BUSINESS IN U.S.A.

Auckland Star, Volume LXIV, Issue 261, 4 November 1933, Page 4

BUSINESS IN U.S.A.

SLOWS DOWN rN AUGUST. "A BREATHING SPELL." Summarising business conditions in the United States in the September issue of the "Literary Digest," Mr. E. G. Rich writes as follows:— Current indices offer conflicting testimony as to the condition of business. Freight-car loadings continue to exceed the record of a year ago by more than 20 per cent. On the other hand, steel production is still receding from the year's high point reached in July. Building contracts in the first three weeks of August, the latest period for which figures are available, were 20 per cent above the July average, but lumber production is still running ahead of orders. Almost each day sees the release of additional bank deposits previously tied up since the bank holiday of last March, but no expansion in bank loans is visible as yet.

_ The most generally accepted interpretation of conditions is that business is still tossing in the doldrums, which it entered toward the close of July, with no clear indication as yet of the direction from which a breeze may be expected.

Short-lived spurts have alternated with slightly more extended recessions to bring the general level of business to a point approximately 22% per cent below what would be considered normal, in ordinarily prosperous times, for this season of the year. Well-known economists and financial authorities attach significance to the situation in varying degrees dependent upon whether they regard business conditions as the product of events already past, or as a deliberately assumed position to meet the effects of developments still to come. Viewed in the former light, this recession from the level business had reached when its first burst of energy was spent, is in,, no wise disturbing. Then, for four and a half months, business had climbed steadily from a starting point nearly 50 per cent below normal, and at a pace it had not previously equalled in close on to four years. Such progress demanded a breathing spell, and a period of adjustment to the novel conditions of the National Recovery Agency, and the operations of the Agricultural Act appear a logical sequence to the efforts business had already put forth. Even the most ardent supporters of the recovery programme acknowledge that it has failed to create the number of new ; jobs it was expected to produce; that commodity prices have increased faster, , and to a greater degree, than farm incomes, with dissatisfaction on the part of farmers, and loss of anticipated purchasing power; that general prices have mounted to meet increased production costs, under the various codes, to levels that offset the increased buying power originating in more jobs and higher minimum wages. They also admit that the application of codes to industry has fomented trouble between Capital and Labour; that the public works programme will fall far short of providing sufficient stimulus to set in motion adequate production of capital, or producers' goods: and that the Securities Act and the failure of the i Administration to formulate a definite monetary policy are acting as deterrents to private financing of industry, which is essential to any permanent return of prosperity.