Show NATIONAL CITY binik REPORT ON 0 BUSINESS the business recession has continued during december altho the rate of drop has been slower than in the fall months and a few signs have appeared that the decline in flattening out even in good years industrial operations are likely to slacken toward the year end due to the holidays and inventory period and when times are bad the curtailment is usually extensive the steel industry operated during christmas and new year s weeks at only 23 5 and 19 2 per cent of capacity respectively ively automobile and textile operations have been re deuced further according to preliminary figures the federal reserve board s index of industrial production which dropped from in august to 90 in november will be still lower for december I 1 in contrast with these declines the commodity markets have been firmer and new orders in some lines have picked up moderately sales of cotton goods have improved to the best figures since last spring and in many constructions have exceeded production buyers have been operating a little more freely in coppel and hides the wool market is steadier and the price of steel scrap a commodity which is a sensitive indi cator of conditions in the steel industry has rallied after a long decline this modest improvement in buying evidently reflects a need for the commodities for there has been no change in the prevailing policy of keeping down commitments no one can state positively whether this improvement will hold or when it will become sufficient to halt the decline in employment and income business men are not optimistic on the nearby prospects however a period of stability would naturally be expected after a drop of well over 25 per cent in the industrial production of four months all movements of business tend to exhaust themselves and the sharper t the e re cession the sooner the leveling out should come for four months there has been a great curtailment of expenditures es specially ally by the industries themselves and by distributors of goods and to a lesser extent by consumers also the effe effect ct has been an swift recession nevertheless this curtailment represents the effort of each individual involved to strengthen his own position and as each accomplishes that purpose the general situation will be strengthened our comment at this point is that each individual ual bus iness man felt the individual need of curtailment of a position free if possible of danger and that was only good common sense in prudent business management the first concern of business men as the recession developed was to reduce their inventories and commitments distributors tribu tors shortened their purchases of goods and manufacturers their buying of materials and in all quarters output was cut down stocks of textiles on the whole are gradually being absorbed woolen mills have had the poorest season on spring fabrics in many years the curtailment on rayon and silk has been extreme for several months and improvement is in order the cooperative attitude of labor in the new england shoe factories accepting wage reductions is a notable development it means that labor will have work instead of being unemployed and is a demonstration that the interests of everyone in the shoe industry are mutual rather than antagonistic the autom ible situation has become more unfavorable and the nearby outlook is not encouraging consumption will be maintained when eich etch individual has worked off his exceeds stock buying and has recovered I 1 to the level of consumption that level is not fixed it varies with the level of employment and its consuming power the factor of confidence the will to spend and invest is important and confidence is manifestly low the public attention is centered upon taxation and other questions upon which government policy is on the of december the federal government offered million dollars worth of 8 year 21 per cent bonds for sale which were heavily over subscribed this shows that money dare not go into business and has to incept a miserable 2 per cent no field in industry to better this and be safe it is a telling fact the volume of currency in circulation increased only a little more than millon dollars compared with million when 1937 began think of this money continued easy 90 day treasury bills are being discounted so that the yield is slightly above aloth of one per cent there is no field in business tor for the use of money the united states uses use s 44 million ounces of silver a year in the photographic industry silver nitrate for films last year most of the major divisions of the social security program were put into operation and the special pay roll taxes on employers and employed emp loyes have now become an important source of government receipts the greater portion of these taxes have been invested in securities for trust funds for the future payment of old age pensions and unemployment insurance and in this way provided cash with which the treasury in recent months has financed its deficit without having to borrow money in the of open en market the new york state De of labor estimates that men and women now employed will apply this month for weekly benefits in the event that requirements for benefit payments may exceed the current receipts from unemployment taxes the treasury would be called upon to liquidate part of the trust fund investments into cash the railroads are exempted from the general social security act and have their own retirement act under which the government took over the existing private pension systems and levies taxes upon the carriers and their employed emp loyes this plan was put into operation in the latter part of the year and through december 68 in ilion dollars to the extent that taxes ere are passed on in the form of higher prices for goods and services sold they or course raise the cost of living for everybody the department of alture is responsible for the estimate that 51 per cent of the farmers produce 89 per cent of all farm products that leave the farms while the other 49 per cent produce the other 11 per cent the american wage earnia gets 17 1 7 times as much b buying uy power for an hour hours s work as does the wage worker in gt britain in russia the average buying power of wages is ably a tenth of what it is here one of the common fallacies of the day is the theory that abundant production no longer is a problem but that faulty distribution is to blame for the poverty and want that afflict the world the key to prosperity is in balanced exchange relations the report Is full of much meat for thought so 0 0 at |