Evening star., 1940-11-17
.Defense0rders
Spur Activity
In Textiles
RetuiI Deliveries
And Prices Escape
Effects for Present
BY FRANK MacMILLEN,
Associated Press Business Writer

NEW YORK, Nov. 16.-The war
came closer to the average consumer +
and his pocketbook-this week as
the effects of the defense spending
whirl began to spread from steel and
the heavy industries to things like
the wool and rayon cloth which will
go into next falls suits and dresses.
Trade surveys showed the wooden
goods business had increased its Or
ders on hand by about so per cent
in the past five weeks. and few mills
were willing 10 promise deliveries
before next June, some even later.
Wholesalers were little worried
that the huge demand for fabrics
would show it's effects in retail de-
liveries and prices for the time being,
for clothing manufacturers have
pretty well covered spring and sum-
mer requirements. But by next
autumn, if demand continues apace,
things may be different.
Meanwhile, rayon mills we're rush.
ing along at capacity and appeared
to be headed for the greatest out
turn in their history this year. De-
spite pushing plants to the limit,
producers were said to have on
hand only about one week normal
consumption, instead Of the normal
80 days supply.
Advance Orders Placed.
Part Of the answer appeared to
be precautionary buying by makers
pF ciIrilio, clo+Iiy,r ,r-t,o ,v.or+a1 -
be sure Government orders would
not come along to delay their nor
NAL operations.
Some Of it. trade sources said,
was attributable to the greater rate
at which retail stores were selling
clothes as industrial pay rolls. es-
pecially in the areas where defense
orders are pouring in, continued to
swell.
With general expectation that
employment will continue to in
crease for months to come, plans
were laid for a brisk business next
fall and winter That conclusion
appeared to be borne out by trade
reports that wholesalers we're gen.
orally more active than retailers. al
though the latter were under the
handicap of storms and bad weather
in many sections this week.
But even as consumers goods lines
turned more active heavy industry
continued to grind along at a near
record pace.
Symptomatic of what appeared to
lie ahead in this sector was the an
nouncement of United States Steel
Corp. that it was increasing steel
ingot capacity at its Birmingham
property Estimated expenditure
for the expansion program was s25,-
100000.
Some steel men saw this an
nouncement as extremely signif-
icant, since there has been no net
gain in the ingot capacity of the
country for years. That actual basic
steel capacity might be approaching
the bottleneck stage in coming
months appeared fair inference,
although there has been VIDE
difference Of opinion in the industry
on this point.
Copper Imports Planned.
Another clue to the extent to
which industry may be pushed as
the arms drive intensif7os was re-
velation that representa- tives of the
copper producers and the National
Defense Council had agreed the
country would need more copper in
the next year or so than could be
produced here. Plans were formu-
lated to import metal from South
America.
While events of this nature placed
emphasis on the future. the actual
pace of industry slackened a little
this week after a drive which has
carried it forward almost without
interruption since summer.
The Associated Press index Of in
dustrial activity dropped down TO
1855 per cent of the 1929-30 aver
age from 1T the previous week. 1t
was the first setback for this indi-
Gator in five weeks. Even so, the
defense-keyed steel industry COM
ponent of the index rose to the
highest point of 1940
Building. both of plants for war
goods and of homes, continued one
of the main props of the rising busi-
ness cycle. Residential construction
appeared to show little sign of the
normal winter slackening and heavy !
engineering construction continued 4
for the 11th successive week to
top the relatively high totals Of 1889.
Building Costs Edge Up.
Building experts noted early signs F,
of higher costs in their field and \
there was considerable debate as to 4
what the eventual effect of such a !
trend might be on the volume Of
construction. (
Building of factories for defense I
work. it was recognized, would go Z
forward regardless of cost. but home I
construction, some thought, might !
be adversely affected.
Business .Week. noting that the ;
standard index of building costs
had risen for the past two months. :
took a slightly different view. IT,
said:
Ultimately, advancing prices are
bound to affect the willingness of
manufacturers and prospective9
home owners to buy factory and
living room space. But initial ad-
vances, such as have occurred so
far, only serve to whet appetites for
investment in property-there is
always the speculative prospect Of
making a turn in real estate. 2
Hence it hardly is sound to CON-
clude, at this stage of the game. thats
higher costs will put the quietus on
the incentive to build. It's the other
way around" 2