Evening star., 1947-01-27
GentuIizing DepIored
In Analysis Of Business

GenFulizing DepIored
In Arplysis Of Business
Truman Economic Report Cited
to SHY Vast Fluctuation.
BoDdsid La,cyence
There isl tendency to seneralise
about the hiness situation, when the
truth is, sonalines have made their ad-
justment AMI others have Just begun
to readjust.
The whole Rice situAtion IL under
going considsble overhaulins at the
moment, but Ire again there Is dan
ger in generating. Some prices ac-
tuslly are advacing.
One OF the fiprite pastimes Of those
who discuss thabusinsss outlook Is to
assume that tn word business" cah
be defined Is nsle entity instead Of
being an institupn with naultifarious
parts and with aariety Of factors.
This phase Of pnomic discussion is
best described inhe economic report
of the President Hently submitted to
Congress. It sayss
Business profitsbesan to rise in
many lines Of nondkable goods and in
most trades and SERIES soon after VI
day. This rise refiaed the increased
volume Of civilian sail ss In most Of
the soft goods and s8ice lines profits
after taxes in the slond quarter Of
1916 were already abe the levels Of
1914 and 1e45. Furths increases were
reported for the third l,arter."
This was to be expect4 because most
Of the consumer goods We cut OF dur
ing the war and almost by production
would bring better resui profits- wise
for the consumer INDUSTRY which were
virtually closed down ofsharply ra-
toned as to supplies dung the war
years. y
Profit Uneven Between isinsssss.
The economic report theAoes on to
say: y
"But profits have been extmely un-
even as between industries. In many
Of the reconversion industrieaA Aspecial-
ly where volume was slow 4 getting
under way, profits at first werdow and
In many cases there were actul losses,
many Of which, however, were atviated
by the carry-back provision Of 10 tax
law.
Third quarter reports showl In
creased profits in most Of the dable
goods industries, although priceeeil-
ings had not yet been generalI re-
moved. Profits increased furtherlur-
ing the fourth quarter with the REVIVAL
Of price control.
I'VE should not infer that all inns
tries or all firms in given indury
were operating at . highly profitle
level or that none were incurring loss'
The business outlook in 1947 canH,
for the same reasons, be generaliA
accurately. For some businesses beg(
their readjustment in 1945 and virtual
completed it in 1916, while many wei
delayed by strikes and shortages d
materials induced by strikes.
In 1916 some of the consumer good
industries began to thrive after havin,
been starved during the war years, ant
now, in 1947, many businesses are stil
trying to get needed materials and ar,
worried about the price structure.
Controls Remained Too Long.
The removal Of price controls was O.
course, too long delayed. Valuable tim,
? In the reconversion and readjustmen,
process was lost because the advocates
OF controlled economy fought return.
ing to the law Of supply and demand.
Now that price controls have beer
removed. imitation has not been intensi.
fed. On the contrary, many prices have
dropped, which Is exactly what tn,
sound economists were saying last yea1
would happen If political Govsrnmen,
would take its hands of the nationa
economy and let consumers and seller,
adjust prices as they always have befor,
In free economy. 2F .
What IL true Of the uneven course
OF profits as between various lines oI
business in 1916 may be said with respec,
to operations in 1947. For some busi.
nesses, the outlook already is very prom.
ising. For others, there are serious day.
of readjustment ahead.
Fortunately, the repeal Of the exces,
profits taxes came just in time to fur
nish reserves of working capital for tn,
businesses needing readjustment. tn,
national economy Is following the pat.
tern OF the years Immediately after tn,
end Of World War I, when, after a few
months Of readjustment, the Nation
went ahead to unparalleled heights o.
employment and prosperity.
lRAnrndncfior Iaiaht. nasA,..AA