Warning Light

Taking a look at the high tide of the nation's business boom, Presidential Economic Adviser Arthur Burns last week judged that it was time to sound a note of warning. Though the U.S. is in glowing financial health, he told a conference of economists at Pennsylvania State University, "it is important to prevent the confidence that generates prosperity from passing into the overconfidence that generates speculative booms . . ."

Economist Burns served notice that the Eisenhower Administration is ready to curb credit in housing, the stock market or automobiles to nip any speculative boom. Burns also tossed off a veiled hint that the prospect of tax cuts next year depends on a sharp cut in Government spending. Said he: "Balancing the budget is imperative in a time of high prosperity." Signs of high prosperity seemed to be everywhere last week:

P: Automakers rolled out their 4,000,000th automobile, the first time in history that so many cars had been produced so early in the year. Even though wildcat walkouts at Cadillac and at some Chevrolet plants trimmed G.M. production 12%, most assembly lines were back to normal.

P: Retail trade over the nation ranged from 2% to 6% ahead of the comparable week last year.

P: The stock market moved up, dipped for a day, then gained back its ground and kept climbing. At week's end the Dow-Jones industrial average closed at 444.08, up 6.36 points above the previous week, to a new alltime record.

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