Old Refrain

An almost forgotten phrase sounded loudly again last week. It was "seasonal decline." In Akron the Goodyear Tire & Rubber Co. cut production 30%, and other tire companies followed suit. It was the "normal" winter slump which, before the war, was common to the industry. But it was the first time it had happened since the war. Said Goodyear: ". . . The big postwar demand has been filled."

Radio and electrical appliance companies were also shocked by seasonal short circuits. In Philadelphia, Philco Corp. laid off workers in its radio division, and Proctor Electric Co., which makes 22% of U.S. irons, also slowed down.

Where's the Rush? Furniture dealers suddenly found their warehouses full. The Wall Street Journal reported that a Los Angeles dealer had canceled two carloads when they failed to arrive on time. The manufacturer called him long distance and begged him to reconsider. Said the dealer: "That's the first experience of [that] kind I've had in six or eight years."

Department stores were still waiting for the Easter rush. Dollar sales were still above last year (by about 5%), but unit sales had slipped alarmingly. And the $372 million slump (10%) in charge accounts between Dec. 31 and Jan. 31 had been a good bit more than seasonal. Merchants were worried.

Textile mill owners still said they were booked solid for months ahead. But last week cotton textile men convinced the Administration that supply just about matched demand, and the Administration dropped plans to set up voluntary allocations.

Like Old Times. In housing, the market in high-priced old houses was so slow that they were no longer bringing boom prices. Hotelmen experienced a strange feeling: they had empty rooms for the first time in years. In some cities vacancies were up to 20%. Said a traveler: "The trains are filling up again with salesmen talking sales. It's like old times."

It was not quite old times yet. Some of the slackening was only seasonal. Production was still booming; but employment was down 3,000,000 from the peak. There was no question that more & more businesses were getting near the end of their backlogs. The question was: How seasonal can the U.S. economy get without running into trouble?

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