The Wilmington morning star., 1941-02-28
Production Boom Is Held
Inevitable During 1911

will still be an unemployment
problem which the Federal gov
ernment cannot ignore.
The course of American business
in l941 is obviously shaped by the
war abroad and the gigantic ar
mament drive at home. Only one
development, however, and that
one inconceivably remote, would
cause a major alteration in the
course now set. A complete Brit
ish victory in 1941, British
dictated peace, and the iquida-
ton of the Nazi government might
bring the defense drive to a halt
and throw an entirely new set of
factors into the American business
situation.
No Reversal of Trends
Should Britain fall in 1941, the
American economy would be af-
fected in many ways and Ameri-
can business might have to redraft
many of its policies and practices
to meet the unpredictables of the
future. But the instant effect could
be to intensity the defense program
to an "all OUT degree. 1t could
hardly interrupt for an instant the
accelerating pace Of American pro-
duction machinery.
Even if the United States became
directly involved in war, it is un-
likely that the quick result would
be drastic re-shuffling of the
elements outlined. Taxes would
bite further into the national in.
come and some consumer buying
might be curtailed. Priorities and
price controls would be made &C
tual. But the rise in production, il
employment, and in payrolls woulc
not be reversed under any early
war stage conditions that can be
foreseen.
In the calendar year 1941 the
government will make actual casi
payments for defense of b ou
seven and half ! illions of dol
lars. The rate in the last 81,
months will be higher, for cash ex
penditure of ten billions is the es
innate for the governments 1941
1912 fiscal year beginning July l
10 Billions for Munitions
The British government is be
lleved to have somethin~ over tW,
billion dollars worth of material OF
order here and British and Ca
madam purchases of machines ant
munitions in 1941 will be only linn
tied by the ability of American
producers to make commitments
1t seems safe to say, therefore
that within the next twelve month
at least ten billion dollars will g
to American industry above ant
beyond regular civil expenditure
which. in turn. will be stimulate,
nightly by this surge of additiona
money through the veins and vein
lets of business.
Business men. large and small
are almost too aware that all thi
present and prospective activity
rests on no sound basis. T h i
fears of the climax are, in som,
cases, acting as a brake on the
national defense program by caus
ing them to proceed with possibly
too-great caution in the construc
ton of production facilities in ex
cess of normal peak requirements
They fear taxes, Immediately ane
postwar, and many know r o N
personal experience the painful
cost of over-eXpansion.
Spirit of Prudence
This attitude is understandable
Aside from its possible effect OF
the defense program, it is alst
healthy. Many previous spirals O.
expansion had no truly healthy mo-
tivation, so it was discovered after
wards. In these periods. however
caution was usually jettisoned ear
ly; fears regarding inflated prices
and inflated credit we're dismissed
as traitorous.
Otherwise than in the hesitancy
to enlarge physical equipment
abruptly. the spirit of prudence is
noteworthy. The sudden injection
OF so much extra buying would or
dinarily send price a-kiting. The
ry<,