
tured in rush to expand output.
Unified orders were estimated at
$675 900, 900 against $16O,OO0, 900 at
the start Of 1899 and more orders
were reported in negotiation.
Security markets reached firmer
ground after the decline in stocks
and bonds in the first half of Janu.
ary.