The Mutter of the Bears

In a week when two great strikes were settled, an uneasy thought beset U.S. businessmen. Under the bullish rumble could be heard a bearish mutter. Deflation might not be too far away.

True, Washington economists still worried about inflation. Gloomily they counted up the losses through strikes of more than 98.6 million man-days of work and a minimum $3.1 billion goods. They thought how badly that would affect the breathless race between production and demand. Industry's pipelines were sucked out. The 45-day coal strike was a blow at production's source from which it would take industry many months to recover. The smooth and efficient exchanges of goods and services had all but vanished.

They watched Chester Bowies' price line buckle again as Bowles reluctantly granted price increases in milk, butter and cheese which he estimated would cost the public an annual $250 million. They listened as U.A.W.'s Chrysler workers, who had won an 18 1/2-c- wage boost in January, served notice of another wage demand. The Washington economists, who had hoped they could prevent a boom & bust, saw the spiral still spiraling upwards.

But in Chicago a convention of the Na tional Association of Purchasing Agents studied signs of a different color. Said Roy Haberkern, vice president of R. J. Reynolds Tobacco Co.: "We are told that within six months after the mills get into full operation steel backlogs will be wiped out and a highly competitive market will develop."

Skeptically he looked at a ballyhooed consumer demand. "In this frenzied buying orgy now going on, thousands of consumers are duplicating orders." Inflated demand will collapse when goods start flowing. He saw a more immediate threat to inflated markets: "Increased prices will provoke buyers' strikes."

Purchasing agents listened with the same anxiety with which Washington watched the momentary upcurve of wages and prices. Businessmen guess that the U.S. consumer is already fed up with high prices and poor quality. From California came hints of a buyers' strike in real estate. A Los Angeles dealer reported that his volume had "fallen off 75% in the last 60 days." On the heels of the labor strikes, which had helped push prices up by raising wages and curtailing production, a general buyers' strike might well be in the making. A short one might be a good thing. A long one would end all Washington's worries about the boom. In that case, Washington could concentrate on the bust.

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