Brighter Outlook?

What is the outlook for business? Last week, after a long silence from the prophets of recession, the air was once more stirred by predictions.

Said General Motors' Alfred P. Sloan Jr.: "I haven't any feeling at all that we are going to have a serious recession in this country. I don't see how that can be possible. . . . You can't have an industrial depression when the capital goods industries are busy." The only thing to worry about, he thought, was "a minor recession, perhaps, involving certain adjustments in prices and production where they are out of line."

General Electric's Charles E. Wilson was inclined to feel the same way. There was no economic mandate, said he, for a bust to follow the current boom. "The reasons which underlie our inflation seem to have been more solid than we anticipated. ... It is difficult not to reach the conclusion, in the face of continued buying at high prices, that these prices are more strongly based, and the whole price structure less vulnerable, than was the case in 1920."

But the New York Credit Men's Association disagreed. From some 500 replies it received in a poll of its wholesale and manufacturing members, the association last week found that 80% of them expected a recession to start in the second quarter of next year. Among their reasons for fearing a slump were high prices, excessive inventories, buyer resistance, lack of capital, and labor unrest. And the number of bad accounts was increasing rapidly.

Those who backed their expectations with money in Wall Street were more inclined to go along with Sloan. The stock-market perked up last week after more than two months of listless decline. The volume of trading passed a million shares in two sessions v. only one million-share session in September. Moreover, prices edged up in all of the sessions, boosting the Dow-Jones industrial average up 3.59 for the week to 179.44. The week's activity was still too mild to confirm any trend. But traders were more cheerful than they had been in weeks.

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