Madison County Democrat. (London, Ohio) 19??-1958, 1953-12-18
Surveys Agree
1854 Business
To Remain Good

in the 1854 business forecasts.
Both government and private sur
veys agree that-C1) There will be
no major depression; (2) no gen.
eral collapse of farm prices; 90
no disastrous credit pinch on busi-
ness inventories; (4) no tailspin of
widespread unemployment; and
81 no shooting war in 1854.
This is the broad business pic
ture presented by six federal de-
partments and six private fact
finder surveys after three months
of intensive study.
World tensions will be eased by
Russia's increasing attention to her
critical domestic situation-food
shortages, declining living stand
ards now nearing the breaking
point of human tolerance, and
crippling satellite resistance, in
Germany, China, Poland, and Cze-
cho-Slovakia.
Four major assumptions in gov
ernment policy underline the con-
fident year-end business forecasts.
First, farm, price supports, as
sured at present levels through
December 1854 under existing law,
almost certainly will be extended
by Congress at 80 percent of par
ity for the six basic commodities
wheat, corn, cotton, tobacco, rice
and peanuts.
Second, federal cash spending
will continue through July 1855 at
about current levels-approxim-
ately $5-billions per month.
Third, the Federal Reserves
money and credit policies will sus-
tain new construction at about S34-
billions for 1854, only 2 percent
below the peak boom level of 1853
A million new homes are in pros
pect for the coming year.
Excessive business inventories
and farm surpluses will be levelled
off in an orderly manner, not by
progressive bankruptcies from re-
taller through wholesaler to man
ufacturer.
Fourth, determined efforts of the
Eisenhower Administration to ac-
hieve a "cash balance" in the fed
eral budget already have ended
the upward spiral of initiation, so
marked since the Korean outbreak
in June 1880 The initiation boom
is over. With 1854 the U. S. econ
omy enters an era of planned Sta
bility"-to use the words of Presi-
dent Eisenhower's trusted econom-
ic counSellors.
Says Secretary of the Treasury,
George Humphrey: Neither AM
erican business nor American lab
or needs war to be prosperous. Our
population is increasing at rate
of close to IS percent a decade . g.
This Administrator is dedicated to
the maintenance of a high level of
employment and production, and
will always pursue policies to fos-
ter that end. Our volume of pro-
duction apd employment can be
higher than ever"
The American family diet will
be maintained at today's bountiful
level, the Department of Agricul-
ture predicts.
Food supplies are likely to be
about as large as in 1853. Consum-
er demand for food will continue
strong, so food consumption per
capita, and retail food prices, are
not expected to differ much from
1853 levels"
During 1853 the American peo-
pie added roughly S19-billions to
their personal savings funds. And
there is another S9-billions piled
up in the unemployment insurance
reserves of the 48 States. Counting
insurance reserves, government
bonds, savings deposits, and cash
balances, the American people
now have more than S163- billions
in ready liquid reserves-a very
stout cushion against any general
business recession. Consumer cred
it outstanding is only about S25-
billions.
There has been no failure of an
insured bank in the us. since
1914.
Stock market prices do not face
sharp deflation. At the top of
the 1929 boom, stocks were selling
at 1873 times annual earnings; to-
day stock prices are only 81 times
annual earnings. Expiration of the
excess profits tax on December
31st further buttresses corporate
earnings prospects for 1854.
Demand for steel - always a
basic business barometer-contin-
ues strong with firSt-quarter book
ings running very close to produc-
tion capacity Says BENJAMIN F
Fairless. chairman of US. Steel:
I'm optimistic for 1854" He esti-
mated steel operations at 95 per.
cent of capacity for the first quar-
ter-a robust boom level.
Spendable income of the Ameri.
can people is running at the rate
of S250-billions a year, after taxes
Only ten years ago thsi figure
stood at S147-billions An autonoa.