Where Do We Go from Here?

In a week that brought almost too many wanted things, U.S. business behaved like a thirsty man suddenly caught in a cloudburst--grateful, but worried too that he would soon have to swim for his life.

The stockmarket, confident of Republican victory, had gone up over 10 points (Dow-Jones industrial averages) in the four days before election. But when victory came, the market fell, the worst drop in two months. Commodity prices fell also. Probable reasons: short-term speculators read G.O.P. talk of a big U.S. budget cut as a deflationary measure, grabbed their profits. They ignored talk of the corollary tax cut, which, by putting more cash in the hands of consumers, would help business all around.

By week's end, as the market was recovering, the lifting of almost all price controls (see NATIONAL AFFAIRS) caused new spasms. Businessmen expected many prices to go up, but which--and when? There were, nevertheless, some definite prospects:

P: Lead, shortest of all metals, would certainly go up in price from the old ceiling of 8 1/4-c- a pound to the world price of 10 1/4-c-. Copper and zinc would follow suit, and these last crippling shortages would probably end as imports poured in. P: No general rise in steel was seen. Some carbon steel products which were being produced at little or no profit would probably go up. Alloy steel (10% of the steel output), on which controls had already been removed with no price effect, would probably stay put or even decline. P: General Motors was the first to raise prices. It boosted car and truck prices an even $100 all around. Ford said he would hold the line. Chrysler Corp., which has started to make money, said nothing. P: Housing costs would soar over ceiling prices all down the line. But black markets and many bottlenecks would be ended and prices of some items--i.e., nails--would drop under black market prices. P: Electrical appliances, such as small motors, would go up slightly, though General Electric's President Charles E. Wilson had "no fear of runaway prices." P: Rents, though still controlled, might be permitted to rise in some places. But not much. OPA's figures showed that landlords, even under full controls, were doing 24.9% better this year than in 1939, thanks to lower maintenance costs. P: Government allocations on rubber and scarce metals would continue.

Actually, barring a new wave of wage increases, most price rises would be cautious. With U.S. production now up to 135% of the 1935-39 rate--and with inventories up accordingly--no manufacturer wanted to price himself out of the market just when it was turning into a .buyer's market in many items.

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