Evening star., 1950-07-23
Trade and Industry
Feel Widening Effects
OF Korean HostiIities
By the Associated Press

By the Associated Press
NEW YORK, July 22.-Business
and industry headed toward a war
footing this week. Effects of the
Korean hostilities spread rapidly
to every nook and corner of the
Nations economy.
Plants closed since World War
II were revived. Men idle for
months were called back to Jobs.
More vacations were Cancelled.
Men Wanted signs were busted
off.
Industrialists burned the mid
night oil to plan for whatever tools
the Nation may need. They told
President Truman the huge pro-
ductive capacity of their plants
was at his beck and call.
And while plans for even greater
output were in the making, the
iWhirring wheels of industry turned
at near-record peacetime pace.
Industrial production was on a
favorable footing with any week
of the year and employment was
close to if not at a new peacetime
high.
HOarding Condemned.
The big news of the week in
business as its probable call to
arms. But a serious threat to price
stability brought on by boarding
shared the spotlight.
President Truman, civic leaders
and ordinary businessmen pleaded
with monotonouS frequency for
the consumer to abstain from
overbuying.
Newspapers devoted columns to
the enormous quantities of food
and other goods available in the
United States.
Radio stations gave over one
minute program breaks to anti
boarding messages from business
leaders.
But nothing stayed the swift
trip of the consumer to the grocery
and department. store. There were
indications at the week end, how
ever, that sugar buying was easing
of bit and that fewer people
were rushing to fill freezers with
meat.
In the second week of the Ko-
rean war the Nations stores did
"a per cent more business than a
year ago. Business leaders said
buying was on the increase before
hostilities broke out and has &C
celerated since.
Hosiery Sales Doubled.
Woman shoppers doubled their
normal nylon hosiery purchases.
Housewives sought larger-than-
normal quantities of sugar and
canned goods. Orders for auto
mobiles and television sets in
creased.
And prices, which had been ris-
ing rapidly even before the Ko-
rean hostilities. shot upward as
purchasing expanded. Automobile
tires and gasoline cost more. Food
was more expensive. Worsted fab
ric price increases added 50 or
more to next springs suit.
There were continuous warnings
that excessive buying could lead
only to higher prices. President
Truman said tiatly he would seek
controls on prices and he would
ask rationing if necessary.
The Presidents warning was
contained in his message to Con-
gress asking for $40 billion for the
Korean war and as a safeguard
against aggression elsewhere.
The message spelled the end of
business as usual" at least for the
duration of the Korean hostilities.
Higher Taxes Expected.
1t was a 1,000-to-1 shot that
taxes would go higher both for
the individual and the company
he works for. How much higher
was pure guess. but around Wash
ington they speculated that Presi-
dent Truman may ask for a $5
billion to $40 billion annual in
crease.
| The Senate-House Economic
Committee was all for an imme-
diate multibillion- dollar "across
the board" boost in Federal taxes.
But this committee is only ad-
visory. Other congressional groups
will write the check.
However, most legislators agreed
the tax increase will have to be
substantial.
The Nations businessmen and
industrialists wasted little time in
Speculating.
Overnight General Motors Cad
lilac division began negotiating
with the Army on mass production
of tanks.
Such basic industries as steel.
automobiles and television and