Show THE NATION il ciby B ink REPORT I 1 OR OCI OBER the month of october has brought further evidence of business improvement and despite some disappointments the indications tor for the near future have continued favorable no one would say that a surge of unqualified optimism is sweeping over the country for the situation is spotted in the equip ment industries particularly the demand is still lagging and re tail trade has been held back by unseasonably warm weather nevertheless the business indexes have been moving upward steel automobile and building operations have improved and the textile industries have held their ground the b ederae re serve index of industrial production rose to 90 for september from 88 in august and the preliminary figures indicate another and probably greater rise in october moreover some improvements in upward revisions of factory schedules have been announced both security and commodity prices have been firm with indications that buyers are willing to operate a little further ahead than formerly the automobile situation is of outstanding importance in the early business outlook there are people both within and without the industry who fear that retail sales of the new models will fall short of the rising hopes but the early indications as given by dealer orders and field reports are encourage ing both general motors and chrysler have announced up ward revision of their assembly schedules due to continuing heavy dealer orders november automobile sales figures will signify a great deal to all lines of business if they are favorable many other industries can dra dram encouragement from them the october building figures thus far received are little short of sensational contracts awarded during the first half of the month represented the highest daily rate since 1930 As compared with a year ago the increase was 87 per cent steel prices have had sharp fluctuations during the month department store sales were 14 per cent below last year business sentiment has not shown improvement equivalent to the rise in the business indexes unquestionably many businessmen are depressed by the thin and uncertain margin of profit which they can obtain and which is emphasized in the third quarter reports it is natural and correct to judge whether business is goc i ir bad by whether it is profitable or not for unless it is profit profitable auie there is not much inducement to go ahead with new investments in plant and productive facilities which have always represented a great proportion of the business of this country businessmen fear the rise has been due too much to gov spending and that it will not last longer than the spending lasts at best they cannot see far ahead this limits their millin willingness gness to undertake new projects or capital improve ments even if they are able it is undeniable that government spending has a depressing as well as a stimulating effect from this position it is but a step to the argument often made that private investment will not recover to take up where government spending leai leabes es off consumer goods tion alone cannot carry on a forward movement indefinitely the government spending will not reach a peak until next spring it is not clear that the tapering off will be sharp after the peak is passed finally the upturn is still too young to bring new maladjustments which ordinarily stop an there is an extraordinary increase in the amount of idle money in banks borrowing for commercial purposes remains slack discount rates are under 0 03 per cent for treasury bills which shows the pressure of funds seeking investment the volume of corporate financing during october was largest since june 1937 automobile annual return on investment is 5 1 per cent brewing and distilling 10 1 food products 11 per cent household goods and supplies 10 2 per cent the average of all re poring firms was 3 9 per cent aircraft show a marked improvement in general earnings many business show a deficit although the agricultural adjustment act of 1938 is but eight months old there seems to be a general agreement that moves will be made in the next congress to amend 1 ii mr air wal and lace favors a processing tax manufacturers and consumers will not share his enthusiasm in this respect A considerable number of farmers are criticising criticizing critic ising the farm act the improvement in livestock prices is noticeable and is attributable to the drouth years and the accompanying libuda tion of breeding stock the pig slaughter and improvement in consumer incomes which meat pries es closely reflect after five years of effort cotton and grain farmers are far from the balanced production and which the farm program seeks many farmers as well as other people sincerely believe that the farm program is proving ineffective and unworkable the effectiveness of control is uncertain low wheat prices have spread dissatisfaction among wheat growers the wheat crop is the fourth largest on record and it is coincident with the large yields of canada and europe it is not the general thing to welcome a poor crop but it is plain that a large yield next year would load the farm program with a fresh burden of trouble the farm program faces a dilemma we venture to sa that it is the inevitable result of continuing as a long term terin pro gram measures the soundness and justification of which were necessarily limited to an emergency the present situation tends to make the emergency lasting will we have income partly to all industries and to all occupations 9 in that event must it not fix the number of per sons that shall belong to each group and the ikuo ne each group shall have from the others where is the stopping place |