Evening star., 1940-02-11
Industry Loses
About Half Of
War Gains
Steel Output Drops,
Market Sentiment
Improves in Week
BY SMITH REAVIS,
Associated Press Business writer,

ASSOCIATED Press Business Writer.
NEW YORK, Feb. 10.-About half
the gains scored in the industrial
boom in the first four months of the
war have been lost this year, trade
data showed today.
The recession from the 1O-year
business peaks attained near the
end of 1889 was marked this week
by one of the sharpest declines In
steel operations in recent years.
Steel production has fallen from
around "a per cent of capacity at
the crest of the first tidal wave of
war buying to about u per cent.
The latest slash in the operating
rate dropped it from 77.3 the pre-.
vious week.
The Associated Press index of In.
dustrial activity scared in the first
four months of the war from 958
per cent Of the 1929 80 level to 1921.
The new year decline has taken II
down to 1893.
Despite the fact latest figures
showed the slow down still in prog.
ress, Wall Street seemed to take q
more optimistic slant on business
prospects.
Pickup Is Expected.
Stocks and bonds advanced in a
week OF the most consistent buying
in security markets since October.
The gains were moderate but trad
ers seemed to be specializing on
chances Of at least a seasonal busi-
ness pickup as spring approaches.
The stock market, particularly,
has reputation for anticipatinc
business turns. AS If expecting the
new year let-down of production,
share prices declined in the final
weeks of 1899.
With the acceleration OF the fall
in steel and predictions of curtail-
ment in textiles and other lines, the
contrary minded stock market
stepped out of its rut for a move on
the upside.
Moreover, underwriters took ad-
vantage of the improvement in
sentiment in security markets to ad-
vance plans for the largest corporate
f1nancings of the war period. Beth
lehem Steel filed with the Securi-
ties and Exchange Commission a
registration statement for $lo5,-
100000 IN new loans to refund old
debts at a lower interest rate. It
was one of the biggest corporate
loan undertakings in recent years.
Bankers Look Ahead.
Investment bankers, like stock
market traders, usually look ahead
and try to anticipate business
changes.
Also attracting attention IN Wall
Street as indication the recession
may not carry much farther were
hints of factory expansion to meet
war needs and the demands of q
generally higher level of consumer
absorption of goods.
Aircraft and machine tool makers
were judged in position to increase
production capacity, providing they
can obtain the capital and are con-
vinced orders will continue to roll in.
Boeing was among airplane manu-
facturers reported planning to raise
more capital
Atlas Powder revealed plant ex-
panSion in another war line. It
will Increase its explosives output
for sales to the allies with capital
provided by the British.
Aircraft engine makers rushed
plant additions in an effort to solve
what some observers say Is the bot.
tleneck" in the way Of larger war
plane output.
But tool and aircraft industries
seemed to be the exceptions rather
than the rule. New buying was
slack in most lines and manu-
facturers were reducing the big
backlogs of orders acquired in the
stampede TO increase inventories at
the outset of the war.
Steel Orders Lar.
Fresh orders for steel were esti-
mated by trade authorities to be
running at about IS per cent of
capacity, we'll below the actual op-
Grating rate. The first significant
sign of broader demand was a re.
port the Ford Motor Co. had taken
10000 tons Of steel, the largest au-
tomotive order this season.
Trade reports said Ford found
the steel makers in a mood to hold
out against pressure for concessions
on prices.
On the other hand, the ebb in
buying was apparent in further cuts
IN prices OF industrial metals and
reports OF some concessions on tex
tiles. Copper, lead and steel scrap
were reduced.
Some Of the more sensitive com.
(see INDUSTRY, Page E-3J