"Below Our Estimate"

With unhappy untimeliness, Secretary of Commerce Daniel Calhoun Roper last week remarked over the radio: "There is evidence of resistance to further business and economic decline, indicating that the liquidation period has about subsided."

Four days later the New York Stock Exchange staggered under the heaviest liquidation in four months. Beginning quietly on Friday morning, selling waves swept over the floor in successive shocks which knocked the ticker four minutes behind and kept traders on the jump with the biggest volume since January--1,600,000 shares. Next day, being Saturday, was only a half-day for trading, but the frantic dumping of securities reached 1,380,000 shares before the closing bell brought the debacle to a halt. As the ticker caught up, brokers for the first time in three weeks forgot to talk about Richard Whitney. They were too busy reading that U. S. Steel was down to $44, U. S. Rubber to $25, American Telephone & Telegraph to $117.50, N. Y. Central to $10.50, Pennsylvania R. R. to $15. Westinghouse to $70, Electric Bond & Share to $5, Chrysler to $41. Gloomiest statistic of all was the Dow-Jones industrial average, 106.6, lowest point since June 1935.

There was plenty of psychological stimulus for the decline. Political reports from France were gravest of the grave. President Roosevelt had twitted the "selfish few" in a speech at Gainesville, Ga. two days before. A better reason for the fall in security prices was that U. S. business in general has been bad for six months and last week got worse.

Last week power output was off 8%, automobile production dropped to 56,000 units against 101,000 year ago, steel production was at 33% of capacity, Manhattan department store sales were down 16%. car-loadings were a horrifying 75% of normal and the Federal Reserve Board's index of industrial production fell to 79 against 117 last August. The South, with 8 3/4-c- cotton (in 1931 it went to 6-c-, was not as badly off as Mr. Roosevelt told his Georgia audience it was. In the Far West business was far better than in the industrial East, but business sentiment was just as bad because ownership of U. S. industry is not so localized as the factories. And looming on the scene were industrial reports for the first quarter, generally expected to be terrible. Even the Government's business was bad last week. Contradicting advance reports, Secretary of the Treasury Morgenthau announced: "I would guess that income taxes might run between $20,000,000 and $50,000,000 below our estimate."

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