Evening star., 1941-02-02
Industry Likely
To Take Level
Path for Time
Many Plants Already
Near Capacity for
Present Equipment
BY FRANK MacMILLEN,
Associated Press Business Writer.


trial drive to arm America and
Britain now may be entering a
plateau" period characterized by
greater stability of production and
prices after the first few months
of hurried preparation, many busi-
ness observers here believe.
This probably will be temporary
but production men and financial
quarters are said to be taking it
into account in their plans for the
next few months.
One reason cited for expecting a
more nearly level period immedi-
ately ahead. executives point out,
is that many key industries are
already at about peak production
with existing plant capacity.
Much new plant space is under
construction in defense lines but
the wheels will not begin to turn
in most of these factories until
later this year, or in 1912.
AS one industry after another
reaches the stage where a major
portion of its peak output is being
called for in the defense effort, it
does not necessarily follow that ad-
ditional plant capacity will be con-
Structed to accommodate an endless
upward spiral Of production.
Priorities Established.
Already governmental or semi-
official systems of priorities for de-
fense needs have been set up in
some industries The steel busi-
ness has such machinery, although
il has not been called into action.
Zinc mining and processing, pos
sible tight spot in the defense
effort, was added to the priorities
list this week, though no immediate
steps are contemplated.
However, the growing establish
ment of priority controls analysts
say, will have the effect of STABILIZE
ing production because it will be
used to defer or curtail non-essen-
tial consumption of materials.
In a wholly unofficial way, this
factor is at work in the key auto
mobile industry. January figures
on production show them at his
toric' peak for the month The in
dealers at an unprecedented rate
to have plants and labor free for
defense work in greater quantity
later Dealers, who feel that de-
iveries of pleasure vehicles may be
delayed or curtailed as defense work
Swells, are willing buyers.
Thus while car production may
well decline this spring and sum-
mer, defense orders should fill the
gap.
Index Changes Little.
1t may be symptomatic OF the
greater stability some observers see
ahead that the Associated Press
index of industrial activity, while
at the highest levels on record has
shown but minor changes for the
past three weeks.
Commodity prices. too, have begun
to show signs Of leveling move
ment. A few key materials have
advanced modestly in price in the
last month. the bulk have stood still.
Here too, combination of
voluntary restraint by buyers and
sellers and of official pressure has
operated to hold down the modest
uptrend which got under way last
year.
Two examples of how this con-
troll has worked have appeared this
week. Railroads, the largest origi-
nators of the scrap metal used by
the steel industry, reported an
agreement not to sell their supplies
above a figure the defense author
tiles regard as reasonable"
Again, copper producers saw the
Government import a second large
shipment of copper from South
America, although the demand here.
which is great, has caused no
recent advance in the normally
sensitive price.
Whether similar period Of
stabilization was ahead for wages,
another prime factor in industrial
costs, was a question to which most
business observers were unprepared
10 give dennlte answer.
Legislation Watched.
One still nebulous factor was
bills tossed into the legislative hop
per at Washington this week de-
signed to limit or prohibit strikes
on defense production.
Business Week, widely read by
executives. suggested that another
development of the last few days
might prove to be of much long
term significance in stablizing and
StsndardiZing labor costs.
This was the meeting scheduled
for February at San Francisco at
which an attempt will be made to
set wages for the entire West Coast
shipbuilding industry. Inspiration
for the meeting was said to have
ccne from the Defense Commission
at Washington.
If successful, said the magazine,
Other defense industries may follow
suit" 1t mentioned as possibilities,
the West Coast aviation industry