Evening star., 1941-07-06
Business Faces
Hard Problem
In Future Plans
Change to Wartime
Economy Disrupts
All of Old Guides
By FRANK M'MILLEN.

NEW YORK, July 5.-Thls Will
be the most difficult autumn and
winter to plan for in the history of
American business, most analysts
agreed today.
Enormous numbers of compli-
Gated and delicate decisions must
be made now to keep the machinery
of industry rolling at peak level in
the next six or eight months when
the arms drive will be approach
ing its peak and pay envelopes will
be bulglng with the greatest con-
sumner spending power on record.
Even the measuring instruments
which business men use as the basis
for Observation-Disclosures activity
indexes, security and commodity
price averages-have been set askeW
by the sWift-paced changeover of
the Nations economy from peace
time to war-dominated basis.
Shift of Activity.
Measurement is complicated by
the shift of activity to new lines,
such as aircraft and shipbuilding,
which are reflected in the common
indexes like that of the Federal Re
serve Board or the Associated Press
only indirectly through their infu-
ence on steel production, freight
movement and electric power out
put.
A common guess among statisti-
clans here is that the Federal Re
serve Board index OF industrial ac-
tivity, now about 153, will rise to
about 100, or about AZ per cent. ty
the year end. (For Associated Press
index, the corresponding rise would
be from the present record high CT
1902 to new top of about 147j
But, in making guesses of thi-
sort, business planners say, the
number Of Ifs" is staggering.
These are typical:
One economist thinks there ha
been a great rush of advance buyin,
by the average citizen because h,
fears he may not be able to bu-
things he needs later this year. {
would be able to get them on
after delays and at higher priC.
See Let-Down in Activity.
Therefore, this expert says the
may be a considerable let-doWn i
general activity later because TIT
average mans needs for many COM
mon articles, such as automobiles
vacuum cleaners, washing machine
and the like, already have been met.
He cited the case of a vacuum
cleaner concern whose sales in the
flrSt half of this year were up 40
per cent from the same period last
| year.
Others, however. who have OBJ
served the same phenomenal sale,
hgures cropping up in consume.
items think 1t is best explained
simply by growing pay rolls anC
consequent better family incomes.
lhey theorlze that the ayerap2
man with job and a family has
more or less stable rock bottom min
lmum OF expense and that whe.
hlgher wages or a longer workin
week add to his income his spendin,
power "SlopS over into things like (;
new car, washing machine for til
mlSSus and few quarts of beer 70
the week end. That, these analysl
say, IS what is going on now all,
they expect 1t to continue as en-
ployment and pay rolls grow.
Amusement Industries.
1t may be significant that the
head of one of the largest investins
companies in the country thinks
you should watch the amusement
industries" This man said that if
his personal affairs permitted-he is
deyotlng his time to a defense Job
he would be looking around for spots
Tor restaurants and dance pavilion
as one Of the likehest ways to EN-
ploy money at time like this.
Another of the Ifs" in busine.
calculations is the proposed shar
cultailment of automobile output
defense needs soak up skilled Iabc
and materials.
Businessmen point out one of Il
most natural outlets for the avera.
American with extra money in h
pocket is new car. If he isn't al-
to get it a few months from nov.
where will his money go?
Retail Price Puzzle.
These are some of the tentat
answers of the bigwigs trying
guess next winters prospects:
Movies, sports, liquor, more al.
better clothing, better grades of foe
and the addition of luxury items
the table, cosmetics and beauty par
lor service, jewelry, especially of t.
costume variety: travel, education
and gambling.
Biggest question mark of all, mos
business observers think, is thc
course of prices in retail stores.
Raw material prices. it is pointed
out, have been relatively easv f.
control, though even these have pre-
sented serious headaches to Leon
Henderson, price czar, and threaten
more trouble later.
But, it is pointed out, the raw ma
terial prices of today are the retail
prices of tomorrow. When recent
rises in materials are translated into
prices on retail store shelves, these
men say, then "the fun will begin"