Bloom on the Boom

The first third-quarter earnings came out from U.S. business last week, and put another rosy bloom on the boom.

With telephone service in the greatest demand since World War II, giant American Telephone and Telegraph and its subsidiaries reported record sales of $1.3 billion, earnings of $169 million for its third quarter of 1955, both well above 1954. International Business Machines Corp. announced alltime high earnings of $38 million for the first three quarters of the year, up 14.5% over last year. R. H. Macy & Co. posted still a third record: the highest volume in history for fiscal 1955, with sales of $376 million and earnings of $5,600,000.

As for steel, 1955 is likely to be a record year, with steelmen predicting 115 million tons, some 3,500,000 tons above the previous 1953 peak. Reported Republic Steel: a nine-month profit of $63 million on sales of $872 million, with enough orders on hand to keep production rolling at capacity through the first half of 1956.

Overall, U.S. business could hardly have been better, both in primary and consumer fields. Copper and aluminum sales were at new highs, with aluminum breaking one record in August with a monthly production of 267 million lbs., another record with a third-quarter total of 793 million lbs. For U.S. department stores, sales last week topped 1954 by 6%, while chain and mail-order sales were almost 13% ahead of last year. On a nationwide basis, the Securities & Exchange Commission reported that both sales and profits in the second quarter reached new peaks. Sales were an even $70 billion, some $2 billion more than the 1953 record, while net profits hit some $3.9 billion, nearly $200 million better than 1950's record.

Looking ahead, many a company saw a race to keep up with expanding markets. Commonwealth Edison Co. announced a five-year $600 million construction program. Hercules Powder planned a $10 million plant at Parlin, N.J., to be completed next year, for production of a new type of polyethylene; this will be the company's first move into plastics production. But money for expansion was getting more expensive. For the second time in three months, Manhattan's big banks boosted interest rates on prime business loans, from 3 1/4% to 3 1/2%, the highest rate in 25 years. Few bankers thought the rate increase would seriously discourage business borrowing, but most thought that it would lead to a tighter money market all around, especially on consumer loans.

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