Evening star., 1940-01-13
Business Uncertain
Over Outlook as
Back|ogs Drop
Power and Automobile
Coins Offset Dips
In Other Fields
Special Dispatch to The Star.


NEW YORK, Jan. 13.-Since the
first Of the year business has been
poking along like an ocean liner
In one of those pea-soup fogs, says
Business Week today. The stock
market gives a fair idea of the
businessman's state of mind. 1t
backs and fills on a not excessive
volume, having, one day, ideas of
going places, the next day, no idea
of going any place at all. The Busi-
ness Week Index continues to
thread its way along the upper
reaches of its December range
with faint suggestions--as backlogs
thin out-ihat it will shortly begin
to move lower
The stalemate in the index in
recent weeks may be described as
resultant of a battle of the COM
ponents. The 8-point drop in steel
ingot operations has been counter
balanced by sharp gains in automo-
bile output. Electric power pushed
into new high ground and offset
modest dips in residential build
ing and heavy construction. And
the two carloading series have just
about Cancelled one another.
Neither High Nor Low.
The high rate of current business
operations can be readily explained
by the substantial backlogs of
orders built up in September and
october and the brief buying furry
in textiles in December. The aim
lessness can be explained by the
state OF incoming orders. Reports
from Business Weeks field repre-
sentatives indicate that orders are
neither optimistically high nor
pessimistically low, so most manu-
facturers are continuing to produce
at recent rates, even though ship
ments are exceeding new business.
There still are two reasons for the
current industrial indecision-war
and politics. 1t is traditional that
presidential years are disturbing to
business. Unquestionably, there are
moments in which political appro-
baton or disapprobation influences
mems decisions. But, by and
large, the major decisions are in
response to phenomena of the busi-
ness world itself; inventories, new
orders, price trends and immediate
(rather than longer term) profits
prospects.
The war in Europe, of course, is
the great unfigurable. There is
growing conviction that things will
begin to happen soon with Hore-
Bellsha out as war minister in
Britain and with economic prob
lens becoming $50 it is said) more
acute in Germany. The idea is
that in the spring. if not before,
aggression will displace current
defensive operations and that ag-
gression and its concomitant should
stimulate European demand for
American goods.
War Effects Feared.
Looking at this grim possibility
from the strictly business view
point, that ought to mean expand
ing orders for the heavy industries.
Yet, there is a mode of thought
current which discountenances these
new orders as levitating influence
on business. Those who follow it
reason that the revulsion from in
tense war will be so great and fear
of this Nations entry will be so in
tensified that the stock market
and business will go down.
Business Week is not inclined to
accept the latter view, though it
recognizes it. Such a sentimental
surge could develop only under
given set OF depressing conditions,
such as these: ID If business back
logs were low; (2) if new order
prospects were dismal; 80 if buying
from Europe was small. Then the
stage would have been set for
decline anyway and the wars in
tensff1cation would be as good an
excuse as another one. Meanwhile
before becoming overbearish it is
we'll to note that the war has not
intensified yet.