Evening star., 1940-08-14
Business Is Slow
In Readjustment
To Rearmament
Industries Are Reluctant
To Go Ahead Until Tux
Situation Clears
BY GEORGE T. HUGHES.
Special Dispatch to The Star.

Special Dispatch TO The Star.
WALL STREET, NEW YORK,
Aug. 14.-Readjustment to the real
ities Of rearmament is proving a
slow and difilcult process both in
the markets and in business, and
the transition is not eased by the
political campaign now getting un-
der way. The industries primarily af-
fected by the defense program are
reluctant to 90 ahead until they
know just where they stand on the
matter of taxation; those only indi-
rectly affected. the consumer indus
tries, hesitate because they cannot
foresee how the absorption of so
much OF the country's man power
in war effort. either in the military
service or in war industries which
cannot be uniformly distributed
geographically, will affect them.
The markets reflect all these doubts.
The tendency in the financial dis
trict is to put all the emphasis on
the necessity of getting industry
fair treatment with regard to profits
and taxes, overlooking the political
aspect which looms so large in the
eyes Of Congressman, but the latter
is important also, for conscription
Will not be accepted by the country
at large unless it is given to under
stand that capital makes its sacri-
flee just as willingly.
What is needed is a fair and
understandable exposition OF the
necessity of protecting industry
from loss, which under a capitalistic
economy, is in the interest of all
The point is that without that as
surance private enterprise cannot
proceed and the program will fail
or be thrown back on the Govern
ment itself with all the inefflciency
and waste, both of time and money,
that will be entailed.
Retailers have been among the
first to express their fears of the
results of the draft. Such statistics
as are available from the 1917 ex-
perience, however, do not seem to
warrant anxiety. Then it developed
that store trade rose substantially
in dollar value although, of course,
not so much in volume. The situa-
ton at present moreover is quite
different. In the first place the
Nation is not at war and in the
second there is much unemployment
from, tho kc NJ u,hicl,
consumer clientele can and will be
recruited. Under the circumstances
the course most conservatively in
dicated is for the businesses con-
cerned to make no important change
in their usual policies.
The business indexes record some
further setback from the recent
peak. 1t does not seem to establish
a trend, however, and continuous
progress was not to have been ex-
pected. Resumption by the auto in
dustry after work begins on the new
models will take up the slack unless
some other obstacle makes its ap-
pearance Motor car sales to con-
sumers have held up we'll. but it is
still a question of how much of this
demand was in anticipation of high
er prices and how greatly, if at all.
it will affect sales of the l941 cars
incidentally the motor industry pre-
sents good example to other in
dustries by carrying on to the best
of its ability.
In another field the question of
retarding effect on business is raised,
and that is residential construction
The Labor Department estimates
hct in the first six months of this
year 24l.3l5 new dwellings in non-
farm areas were built. and to an
aggregate value of 1924. .476000. an
increase of 8 per cent in the former
figure over the same period in 1899.
1t may be there will be some slow
ing down here. but it is not likely
to be large one At the start at
least only the unmarried men are
to be drafted The country is still
greatly underbuilt as far as dwell
ings are concerned and the record
shows that the construction cycle
usually runs its course regardless of