Business: Not War

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Five years ago smart, eccentric Irving Salomon, president of Michigan City, Ind.'s Royal Metal Manufacturing Co., looked at his annual business (manufacturing chrome-plated metal tubular furniture) and found it about right: $100,000 profit on $1,500,000 gross. He decided to hold it right there, to take no business over that amount, never to be lured into the risks and discomforts of expansion. Through Depression II there were no layoffs at his $580,000 plant. And every year since 1934 Royal's net has just topped $100,000.

Only once did he break his quota, in 1937 when rising prices forced him to hike it $200,000 to keep his unit production constant. Even so, he turned down at least $150,000 worth of business that year. But never has he turned down so much business as lately—$300,000 worth in one month—for something has happened to the furniture industry.

Not yet have France and Britain begun buying bedroom suites for the Maginot Line. The something which has happened to the furniture industry is not war. The something is that 1939 began with subnormal inventories and an incipient home building boom. Last spring, with builders turning out nearly twice as many new homes as in 1938, furniture makers prepared for a rise. This fall, in spite of World War II, it blew in.

Up 28% over August were September orders. Better yet, for the first time in ten years October bookings equaled September's, topped 1938 by 25%, put the ten-month average 21% over last year. By month's end unfilled orders were 51% above 1938.

But in spite of their boom, furniture manufacturers were not cheery. They believed that retailers were stocking up faster than the public was buying. They feared that raw material prices would rise, boosting prices and nipping the industry's little boomlet. They gloomed that if World War II brings increased construction costs, new home building will suffer. All the same, 1939 household furniture sales should exceed $400,000,000 for the first time since 1937 ($472,000,000).