After Labor Day two years ago something happened to Recovery which had been booming—the bottom fell out of it. After Labor Day last week something happened to the business stagnation, miscalled Recovery, which succeeded 1937's sharp Recession. What happened did not even vaguely resemble 1914's war-induced economic scare. It resembled far more 1933's midsummer buying spree — when NRA was around the corner everyone wanted to spend his money before prices went up.
For months before the present war began business was not bad—many businesses showed a profit—but there was not enough of it to cheer about:
> During July and August the New York Stock Exchange averaged about 680,000 shares a day (less than half the volume needed to keep Wall Street in the black) and stock prices got nowhere.
> The Steel industry, operating between 50% and 60% of capacity, was overproducing a little, did not know where its next week's business was coming from.
> In the first half retail trade (one of business's best performers) was still down 6% from 1937 and had increased its inventories by 5% since Jan. 1.
> Nearly every major crop was at or close to a record surplus andthe Bureau of Labor Statistics' index of wholesale prices stood at 74.8% (of 1926), the lowest since June 1934.
> The U. S. export balance for July was $60,703,000, down 30% from July 1938.
> The textile industry was curtailing production 25% in order to correct last spring's topheavy inventories.
In the first full week of World War II many of these things changed and all of them took on a new complexion. The New York Stock Exchange averaged 3,995,000 shares a day for four days running, the Dow Jones industrial average rose from 143.99 to 150.04. This week started with a 4,678,640-share day and the average ballooned to 155.12. Although the U. S. exports little cotton goods, textile orders pyramided from public to retailers to wholesalers to fabricators, adding up to 1,000,000,000 yards, the largest single week's business since the end of War I's boom in 1920.