Its Everyones Business

MARCH 15-Industry is rapidly snapping back from another coal crisis, other business news is in general favorable and the outlook through the Spring is by most observers considered quite promising. Most industries report comfortable backlogs of unfilled orders, department store sales in recent weeks have equalled in dollars those of the corresponding period last year, retail sales of automobiles show again over the same period a year ago, and new orders for machine tools are at the highest figures since August 1946. Orders for railway freight cars have shown a very encouraging pickup, with a total of 9385 cars in January and the N. Y. Central alone ordering 4500 in February. Construction continues very active. In January new housing starts totaled 80,000 against 50,000 a year ago and the daily average contract awards, according to the Dodge reports, were 57 pct larger. In the first 22 days of February the increase in awards was 27 pct. Lumber orders since Jan. 1 have run 22 pct above last year. All of these favorable factors bolster the opinion that the upturn in industrial output and employment which began last summer has not yet spent itself and that the setback caused by the strikes will be made up when people get back to work. Only in a few lines are there indications that primary production may be outrunning the consumption of finished goods, although inventory build-up would seem to be rather modest as the National Association of Purchasing Agents reported in February that 78 pct of its members were buying for 60 days or less. Industrial prices as a whole show no significant trend despite the continued alarm over both the immediate and the long-term possibility of inflation caused primarily by the government's increasing expenditure and its inability to balance the budget. A recent advance of 1.9 pct in primary market prices is viewed by some people as the surface symptom of renewed inflation, but even so it is more than two years since the alltime high was reached by the daily index of sensitive commodities in November 1947. Over two years have passed since prices received by farmers hit their peak and about a year and a half since all wholesale prices and the consumer price index touched their highest points in August 1948. The decline in the wholesale price index has been almost continuous, interrupted only twice by slight advances in the monthly figures from February to March 1949, and, later in the year, from August to September. Of course, this continued decline in the last half of 1949 largely reflects a downward movement in farm and food prices. Wholesale prices for commodities other than farm and food leveled out after June and now stand only slightly under the June level. Farm products are down by 22 pct from January and by 18.6 pct from August 1948. Food prices are down only slightly less. Consequently, the farm price support program is in serious trouble and has imposed a heavy financial burden on the Treasury. In those commodities other than farm products only building materials, chemicals and textiles have come down as much as the average, while housefurnishings and metals and their products have fallen hardly at all. Glancing away from the domestic front, the results of the British general election indicated a highly inconvenient situation, that public opinion there is so exactly deadlocked as to divest the victors of much ability to make forceful decisions or create significant policy. It is generally considered that another election in the near future would give substantially the same result. The British people are equally divided and the politicians are not likely to precipitate another appeal to the country until there is manifest reason to believe that external and internal circumstances have changed sufficiently to permit one party or the other to obtain a decisive verdict. Because of the lack of a clear mandate steel nationalization will likely lag in Britain. In the meantime there is considerable discussion going on as to whether the European steel industries as a whole are at a disadvantage in world competition with the American industry. An article in the "Statistical Bulletin" for January of the British Iron and Steel Federation takes issue on this point with the authors of the Geneva report, observing that they wrote before devaluation, and this particular conclusion "has been overtaken by events." The "Bulletin" also contends that the statement was in any case incorrect so far as Britain was concerned, and that it was based on scanty and insufficient evidence. To support the rebuttal a detailed and extensive comparison is made of the home prices of certain steel products in Britain and in other countries of the world. The accompanying table gives a selection of the prices published. It sets out the changed position since devaluation and since the recent increases in American steel prices. These are home market prices; no doubt in competitive export business some of the price levels could be brought closer together at need.