Evening star., 1941-10-12
.Somber Outlook
For Business
Discounted
Magazine Sees Danger
Of Overstressing
Adverse Factors
Special Dispatch to The Star.


NEW YORK, Oct. 1l.-During the
next few months the tenor of busi-
ness and political news is apt to be
discouraging, says Business Week in
its analysis of the business outlook
today. On the surface, it is stated,
things will look bad. Labor troubles,
priorities unemployment, ghost
towns. increased shortages of critical
materials, wider use of ALLEGATIONS,
Standardization of consumer prod
ucts, and probably several more
Sinkings of American ships will
make headlines. Under such load,
business sentiment will have hard
time holding up.
Furthermore, the German attack
on Russia is bound to increase do
meStic uneasiness about the outcome
of the war. Indeed, on Tuesday,
Just after the first cable reports
reached the United States of the
gigantic Nazi drive toward Moscow,
the stock market sold off sharply.
Wall Street feared that at last the
Germans might break through and
wind up the Russian campaign blitz-
krieg fashion.
A German cleanup in Russia
would certainly aggravate the task
ahead for this country and Great
Britain. 1t would mean, specifically,
that German troops would be freed
to guard against invasion; and with
German forces massed on the coast
line and along the Spanish and
Turkish borders, bridgehead could
only be won at tremendous cost.
Supplies To Be Speeded.
The British-American counter
strategy is to keep the Russian Army
a going concern. To that end, sup
plies will be sent as speedily as pos
sible by way of Iran and Vladivostok.
In this, shipping is the major prob
lem, rather than production. For
even after the long sea hauls-
around Africa or across the Pacific
the supplies must then be unloaded
and reloaded for difficult railroad
runs. This. the rapidIty with which
( this country moves supplies to Rus
sia is likely to be decisive for the
near-tern course of the war.
Over the longer-term, however,
American plans are still TO produce
an overwhelming array Of arma-
ments, get them overseas, using the
British Isles as a base, and in that
manner overpoWer the Germans
either by a show Of strength or by
actually forcing a bridgehead. 1t is
this pressure on domestic industry
TO produce armaments at full speed
that will make the business news
seem bad in the coming months.
Government controls over industrial
operations are bound to become
more intensive.
There is danger. however, IL over
drawing the Somber side Of the near
term outlook Remember, that the
+ present war is not directly compar-
able with the first World War. Then,
/ after 1915, production in the United
States reached a plateau and stayed
there. But this time, after two
years of war, production is expand
ing, and we are still building new
/ plant capacity.
Effects Can Be Exaggerated.
| AS stated by Business Week last
week, the defense effort has at
tanned q momentum and an inde-
pendence all its own, regardless Of
the developments in the Russian
/ German struggle. And though con-
sumer durable goods industries will
be forced to curtail or shut down,
/ the effects on business as a whole
can easily be exaggerated.
/ Consider these facts: Total esti-
mated Unemployment in the auto
industry is estimated at 100000 over
the rest of the year; but in August
industrial employment in the coun-
try increased 261,0OO; and the month
before that, $4,000. The rise in en-
/ ployment generally will help offset
part, If not all, OF the disemploy-
ment in consumer durable-goods
| plants.
So, all in all, the underlying tone
OF business is much better than the
headline news makes it seem. This
week, Tor example. steel attained the
highest tonnage on record, and ex-
pansion In such key defense lines IS
ships, airplanes, tanks and guns
reached new high levels, colateroal-
ancing modest declines in heavy
consumer-goods, such as autos, re-
/ frlgerators, etc Therefore, If the
stock market breaks and things look
black. remember defense is still oriv.
ing the economy-onward and up
/ ward.