Evening star., 1940-07-01
Trade Leaders Fear
World Situation
In Second Half
Home Outlook Helps
To Offset Threats
From Abroad
BY PAUL ID. GESNER,
Associated Press Business Writer.

Associated Press Business Writer.
NEW YORK, July with the
first six months of this momentous
year of 1910 behind them, business
leaders and f1nanciers looked ahead
today to the second half with hope
and confidence over the outlook at
home, but definitely fearful and dis
trustful of the world situation.
THE stage is all set here at home
for a rapid and sustained expan-
sion of business in virtually all its
phases" a prominent industrialist
said in commenting on the prospects
for the last half of 1910. while
the European war naturally is a
consideration in planning for the
next six months. the domestic econ
omy alone could sustain high level
of activity if left to work out its
own destiny without sudden shocks
from abroad
But therein lies the element of
uncertainty which could, conceiv-
ably, disturb the whole structure
and set in motion a train of events
that would leave its mark on every
phase of American life. Specifically
what is to be feared most is that
war orders might induce plant ex-
pansion beyond the ability of the
purely domestic economy to support
it, and then peace of some sort
might come to Europe.
Forecast Impossible.
''If that happens all that we could
reasonably look forward to from our
own standpoint will be knocked into
a cooked hat. Your guess is as good
as mine what the final outcome
will be-"
These sentiments were echoed
more or less by many executives in
fields ranging from cosmetics to iron
and steel. Indeed, some of them
went much farther in hedging their
remarks about the future with "ifs"
and butts" and others confessed
forthrightly that the situation was
so fraught with intangibles that
most of their thinking was pure
guess work.
In predicting the home economy
was in such shape that it alone
could make substantial progress,
executives had solid foundation to
stand upon. Every one of the major
indices of activity compiled in a mid
year survey by the Associated Press
showed healthy increases over year
ago except new financing. The minor
drop in the latter-to $191 ,000,0 900
in the first six months of 1910 from
S212,617,000 in 1939-was attributed
to varying causes, but the one most
frequently heard, other than the
disturbance of markets due to the
war, was that many large corpora
tions had enough money in their
own tills to finance to a great degree
their ventures and needs and didn't
have to go to underwriters and the
public to ask for more. This state
of affairs is something of an
economic anamoly in that it has long
been held in orthodox financial cir
cles that If you are to have any real
progress in expanding industrial
activity 1t must be preceded by
activity in the new capital markets.
Substantial Gains Cited.
Among the important indices
showing substantial improvement in
the first half over a year ago were:
Electric power output, 64,014 100000
kilowatt hours, against 57,824,000000;
steel production, 28-900,000 TONS
compared with 20959,000; automo-
bile production, 2,540 900 cars, versus
2,055,7O0, and home building con-
tracts, s700000,000, against S644,-
527 1000.
The one important thing to be
reckoned with in calculating the
probable trend of business in the
latter half of 1910, analysts agree,
is the domestic rearmament pro-
gram. This ros grown to Gar
gantuan proportions in the short
space of six weeks and promises to
grow bigger and bigger with every
setback of the Allies in Europe If
Hitler should win the war, there
are many economists who say they
believe our defense program would
Immediately Jump to proportions
hitherto undreamed of.
But most of this program is yet on
paper only and a lot of it is not
even on paper. 1t takes time for the
placement of an order for 100000
tons of steel, for instance, to show
up in production statistics, factory
pay rolls and the other segments of
the industrial machine. Those who
look for a further immediate jump
In the pulse of the Nations business
activity as direct result of the re-
armament program are being pre-
mature, most analysts say, although
they are in unison in predicting that
once this gigantic task gets under
way on a broad scale you are likely
to see fireworks and it won't be in
celebrating the Fourth of July.