The Key West citizen. [volume] (Key West, Fla.) 1879-current, 1953-04-16

BUSINESS
MIRROR
BY SAM DAWSON

s
NEW YORK RBusinessmen
trying to judge what Korean peace
talks viii do to the boom win keep
close watch on three things in the
next few weeks:
Any signs of consumers slow
ing down their buying, especially
buying on time.
Any signs of businessmen cut
ting back on new orders and start
ing to live off their high inven-
tories-the thing that brought on
the recession of 1919.
And any cutback in business
plans TO spend money on new
plants and equipment.
These three things are consid-
cred by many businessmen as the
chief things to watch for just now.
They believe that the other prop
of the boom--high government
spending for defense-will be low
cred slowly, if at all.
But if consumers grow cautious.
and if businessmen live off inven-
tories and drop present plans to
spend record sums on further ex-
pansion-then the boom may top
out quickly and business slow
down.
In recent days business leaders
have been quick to issue optimiS-
tic statements, saying that in the
long run peace, if it comes, could
only be bulliSh. Any possible
stretch-out in the defense program,
if it means lower taxes and more
materials for civilian production,
would do little to hamper present
prosperity, these leaders contend.
Business activity is now at an
all-time high. National output Of
goods and services is now at an
annual rate of 1853 billion dollars,
up 3 billion dollars over the last
| three months of 1852, and COM
pared with $40 billion dollars in
the first three months of last year.
Businessmen have pushed their
spending for plant and equipment
to new record annual rate of "a
billion dollars in the first three
months of 1858. The Department
of Commerce says they plan to
spend at an annual rate of Is bill
lion dollars in April, May and
June, and to cut back to a little
more than 26 billion dollars an
nual rate in the last half Of the
year.
But chances are that the peace
talk will cause many business
men to take second look at these
plans.
Executives stress that most of
their plans for improving their
own competitive position.
Tool makers are hitting that line
Of sales talk hard row. They say
that new machinery win lower the
costs Of doing business for many
manufacturers so that they can
outsell their competitors.
Much Of the new equipment re-
Gently installed was to replace old
machines rather than to increase
the size Of plants. Factory man
ayers, plagued by rising labor and
other costs, win study such inn
provement plans cioseIy--but at
the same time they'll keep a close
watch on the effect Of talk Of peace
on business sentiment, and con-
sumner purchasing.
High inventories could be more
immediate threat. Business inven-
tories at nearly 75iz billion dollars
are more than one billion dollars
higher than a year ago, But since
sales are higher 100, business lead
ers stress that inventories aren't
out Of line now.
The danger, however, would
come only If businessmen sudden
ly did what they did in 1s49, be-
gan going slow on new orders and
trying to reduce inventories. That
could quickly cut back production
schedules at mills and factories.
Employment 10 March was at
an ali-time high for the month.
and IA million more persons had
Jobs than q year ago. Personal In
come IN the first part of the year
was 6 per cent above a year ago.
It's a ripe boom that some bush
nessmen are worrying about as
peace talk spreads.