Boom Into What?

To fulfill its world role, the U.S. has to maintain a high level of business stability and prosperity at home. Despite some year-end talk of a late 1953 recession, most businessmen are bullish. Said one of the South's foremost bankers, Chairman John A. Sibley of Atlanta's Trust Co. of Georgia: "Businessmen have more confidence in the future than they have had in a generation. They will be willing to take more risks with the possibility of earning better returns." Arms-spending is still on the rise, and when it reaches its peak in 1953, it will level off and continue at a rate of $53 billion a year till mid-1955. Buying power will also increase; recent wage boosts will add an estimated $7 billion to 1953's in come. And the U.S. consumer has a record $283 billion of accumulated savings avail able for deferred purchases.

Moreover, the surge of optimism after Eisenhower's victory has caused business men to raise the sights on their own ex pansion. In 1952 industry spent $28 billion, an alltime high, on plant expansion.

In the first quarter of 1953, even bigger spending is expected, and there is every indication that the full year total will be higher than 1952. The quick write-off pro gram set off so much new construction that many businessmen think Eisenhower should make it a permanent policy to keep the U.S. improving its efficiency.

The demand for goods is still big. Automen expect to produce at least 5,250.000 cars, third biggest output on record. TV makers expect to make 6,000,000 sets --and think at least 50 new stations may be built this year. New industries, like airconditioning, plastics and synthetic fibers, are just in their infancy.

More appliances of all kinds will be needed. Says Westinghouse's Gwilym Price : "We think 1953 should be a year of con tinued high production in the appliance business. We expect the consumer to buy at the highest rate in history." In 1953 the long-heralded age of atomic power will dawn. Westinghouse will start operating the land-based prototype of the reactor it is building to power the sub marine Nautilus. Since the reactor could also be used to run a commercial power plant, the National Security Resources Board urged the Atomic Energy Commission to let U.S. industry apply its own huge resources to speeding up the peacetime uses'of atomic power. At year's end, AEChairman Gordon Dean promised quick action on changes in the law "necessary if private industry is to be permitted to construct and operate reactors." Moreover, Dean predicted that 1953 would see AEC itself design small, relatively cheap (perhaps $5,000,000) atomic "package" plants to generate power in remote areas where normal power sources are costly.

Industry itself (notably Detroit Edison, Dow Chemical, Monsanto Chemical) has already worked out many of the research bugs in adapting an atomic pile to commercial power. Says Detroit Edison's President Walker Cisler: "We hope to have [a commercial plant] operating perhaps in the next five years." The Chips Are Down But there will be one notable difference in U.S. business in 1953. There will be so much civilian production that businessmen will have to tax their ingenuity to improve their products and sell them.

Some industries will probably have their own recession, or "readjustment," just as the textile industry had a recession in booming 1952. There will be price cuts, and some have already begun. In its first 1953 catalog, Sears, Roebuck & Co. trimmed its prices an average of 9%. Said G.E.'s President Ralph Cordiner: "The chips are down. This year the weak sisters will fall by the way." Businessmen generally feel that 1953 will be a "hard sell year," notably in such items as refrigerators, radios and farm equipment, which show signs of saturating the market. To keep up sales, International Harvester's President John McCaffery had a salesman's remedy. Said he: "We've got to develop better equipment to make them want to replace the old ones. Planned obsolescence is the lifeblood of U.S. business." Boom Into Normal U.S. business knows that it has no sure way to eliminate future recessions. It has no reason to assume that "boom" had become synonymous with "normal," even though millions of Americans now regard it as such. After ten years of rising incomes, younger couples have come to look on new homes, new cars, mechanized kitchens, plentiful jobs and good pay as virtually everyone's guarantee in the new U.S. economy. Future shakeouts may temporarily jolt that confidence, yet it is based on a lot of solid fact.

In a society where productivity is rising and income with it, where built-in safeguards protect the economy from severe blows, U.S. industry has good reason to believe that its markets will continue to grow with the nation. After the arms program tapers off, there is plenty work to be done rebuilding the nation's outgrown schools, its worn-out highways, and building all manner of projects to supply the growing population's needs.

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