Evening star., 1941-01-01
Unprecedented Boom
In 1941 Predicted
By H. n. MoGiN
Uncertainty Over Wars
Outcome Continues
For Coming Year
By III. y. McGILL,
Fditor McGlu COMMONLY SerVlce, Inc.

The paramount question Of the
hour is. What has l94l IN store2"
Among other things, the follow
ing 10 important developments are
strongly in prospect:
~ AlI-time record for industrial
production and consumption in
heavy industries, iron and steel
building, automOtive, etc, Will lead
Earnings will increase IN a broad
manner.
~ Peak levels for employment
and purchasing power directly aid
ING consumer goods industries; new
records for department store sales,
slowly but steadily increasing cost
of production and cost Of living.
80 Readjustment of tax laws
new sources taxed but generally
increasing tax load.
a. Repeal or modification Of the
Johnson Act
80 Sharp increase in the patiOnaI
debt limit, probably to S65OOO-
100000.
C6l Diminishing activity along th'
lines of New Deal economic eXper
mentation.
% Modification of the Neutralty
Act.
(8) Declining trends as regard
public relief and farm aid.
90 Greater cooperation between
business and Government due to the
urgency Of the national defense pro-
/ gram.
QOJ Higher commodity prices.
Uncertainty Persists.
DESPITE the fact that an all-time
/ record peak of industrial activity
( now exists. a state OF uncertainty
and beWilderment prevails which
will not change until the war Is
over. The trouble is that American
industry is on the outside looking
in. which is quite different position
from European countries, which are
on the inside looking out.
How and when the war Will end
/ is a tOssup. At the same time the
conflict is getting so big and ex-
tending over such broad area that
it is likely to collapse at any time
under its own pressure While Il
may be assumed that the genera
situation still has the earmarks OF
a prolonged war, nevertheless, peace
if only on an armed-truce basis
could easily eventuate in l94l. Il
stands to reason that the future OF
= our economy rests in the lap OF the
war gods. and hence uncertainty Is
justified because much depends on
which way the scales balance when
peace is declared.
In this country there Is nothing
that can prevent an unparalleled
era of activity. This will not be 2
natural or healthy boom, but pri-
marilv artificial, rejecting ma
tional emergency.
Vast Program FOreSeen.
At this time it is Of interest n
briefly check up on prospective Gov
ernment spending for national de-
fense over the next half decade. The
total is estimated in the vicinity Of
S35 900 100000. which is double the
amount already appropriated. The
proposed, schedule calls for the ey-
penditure OF seven and a half bill
lion dollars in 1941. nine billion in
1912. seven and a half in l943, six
billion in 1894 and five billion IN
l945 This means that not for four
or five years will Government spend
ing again be as low as it is today
and two years hence national de-
Tense will be the biggest industry III
the United States. At least $780,
100000 will be spent monthly dur
ing the first half of next year and
curing the closing six months the
monthly expenditure will gradually
creep toward the $1,000, 100000 mark.
What these figures mean in terms
of production, consumption, employ
ment, purchasing power. etc, is eX-
tremely difficult TO visualize. How
ever, it does not require a stretch
Of the imagination to assume that
. this colossal foundation under the
business structure will support a
/ prolonged era of outstanding activity
which will be modified only TO a
limited degree in the event of world
peace before the end of 194l. Never
in the history of the world have so
many provocative uncertainties eX-
listed. yet when every phase that
directly or indirectly affects the
business situation is carefully ana
lived and weighed. it is quite appar-
ent that the outlook is anything
but bearish as regards the months
directly ahead
Price Trend Narrow.
. Within a short time the world
war will be a year and a half OLD.
yet during that entire period price
/ fluctuations have held within narrow
boundaries. This is nothing new be-
cause in the case of World War I
prices did not begin to show signs
Of outstanding strength until the
war was year and a half along.
Right here l wish to emphasize the
point that the wild gyrations in
/ commodity markets noted from 1916
through 1920 will not be repeated
during this war era. Control svs-
TENS, both actual and prospective,
are ready to cope with any emer-
gencv. Furthermore. there is an am
pie supply of almost every major
strategic commodity, and in the
/ background an adequate producing
capacity exists. Equally important,
! the war to date has not interfered
with the shipment of commodities
of foreign origin to this country in
volume. In fact, huge reserves are
IN the process of being built up.
A brief checkup reveals that At
/ the opening of the new year COM
modify prices stood per cent be-
low year earlier figures. Is per cent
under the peak of 1887 and 26 per
cent below the average for the year
1926. This comparison clearly indi-
Gates that prices are low and well
Debated, The need for unlimited
production is without precedent.
Gains Are Recorded.
Trends portraying employment,
purchasing power, earnings, depart
ment store sales, cost of production,
-,