The Waterbury Democrat., 1939-02-21

cry movement the building indus- try will contribute very materially te business betterment. Residential building appears to Do headed for one of its best years in Q decade, Railroad buying, because of improv- Ing income, will Do better during the year.
 "The automobile industry should register e 25 per cent increase in sales volume over last year. Farm income can be expected to increase slightly although crops this year may not equal 1888. The inventory sit. uation Is favorable. And credit will be abundantly available for all leglt- mate needs.
 Durable Goods Field Better
 "rhe impasse between government and the utilities draws slowly closer to c solution. This industry will be ready for broad expansion pro- gram whenever tn epolitieal atmos- phere Is substantially clear. There Is reason to believe the clearing program Is under way.
 "Continued government spending will aid the consumers goods lines and rearmament, here and broad, will exert It's influence on the heavy goods industry. On the whole, how ever, it is not expected, by most students of tho business outlook, that the durable goods industries will really move forward in pace with the needs of the field.
 ITO some degree, the improve. ment Is anticipated partly because of the ifnpossibility of further de. ferment of certain needs replace- mentS by industry in general, With e sound foundation to tho whole re. eovefy structure tho durable goods industry would easily sustain c rea- sonable business prosperity for some years.
 But there is no such foundation at present and in the opinion Of conservative business men and in. vsstors, will not Do SO long as the cost of government whether no. tional, state or local, continues to grow unabated.
 Confidence Is Lacking
 "some of the adherents of the 90. called new school of economics" seoff ct the statement that lack Of confidence can Do 70 decisive c faes tor in the heavy goods lines. But after c eyelieal downturn in bust. ness, economic recovery Is quite evi. dently dependent on government economy rather than expenditure. The record since 1929, with It's uii. broken series Of federal deficits, SO testifies. And, in contrast, consider the quick recovery that occurred in 1921 whom government economy waf brought Into action against . bust. ness slump.
 "The truth Is that firms do not program new undertakings, men dc not invest in long-terin obligations when deficits show no sign Of pass. ing. fnquidity b the keynote. But tho capitaiIstie system needs the solid meat of investment; . liquid diet prolonged undermines It's basit vitality, jeopardises It's possibilitiel of quick recovery.
 "The spectre of inhation, the threat of added taxation develop feeling that sound earnings will mol be continued. And 1t is earnings real or prespective-that stimulate new ventures and the attendant in' vestment.
 "dovernment expenditures have not performed the task and obvious. ly cannot. For every dollar Of re- duced government spending (withif certain minimum outlays which I Is agreed are essentiaD there can b. attracted to the durable goods in. dustry, several dollars of private capital. For every decrease in gov. ernment personnel (within the mini. mum needed for essential admins. tration) there will be opened uI many more jobs in private indus try"