Where & Why

In business indices last week there was evidence of little but stagnation. Steel production rose from 33% to 35% of capacity, highest point since November. Car loadings rose a mite in expectation of the new rates. But lumber output was off 6% for the week, power production 2%, oil production 0.8%, soft coal 8%. Bank clearings were at a new low since 1934 but gold was pouring into the country at a rate which showed that the rest of the world still thinks the U. S. the safest place to cache its valuables. The stock market proceeded to slip from 107 to 98 on the Dow-Jones industrial scale. These mixed statistics could be interpreted almost any way. But both Henry Ford and Jesse Jones chose to be optimistic.

Said Mr. Ford: "Nothing that has occurred during the last few weeks has changed my belief that a prosperous era is ahead of us."

Said Mr. Jones: "I am not at all pessimistic. ... I am convinced from my contact with business all over the country that there are no real basic economic ills responsible for the present setback and that the worst part of the recession is in the minds of the people."

That the entire country is commercially going to hell in a hack is certainly not true. While generally bad, business is not equally bad everywhere, a point not generally appreciated, but brought out last week when Dun & Bradstreet published in Dun's Review a nationwide chart of trade volume at the end of January (see map). Prepared by Dr. L. D. H. Weld of McCann-Erickson, Inc., the chart was based upon Federal Reserve Board figures for bank debits, wholesale sales and department store sales, R. L. Polk & Co. figures on new car registrations, Editor & Publisher's statistics on advertising lineage and Life Insurance Sales Research Bureau statistics on new policies. Aside from variations in the price level, for which Dr. Weld made no provision, the Dun & Bradstreet analysis gives about the best picture of the current distribution of depression. Published monthly, it is particularly useful to salesmen, many of whom make a policy of telephoning Dun & Bradstreet where to go next.

Where not to go now is obviously the industrial East, hardest hit section of the U. S. Because of the slump in automobiles, trade in the Detroit area was off 26% in January from January 1937. New England trade was down 21% as its rambling textile mills operated on a 3-day week. Glass, steel and auto-part mills were listless in northern Ohio. Northern Illinois trade shrank as Chicago unemployment grew. In Manhattan trade volume plumped 19% with cinemansions and department stores feeling the pessimism of Wall Street.

Not quite so hard hit are the semi-industrial, semi-agricultural regions such as upstate New York and Pennsylvania. Cold blast furnaces drove trade in the Pittsburgh region down 19%. In the furniture manufacturing area near Albany, citizens felt the dearth of new furniture buying and due to that and other causes trade fell 15%. Florida's dwindling tourist influx was offset by a flock of new paper mills to keep the decline to 18%. Birmingham coal and iron mines were less active. Cotton mills in Georgia and the Carolinas, which were working overtime year ago, were generally on part time. In Southern California the 13% slump was largely explained by dwindling cinema revenues. Rest of the far West was better off except for the cattle ranching States of Wyoming and Colorado, the mining areas of northern Arizona & New Mexico. Purely agricultural regions so far have felt the pinch very little. In Nebraska and Iowa trade was off a mere 1.8%. Farm prices have fallen somewhat, but with bumper crops to market farm income has held steady. In neighboring Kansas and Missouri trade was off about 8% because depression in Kansas City and St. Louis counterbalanced country buying. In Texas and lower Arizona and New Mexico, the stability provided by bumper 9-c- cotton crops is notably enhanced by the oil business, about the only U. S. industry still going at close to full blast (because of war demand and the fact that people have yet to stop driving their cars). In that region trade in January was off a mere .1%. Last week salesmen were calling Dun & Bradstreet to report: "In Texas they don't know a depression exists."

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