BUSINESS
PROCESS INDUSTRIES' OUTLOOK G e n e r a l Electric chairman sees long-term eco nomic trend u p w a r d , with only minor recessions . . . Official presidential adviser suggests control of booms T j AMBUNCTIOUS AMBUNCTIOUS international political upheavals have been occupying more attention of late than industrial and busi ness problems. Queer happenings in Ko rea surrounding the big military drive of the Chinese Communists in the midst of the truce negotiations and the extremely independent action on the part of Presi dent Rhee of South Korea cause knitted brows among those who try to guide the destiny of the United States and United Nations. The rebellion in East Berlin against the Soviets is another political upheaval, though fortunately not the problem of the United Nations countries. In short, the world continues in a fer ment and it becomes more evident to busi ness and industry that it must learn to live well in unsettled times. The unusual proves to be the usual. Perhaps the leading thought of the week —and on the optimistic side—is that our economy is in a long-term upward trend, despite inherent economic fluctuations, a message which was uttered recently by Philip D. Reed, chairman, General Elec tric Co. He acknowledged the possibility of a slight recession in the near future but based his optimism on five points. Factors in the Good Outlook Inflationary pressures have all but dis appeared, said Mr. Reed. New and con stant production facilities are being brought into operation constantly. Indi vidual savings are growing at an abnor mally high rate. If the percentage of per sonal income after taxes spent on con sumers goods was increased to the aver age of 1929, 1939, and 1940, annual de mand for consumer goods would increase by nearly $7 billion yearly. Research, coupled with intensive selling efforts, pro vides reason to believe that the percentage of consumer spending will increase. Finally, the improved political environ ment for the private enterprise system and the prospect of lower corporate and per sonal tax rates are constructive, concluded Mr. Reed. Contributing to economic thought is the premise that "unsound booms" should be controlled and guarded against as well as depressions. The sponsor is Arthur F. Burns, recently appointed economic ad viser to President Eisenhower. He pointed out that strong defenses against depression already exist and the need of action to prevent unwarranted booms is corollary to the need of action against depressions. Turning to the topic of tariffs, some economists have noted a growing senti ment in favor of lower tariffs. Theodore 2722
H. Silbert, president, Standard Factors Corp., stated recently that there has been a marked shift of opinion in two years in favor of lower duties, according to a sur vey. Among the reasons for the shift are the realization t h a t the United States, now the greatest creditor nation and the great
est market, must be available for trie world to sell in. Again, the European and Japanese economies must be meshed with the Ameri can economy so that trade with Ru-ssia and the satellite nations does not "seem so important" to them. "Keeping up with the Joneses" is often an ambition in life, even though perhaps a false one. The top accompanying graph reveals how sales of chemicals and allied products shape u p alongside all manu facturing. That the two jagged lines run quite parallel is no surprise in view of the fact that chemicals penetrate mosrt major lines of manufacturing. During the three months ended with April, at least, there has been an unbroken
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