Evening star., 1949-11-27
Business Up Sharply;
Government Spending
Briohtens Outlook
ByG. A. Phillips

NEW YORK, Nov. 26.-Buslness
and industrial activity set siz-
zling pace this week as additional
firms ironed out the last remain
ing kinks caused by the recent
steel and coal strikes.
A number of important business
barometers hit their highest points
since late last winter or early
spring. Others moved within close
distance of levels prevailing be-
fore the first crippling major
strikes hit industry on September
10. Retail trade was above last
week but again slower than at
this time last year.
With any sort of luck and bar
ring a renewal of the coal strike
when the present truce ends next
Wednesday, many economists be-
lieve the stage is set for good
run of business through the first
quarter of next year, perhaps even
through the first half.
There are important factors to
be taken into account this year
that have not been available be-
fore when computing the prob
able trends in the normally un-
certain first quarter.
GI Cash to Help.
There is the $4,000, 100000 G1
insurance money the Government
will begin to pour out January
/. That will be an important
prop in the consumer goods in
dustries at time when it will
count the most.
The Government is currently
spending anywhere from several
hundred thousand to several
hundred million dollars more
each day than it takes in. That
is a timely boost to inflationary
psychology and will tend to make
prices rise at a season when they
normally might be expected to
drop a little. This will make peo-
pie buy more than they normally
would and thus becomes another
strong spot in the consumer
goods industries.
Much lower inventories all the
way from the corner merchant to
the biggest manufacturer rounds
out the unusually favorable pic
ture in the consumer field. It
was excessive inventories at every
one of the important junction
points between manufacturer,
professor and consumer that was
credited with bringing about the
slump in business that hit with
force late last spring.
Holiday Has Effect.
Widespread observance Of
Thanksgiving Day as a national
holiday left it's imprint on pro-
duction statistics as usual, but
to a smaller degree than usual
due to conditions created by the
steel and coal strikes.
The steel industry, endeavoring
to get every mill back into pro-
duction at the earliest possible
moment. went right on working
on Thursday, paying overtime to
its army Of hourly workers.
Based on early estimates, the
industry operated at 1872 per cent
of capacity and turned out 1,441,-
600 tons Of steel. This was the
highest operating rate and most
tons since the industry was
knocked out by labor conflicts in
November.
Freight carloadings moved up
sharply with the return of q nor
NAL dow Of soft coal. All major
coal systems did q landofice
business IN contrast to the slack
times prevailing for more than
two months.
Observed in Some Mines.
IN the soft coal fields proper,
Thanksgiving was observed in
some mines while work proceeded
as usual in others. Output was
estimated at 11,500,000 tons COM
pared with the 100000 tons
brought up in the previous week,
the largest in any week since
April, 1948. Last years tonnage
was 1881, 900.
Electric power output was an
other important barometer that
responded with strength to the
stepped-up industrial tempo.