A Fine Tirrie for All

With the greatest of ease, the bull market kept right on charging up last week. The Dow-Jones industrial average climbed 4.34 points in the best week's rise in over a month. At week's end the average hit a lofty 222.41, highest level in more than 19 years. With the tracks cleared by the end of the railroad strike, the rail average also highballed: it rose 1.40 to 56.96, its best showing in 18 months. The utility average registered an 18-year high at 44.26.

It was a fine week for Wall Street, and even Congress seemed in a mood to do its bit. The House Ways & Means Committee voted for a change in the capital gains tax. If Congress approves, stocks and other assets need be held only three months, instead of the present six, to have profits from their sale taxable as a long-term capital gain, instead of as regular income. The committee also voted to cut the tax on such profits from 25% to 16%.

The stock market was also cheered by the increasing optimism of U.S. industry. For example, General Motors Corp., which had been expecting a drop in auto sales this summer, now plans to boost its record output by almost 20%. Said Chairman Alfred P. Sloan Jr. at last week's annual meeting of stockholders*: "Out of an estimated 34 million passenger cars now in operation, about n million or nearly one-third of the total, are ten years old or older." Most of these cars must be replaced over the next few years, said Sloan, and G.M., which has spent $1 billion on expansion since war's end, plans to spend another $100 million on tools & dies for its new models.

Prospects for all of industry looked just as rosy to Department of Commerce Economist M. Joseph Meehan. Meehan told the Conference for Purchasing Agents at Kansas City that "physical volume of production [is] practically back to the previous high" of 1948. At $264 billion, the dollar value of the gross national product is barely 2% below the alltime 1948 high, said he, and since prices are lower today, unit production is about equal to the postwar peak. Added Meehan: "Business activity is now rising."

* When a stockholder suggested that G.M. send its executives around the U.S. for regional stockholders' meetings, Sloan retorted: "I rebel at having President Wilson and other officials travel around the country [when they are under such heavy pressure . . . I would rather have them play golf."

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