Evening star., 1941-01-01
Climb in Production
OF 10Per Cent in 1941
Predicted by Editor
Preparedness and Aid
To Britain Are Seen
Dominating Business
BY STANLEY y. SHAW,
Editor Stand ard Statistics CO.

The national scramble TO create
vast war machine and concur
rently to extend all possible aid to
Great Britain will dominate the
1941 business pattern. At worst.
the aggregate industrial output of
the coming year will equal that OF
1910, while the more probable esti-
mate calls for at least 10 per cent
overall gain in production volumes.
In many respects we are not yet
out of the planning stage Of the
munitions boom. While the Gov
ernment has placed orders for some
10 billion dollars of war material
and supplies, the immediate effort
is still centered largely on plant
construction and expansion, on the
task of obtaining additional ma
, Chinery, and on the recruiting and
training Of adequate forces Of skilled
labor
Until the plant programs which
are now under way are completed
and in operation there can be no
significant increase in industrial
volumes beyond the levels attained
this fall. Indeed, the chances favor
at least a moderate letdown in the
late winter and early spring. Labor
troubles are already developing in
some plants and actual shortage Of
skilled workers will handicap oper-
ations in others.
MANY Technical Problems.
Unless priorities are promptly es-
! tablished there will also be cases Of
/ delayed raw material and semi
/ finished parts deliveries. The
/ changeoVer from peace time oper-
ations to specialized munitions pro-
duction will inevitably involve tech
nical problems Of one type or an
other, further handicapping the
attainment Of full production
schedules.
Allowing, however, for an inter-
regnum Of several months as indi-
vidual plants encounter and gradu-
ally overcome these anticipated
special problems the indications are
for a slowly rising volume of actual
defense production in the latter
months of the coming year. This
uptrend in the defense industries
will probably be in some degree off,
set by curtailment in certain peace
time activities, such as automobile
production, so that only a moderate
gain in the composite levels as COM
pared with recent peaks will be
witnessed even in the final months
of 194l.
Actual regimentation Of industry
along European lines does not appear
in prospect even though this coun-
try should be drawn into direct par
ticipation in the war. Nevertheless,
taxes will be further increased, wage
rates will rise and il will be diff
cult to draw a line between price
increases which are legitimate and
those which are unWarranted.
Higher Prices Forecast.
There is little question that the
prospective increase in demand for
both capital and consumers goods
and the rise in wage and tax rates
will lead TO generally advancing
price levels While industry itself
is anxious to avoid an infationary
price rise. some advances are neces-
sary to maintain the balance be-
tween raw materials and finished
products, and between wholesale
and retail levels.
The increase in industrial produc-
ton forecast for 1941 will not mean
the same increase in corporate earn
ings as would a similar rise in busi-
ness volumes in normal times Busl-
ness will be good, but after the tax
gatherer and the emplove have
taken their cuts. the stockholders
will be lucky to have as much left
for him in 1941 as in 1910.