Evening star., 1940-06-23
Industry Increases
inventories 10 Meet
Uncertainties
New Buying Policies
Are Expected to Have
Widespread Effect
BY FRANK MacMILLEN,
Associated Press Financial Writer.

hSoOCldtcQ FrcsS Financial WflLsrs
NEW YORK, June GA change
in business thinking which may
have far-reaching consequences In
coming months became increasing
ly apparent this week as industrial
and commercial buyers took wider
steps to assure their supply lines
against delays from war and re-
armament.
Trade sources said factory stock
bins and merchandise warehouse
shelves were being loaded with sup
plies that in some categories were
enough to last several months.
This was in sharp contrast TO
policies Of even a few months ago,
when most buying was on a hand
to-mouth" basis in some Of the most
important sections of industry.
The greater anxiety about future
supplies was given a large share of
credit for the continued rise in the
business curve The Associated
Press index of industrial activity,
which comprises such fundamental
measures as production of steel,
automobiles, cotton goods and elec-
trio power, as we'll as home building
and freight movement, advanced
for the seventh week.
At 1049 the average for 1929-3O
equals 100 it was at the highest
point since last January, and was
best for this season in the past three
years.
Sharp Change Seen.
The National Association of Pur.
chasing Agents, whose members
jobs as buying men for many of the
key concerns of the country give
them unsual opportunities to gauge
changes in trends, said today:
"A considerable portion Of the
higher volume (of business turn
over) currently being witnessed is
due to consumers, both large and
small, once again anticipating pos
sible Tightening in delivery sched-
ules in numerous lines of trade:
hence the increase and extension
of commitments in protection of
manufacturing schedules"
The associations bulletin noted
that loss of import markets and pos
sible curtailment in some luxury
lines might make the business pic
ture spotty Then it sounded a
warning to its buyer-members which
may be reflected in factory activity
for some time to come:
There is sure to be witnessed a
feverish haste to produce materials
on Government orders and, before
these come into the market, 1t is
most essential that industrial inven-
tory replenishment Immediately be
more liberal"
This was the clearest indication
yet available that general industrial
activity was probably not going to
wait for Government orders to get
out of the blueprint stage before
their effects were widely felt.
Calmness Good Sign.
; Another strong indication that
business seemed destined to forge
ahead on the strength of the Amer
lean arms program was the calmness
with which the cancellation Of
French war orders was received.
While the collapse of France, 1t
was thought, might necessitate some
change in the character of orders
being placed here, assurance the
British were prepared in general to
take over French commitments
cushioned the shock.
But, with the fortunes of war as
swift-paced as they are today. most
business observers agreed, the real
underlying factor in confidence that
there were months and years Of
arms orders ahead was the many
billion dollar program for United
States preparedness.
The stock markets course during
the week lent support to this view.
1t not only ignored the French sur
render, and the possibility the Brit
ish may be in for a severe time, but
it actually advanced in good order.
Thus it continued the upward
move whcih has been under way
almost without interruption since
June 10, when it had it's final spasm
of jitters before the French collapse.
Average prices had gotten down to
the lowest levels in more than two
years.
In Washington, plans moved for
ward swiftly, though most industrial
quarters appeared still uncertain
how soon Government orders would
be translated into production man
ayers schedules in mills and fac
tories.
Huge Orders Placed.
Some $370,000 900 of orders for the
Navy were placed during the week
and Army orders were expected
shortly. Nevertheless, the full i'm
pact of arms buying was not ex-
pected by most analysts for some
months.
Industrial leaders generally point
ed out that mass production, whether
OF weapons or other materials, gen.
orally was the third step in a COM
plicated process. First came agree
ment on plans and specifications,
then tooling to do the job. Henry
Ford. for instance, had calculated
that it would take six months, "and
no red tape" for his plants to pro-
duce planes in quantity"