Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-07-14
Construction Jumps
To Highest Levels
In Ten Years
Home Building Leads;
Defense Expansion
SweIIs Volume
BY FRANK MAcMILLEN.
Associated Press Business Writer.

BY FRANK MacMILLEN,
Associated Press Business Writer.
NEW YORK, July, 13.-The giant
construction industry-s major user
OF manpower and materiaIs-was
pictured In business reports today
forging ahead in the greatest squirt
OF activity in q decade under q
combination of defense, factory and
home building.
With residential work leading the
climb back toward 1929 levels, con-
struction engineers saw an increas-
Ing number Of large scale Govern
ment defense and private industrial
projects taking shape for the final
half Of the year and for 1941.
Latest building figures indicated
expansion in private work had be-
come strong prop for the Nations
industry, now the busiest for this
time of the year since 1929. Pri-
vate contracts in June, the F. w.
Dodge Corp. reported. rose to $177,-
100000 from $160, 900 900 In the
same month last year, offsetting in
large part the decline In w. P. A.
and other Government construc-
ton, aside from defense.
Double Year Ago.
Early July figures compiled by the
Engineering News-Record, q trade
publication, showed private en-
cheering construction awards run.
ming about twice as big as the COM
parable totals year ago.
The character of the projects
some requiring many months to
complete-indicated numerous COM
munities would feel the effects of
the millions to be spent in pay rolls
and for materials.
In addition to $500 900 900 in ship
contracts announced recently, the
Navy this week awarded nearly
$137 600 900 in orders for strength
ening air defenses and shore facili-
ties. some involving stable con-
struction projects.
Engineers saw evidence of the
earlier stages of the huge defense
program in $16,l75 900 contracts for
shipbuilding docks at the Philadel-
phia and Norfolk, Va, Navy yards.
Still to come, business reports
said, was the bulk of the industrial
plant expansion expected for pro-
duction of aircraft equipment, mu-
nitions, tanks and a wide assort-
ment of other fighting gear.
A $30,000,000 smokeless powder
plant for the Louisville industrial
area-the second new powder plant
planned inland-was reported to
have been agreed upon by the War
Department.
President Roosevelt's additional
request for nearly 5000, 900 900,
making a $4,000, 100000 defense
program, was said to call for more
than $500 900 900 in new plants and
industrial equipment.
Tax Obstacle Removed.
Business circles saw one obstacle
to defense plant expansion removed
by the administrations agreement
to permit = five-year tax write OH
OF the costs Of new war plants, sub
ject to congressional approval.
| Railroads and electric power pro-
ducers also prepared to meet heavier
burdens expected when the billions
for armament pour into industrial
channels.
Rail equipment buying was build
ing backlogs of future work for in
dustry. Repairs were speeded for
the expected autumn rise in traflic.
Residential building, rising to a
new peak for the year, was the main
prop in sustaining the Associated
Press weekly industrial activity in
dex near the top of the late spring
and summer upswing.
The index dipped slightly for the
first time in more than two months,
but the setback was ascribed chiefly
to Fourth of July curtailments and
slowing Of work for vacations. This
gauge Of factory activity stands at
1855 per cent of the 1929-30 level,
compared with SO year ago.
Drawing a steady flow of orders
from the revived capital goods in
dustries, as we'll as for inventory
accumulation before the defense
program burdens production facili-
ties. steel makers quickly got back
into high production after indie.
pendence Day shutdowns.
Steel Rate At High Levels.
Turning out steel at the fastest
July pace since 1929, the industry's
operating rate was above Sc per cent
OF capacity, compared with around
50 per cent q year ago.
In contrast with the busting In.
dustrial panorama and expectations
OF q construction boom when defense
spending moves out of the blueprint
stage. stock market speculation idled
In one OF the slowest trading spells
in years.
Brokers explained the Wall Street
inertia as partly the result of a
desire by traders to wait for a bet.
ter view Of the presidential campaign
lineup and to see how England
stands up under Nazi air and U-boat
attacks. Moreover, the proposed
steeply- graded tax on excess COR
porate profits was cited as a damper
on the buying urge.
On the other hand, bonds have
been rising leisurely but consist
emily. opening wider the gate to
corporate financing by that ave-
nue.. The preference for bonds over
STOCKS was ascribed by investment
experts partly to tax considerations
1t was pointed out corporations
inquire income taxes after allowance
Tor bond interest so that the ex.
cess profit taxes would leave tho
bondholder in relatively better DO.
sition than the share owner.
Trade Gains Sharp.
Striking gains in retail trade were
recorded in some districts where ex.
panS1On in machine ,nok,rg .t..,