Trembling Top

After two months and 10,000 miles of travel in the U.S., chubby Geoffrey Crowther, editor of London's famed Economist (TIME, Feb. 2), found the U.S. state of mind very different from 1929, when he had made his first visit. Then, wrote Crowther in This Week magazine, "everybody you met . . . was sure that American business had discovered the secret of eternal prosperity. Now the mood is very different. Business is very good, certainly, but in every smoking room you are told the reasons why it can't stay that way."

Crowther thought the situation was best described by a Little Rock (Ark.) newsman who used a term he had learned in wartime radar work: "American business is at a trembling top."* That "wonderfully expressive phrase," said Crowther, exactly describes how the indexes of prices, sales and national income have risen to a top "higher than anybody believed possible, and for months have stayed there . . . just quivering up and down." It also described the "strangely apprehensive mood that I found wherever I went."

Flip a Coin. As puzzled at the end of his tour as at the beginning, Economist Crowther said "almost every piece of evidence can be interpreted either way." He illustrated this bothersome ambivalence with an imaginary debate between a Pessimist and an Optimist. Samples:

Pessimist: A nine-year upward movement is quite without parallel in American economic history. It must be near its end.

Optimist: Maybe this is the longest upward movement ever known. Why shouldn't it be? It has also covered by far the largest war in history. Is it really conceivable that all the damage and dislocation caused by the war could be put right in less than three years from V-E day?

Pessimist: There are signs of a decline in consumer demand already. . . . Several industries are being pushed in the red by higher costs. . . . This sort of thing might easily start a general downward move.

Optimist: It might, but in fact it isn't doing so. The total stream of income payments to individuals is holding up very well.

Pessimist: Look at the Stock Exchange. Set alongside today's prosperity and today's profits, the present prices of ... stocks are just plain silly. If stocks were really cheap, the men who know would bid them up.

Optimist: Businessmen are pessimists only when they are thinking of the Stock Exchange. Ask them about their own business, and most of them will talk in terms of cautious optimism... . .

Not Just Yet. After listening carefully to his own debate, Economist Crowther ventured the "very tentative and timid" conclusion that the curves of prices, production and employment "will not go any higher," will turn down "sooner or later." When? "My reason, based on study of the available facts, says not just yet. My instinct says in 1948."

* On the radar scope, a weak "pip" (signal) can be built up by the gain control to a maximum height, where it reaches a "trembling top."

This file is automatically generated by a robot program, so reader's discretion is required.