Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-10-27
Industry Booms
AT 1929 Levels;
Prices Curbed
Creation of 'Priorities'
Boord Emphasizes
Initiation Threat
BY FRANK MacMILLEN,
Associated Press Financial Writer.

dustry booming at levels of fabu-
lous 1929, businessmen this week
looked forward to record S85 5000
100000 national income in 194l and
laid lines to hold war-pushed prices
to reasonable levels.
Creation of "priorities board
at Washington to assure a steady
flow of critical materials to the
war plants-if necessary by deny
ing or delaying them to civilian in
duStry-threw into sharp focus the
problem of possible runaway prices
later on in the defense drive.
Economists have long agreed the
basic factors of an upward spiral
of prices-some call it initiation
is an increase in the supply of
spending money in the hands of
the public, combined with a de-
crease in the supply of things for
which the public can spend.
Thus they watched closely, took
precautionary steps, TO see that as
profits and pay rolls which comprise
the national income climb toward
a probable new high in the history
of the country in coming months,
prices shall not rise out Of pro-
portion.
Gird1er Issues Warning
Prominent was the warning of
Tom M. Girdler, Cleveland steel
maker. against speculative buying
in that defense metal
Said Girdler: Some steel users
have been listening to excited
stories of an imminent steel short
age, and they are buying beyond
their current needs. That kind of
buying could in itself create a
shortage, but it would be an artificial
shortage. There is no need for any
thing but orderly buying by steel
consumers"
Perhaps more important still, be-
cause when the new business week
starts Monday it will be on the
desks of the actual buying officers
of the country's leading business
concerns, was the cautionary word
of the National Association of Pur-
chasing Agents to its members.
1t reported: There is now under
way a widespread effort to get com
mercial' manufacturing operations
protected with supplies before Gov
eminent orders enter the many lines
of trade. with their priorities or
preferences receiving first attention ="
But it added. If the fear that the
more important materials for manu-
/ facture will be actually short can
be alleviated for a month or SO
more, there will be no occasion for
skyrocketing prices and artificial
shortages even to supply the high
rate of production that is expected
at least through the year to come. "
Price Rise Expected.
There is considerable opinion, -
it continued, that marked-up
values will meet with resistance
from administrative sources if
there is appearance of uncalled-for
selling prices in relation to produc-
ton and distribution costs. Never
theleSS, the trend of commodity
prices is likely to be upward, with
considerable restraint being wit
messed, and with drastically chang
ing price structures being the eX
ception over the months TO come. %
The business records of the week
lent point to calculations of many
observers that sometime next year
with defense production at flood
and with the country's spendable
income ahead even of the boom
years of the "twenties,' would be
the critical point in the fight to
hold prices down.
Steel mills operated at about the
highest percentage of capacity in
history, around 95, with actual
amount Of steel turned out undoubt-
edly the greatest on record.
Automobile production was the.
largest for this part of the season
in three years. Orders from dealers
were said to be heavy.
In retail trade, snappy weather.
drove people to stores for winter
clothing. Sales in steel and heayA
industry towns led the pickup.
NCN TIdHtS DUH.
Heavy construction awards
largely for factories which vii
later add to swelling employment
and pay rolls-topped $4,000. 900.
nearly 100 per cent ahead of the
same period last year.
Closely tied to the price question.
and intertwined with the rush 10
expand plant facilities, reflected in
these figures, was the near-capacity
levels at which numerous key in
dustrieS were operating.
Not only in steel, but in textiles,
motors, electric utilities, and else
where expansion appeared to be in
the offing. The aircraft companies,
with an estimated $500 100000 of
orders on their books, and more
likely to be added as these are filled,
already is rushing millions in plant
construction completion.
But economists agreed that an
important factor in holding down
the prices OF goods to the non-mili-
tary consumer would be sufficient
plant capacity in such lines not
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