Looking Ahead

By Alvin T. Simonds President, Simonds Saw & Stccl Compoy

The heavy dotted line numbered 8 shows the actual in- was -27 per- cent ahead of the^av--erage for the three comcrease in th6 volume of loanable funds. This increase fore- parable periods previous to 198." ""itr ttt" rise in industrial production (general business), - In the New Ybrk World August l7t!19nry F-ord stated t";&;;i"". ""a in wholesale commod-ity prices. Theie that he thought the country had ceased bginq,sick "ld tll are also numbered 8. This is the long-time forecast first it is now well and will soon be strong- and active- again' but made many months that people-do not ;'s" know. this. To --many fr his forecast will be ft'.f,X"J. *':1i.',T:$#.'T1","1n:"ff:#5*,T::..Ii,'I'd:":1ilnrhis shows Firestone, close riiend ;:;;"';tli'-ptol.bty tors in tfieir cycrical fiuctuations. The heoay sotid tine is the votumre 3]t:1ffi",t;t;i :i M-t'Ford, says that ."',". later ii.rr". to oroduction. Federal Reserve Bulletin. Tnri{cii';"ri;; i';"";;;;;h;;;;ttv the- present -slump in cause later issues production, The lrgrrt dotted, line is wholesale commo-di9 rne- Presew -srurrP ,t"* ifr"i tt,.t" has 'qii"*;6;;ty sr.*v- Th9 ligh! solid tine\s industrial stock priccs. The Annalist business will .soon be ;;; *-L*fr"t of --, bstirnated moviments jre indicaied by breaking the lines with dots and are numbered succeeded !y greater setback. rhis, howevei l;",1n"',1"fi:l'"11?Jffi"#"':iLn":i trJffi* 1fi::'1fftil',,:l'.fl'ff!1"if S: prosperitv ttian-Ameri. ;;iy a minor move- comparable ontv t* aii""1ion-ana duratio.,-oi-li*a. - rr,.y t"e*J;i;i#';ril ica has known for ten ment. This data cor- cyctical swings by ri.-tifffir i9"ilG "fii*i-p*tr-""i "yliiLf low points years- Notice that ..[.i"t". tt " i""t-ti-" Minor fluctuations are omitted. Chart ^l -strg,ws the peak i"iecasts. B o ni de- inl932 higher than any -""Jl"a p.i."r have been increasing for over a month. preceding peak since the war. Ordinarily this immediately precedes improving busines5 Business men in general like politicians (see "Presidenand rising stock prices. Th. "-ount of .'.tti.""] in-circu- tial Prosperity" Harper's' August' 1930)' are willing to lation has increased; indicating better trade and higher make optimistic statements q's to business but are unwilling prices. Business is not much b-etter but it is some beiter. to give warning of coming depression' either directly or

The more than usual seasonal increase in electric power lil:l'.":tlJ,ill'35Lt*i",o$T"':"".n1!li'"it;;':"':r'liil?; production for the week ending August 9.is very significant' the time of depression. Optimistii state'ments from t6ose irving Fisher's Weekly Indexbf CommodityPrices-reached who never make statement3 of any other kind are severely its tJw on July 19 and has increased slightly each of.the discounted. We believe, howevdr, that statements from four weeks-since. This is also evidence that the cyclical Mr. Ford and Mr. Firestone will not be subject to such low point in business has been passed.- Automobile pro- discount. ducti,on from its low point at the end of July has risen an Business sentiment is much more cheerful, as it has rea' amount more than equal to the total decline during July. son to be. Fear, always greatest at_the extreme low point Business activity auiing the week ending Augusi 9, as gt $g cycle' is givin-g way- to confidence' Business will .measured by bank debiti outside New Yoik Ci[, show_e6 doubtless move up slowly from now on' Do not expect an increase of 16 per cent over the preceding week. Un- too much' That is rvhat caused the crash last fall' Barring filled steel orders of the United States Steel Corporation at unfortunate political disturbances this fall' the December the end of July increased gl,l63tons, the first increase since low will be simply a seasonat one and not as low as that March and the first July increase since 1927. The New of July' york rimes weekly i.d.* of Business Activity showed " .,1[:::,t"r:'*:Ti:':1 lliil;:;ii'ls*trTi';"1tf.'iln:; gain for the week ending August -9, the_ first gain since the the volume of general business or business activity. This last week in M"y. The American Machinist declares, fact must not 6e overlooked in applying forecasti in any "Dawn seems to be about to break after a long night in the particular case. Some industries turn, inlheir major movemachinery and machine tool markets." Stone, Webster & ments. earlier than industrial production, some at about the Blodgett, Inc., say, "The total capital (in the form of bonds, same time and some tater. A careful study of the chart is prefeired and common stocks) raised during the first half recommended. It shorvs the seven major swings since l9l9 of ttre current year for the further development of this coun- and forecasts the developing major swing in the volume try exceeded that during the comparable period of. l9D and of industrial production.