The Waterbury Democrat., 1941-08-11
SMALL FIRMS GET RIG BUSINESS

III the uTSC p1aCG, LLlelS Is ScIAco of big orders for military radio sets field portables. aircraft communi- cation, special sets for the Navy and its increased auxiliaries. That looks good as boost for the industry, but this is a specialized job and it goes to the companies with manu- featuring experience in the short wvae police, aircraft and marine fields. What this business amounts outside it is $75 million and most of it goes to smaller firms who have not been in the home radio field. The industry therefore expands to, take care of this new production.
 Then along come priorities, with shortages of all the metals radio sets use-copper for wire, brass and aluminium for parts. Instead of the 33O,000 pounds of aluminium which the radio industry has been using every month it is told it can have only 10000 pounds month. That's a 66 2-3 per cent cut right thefe, and no promises are made for next year when the allowance may be cut to say 10000 pounds a month, a 78 per cent cut.
 If the industry were to take that without protest, it would mean that instead of making 12 million sets a year, they would make only two to four million sets. The manufactur- CTS would all have to suffer propor- tionately, reducing their production to such an extent that two-thirdS of htem would probably have to shut up shop, or else the number of manufacturers would have to be re- duced from 300 to between 70 and 100.
 The industry doesn't take this beating without struggle. The Ra- dio Manufacturers Association ap- points material bureau to conserve strategic supplies and to find sub- stitutes. It is found, for instance, that an alloy of half-steel, half aluminium is just as good for var fable condenserS as is pure alum mum. That helps, but then these alloys become strategic materials. The problem is to find substitutes for substitutes.
 DEALERS DEALT OUT?
 What happens to the 5000 radio dealers in this situation is another chapter to the story. They either live on 20 to 30 per cent of their former income, or from 70 to 30 per cent of them go out of business. There is plenty of worry in Wash ington about the lost productive ca- pacity, unemployment, the need for retraining of labor So far, nobody has expressed much concern over what happens to the retail dealers, whether it's radio or hardware or household appliances they sell. Car rying their woes a little further, they must reduce their advertising, and the newspapers take a sock.
 On top of this worry and woe, pile the new tax bill which proposes l to raise manufacturers excise tax from 51a to 10 per cent. That means a AZ per cent increase in the mak- CTS costs, and it will be all moved on to the purchaser. Incidentally, the treasury estimates that this particular tax increase will yield an additional $49 million are open 10 question. If the production of sets and parts for the next year is cat two-thirds, the value of products even at hte retail level would be only $50 million. And 10 per , cent tax on that would yield $15 million instead of the $21 million which the treasury expected.
 All this comes just at time when radio was getting readyito go places. In addition to the rise in popularity of the combination radio-phono- graph, the new frequency modula- tion is here. And televiSion is just around the corner.
 The sad case is presented here not ss beef against the defense effort, but it points up the degree. of sac- rifice, readjustment and hard times which not only radio, but hundreds of industries are going to have to face.