BOOM!

Largely a convenient fiction is the statistical notion of "normal business." When depressions end, booms are usually just around the corner. Last week with Depression vanishing into memory, the portents of BOOM drummed excitingly throughout the land. Declared the president of the potent New York State Council of Retail Merchants, John C. Watson, in a Manhattan speech: "We are moving into a feverish time of activity during which our business machine is likely to become more complicated than ever. The boom stage is not here yet but we are so near it that we have no time to lose in getting ready to meet it." Indeed, retailers are expecting to meet the boom this month in Christmas trade which will be the heaviest in dollars since 1929 and may exceed that year in volume of actual goods. In rural sections retail trade this autumn has already topped 1929. City counters have been jammed ever since the holiday shopping started after Thanksgiving, with a notable improvement in demand for quality and luxury lines. In Manhattan stores furs have led all departments in gains over last year.

R. H. Macy & Co., big Manhattan department store with the slogan "It's Smart To Be Thrifty," has plugged sable wraps at $22,000. Regularly advertised are Capehart radios at $2,500.

"Not Since '29--So Much Extra Cash To Spend," lushed the Wall Street Journal last week in advertising copy which was simply a facsimile of its front page with ringed items about record automobile show attendance, a coming Florida boom and fat extra dividends. November was the greatest dividend month in history, with total declarations, mostly payable before Christmas, mostly inspired by the Federal tax on undistributed profits, footing up to more than $880,000,000.

Behind the nation's counters the boom sounded even louder. "Already there are indications in some centres of merchandise shortages," reported the New York Times.

"The possibility of serious scarcities appears imminent. Manufacturers and wholesalers tell of rather frenzied calls from some customers and a willingness to take almost anything in the way of merchandise." Cotton mills have more unfilled orders on their books than at any time on record.

Largest for any month in history except June 1933 and January 1929 was the consumption of raw cotton in October (646,000 bales). Yarn mills in the rayon trade have been at capacity for more than a year. In woolens, unfilled orders for men's wear goods have doubled since September, with prices up 10% to 15%.

No plainer boom portent has been seen than the recent upward surge in prices, Moody's commodity index having risen 20% in the past six months. Wheat at $1.25 per bu. last week was at a six-year high, cocoa at 11 1/4-c- per Ib. at a seven-year high, rubber at 19-c- per Ib. at a seven-year-high.

So hot had the boom talk grown by last week that newspaper statisticians were already compiling lists of industries which will set all-time production records in 1936--a job usually reserved for the annual year-end review editions. Such Depression-reared industries as plastics, airconditioning, Diesel engines, cellulose products are sure to make new marks.

Records will also be made by shoes, trucks, cigarets, rubber, gasoline, aluminum, oil burners, mechanical stokers, electric refrigerators, washing machines, electric power production.

No boom is possible without strong activity in the capital goods industries. Real revival there got under way in the summer of 1935, has been snowballing ever since.

The country's copper & brass fabricators are operating at 95% capacity. Steel production in the last two months exceeded the figures for October and November 1929, and the year's output of some 47,000,000 tons will not be embarrassingly short of the 1929 total (56,000,000 tons).

Meantime operations in the nation's steel mills were boosted another notch this week to 77% of capacity, a Recovery high.

One thing that is helping to raise steel operations at a time of the year when they generally fall is railroad buying. With traffic on the mend the railroads have started to buy rails and equipment in a big way for the first time in years. In the three months through November the railroads ordered 680,000 tons of rails and fastenings. In the same period of 1934 the total was a measly 36,000 tons. Orders continued to pour in last week, Atchison, Topeka & Santa Fe alone requiring 155,000 tons of rails and fastenings worth $6,135,000, biggest single rail order since 1929.

Even more impressive has been the buying of cars and engines, a type of business which titillates two branches of heavy industry, steel and the equipment makers which use the steel. Fortnight ago New York Central ordered 100 locomotives at one crack, more than were ordered by all railroads last year (83 ). Last week, along with its rails, Atchison ordered 27 locomotives and 3,025 freight cars. Pacific Fruit Express, jointly owned by Southern Pacific and Union Pacific, ordered 2,000 new refrigerator cars, announced reconstruction of 1,750 old ones, at a total cost of $10,500,000. For joint service between Chicago and the Pacific Coast, Union Pacific, Southern Pacific and Chicago & North Western ordered two 17-car, streamlined. Diesel-electric lightweight trains from Pullman and General Motor's Electro-Motive Corp.

In all this booming excitement last week only one gloomy note was heard. That was croaked by Herbert Clark Hoover in Manhattan for a convention of eminent engineers. Before his fellow engineers Mr.

Hoover took up the theorem most recently enunciated by the Brookings Institute in Washington--that the trouble with Capitalism is capitalists.

"I am convinced," said Engineer Hoover, whose own great days were boom days, "that when we fully understand the economic history of the period of the Twenties, we shall find that the debacle which terminated at the end of another apparently highly prosperous period was largely contributed to by the failure of industry to pass its improvement--through labor-saving devices--on to the consumer.

. . . We are headed in that same direction again today unless we can bring the intelligence and courage of the engineer into industrial statesmanship. If increased wages and profits are to absorb the savings which the engineer produces . . . and there is not a reduction in price, which is essential to increasing consumption, thereby we are ourselves by our own neglect producing that mass of technological unemployment."

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