Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-02-08
Outlook Bright
For Investors,
Congress Told
Economist Predicts
Big Industrial Outlay
For Plants, Equipment
By jones Y. Newton


A panel of experts told Con-
gress today the general outlook
for investment this year is good
not so favorable as in the
record-breaking year of 1853
but perhaps better than in any
other year on record.
The six authorities, engaged
in various phases of business
and economic activity, testified
before the Senate House Eco
nomic Committee which opened
two weeks of panel discussions
by experts on various parts of
President Eisenhower's recent
econmic report to Congress. The
committee had heard from adj
ministration officials last week.
Heavy Spending Predicted.
Dexter M. Keezer, director Of
economics for the McGraw-H Hill
Publishing Co.. predicted that
American business as a whole
is planning to spend more for
new plant and equipment" in
the current quarter of this year
than in any first quarter on
record"
Mr.. KeeZer added that busi-
ness OUTLAWS for capital improve
ment would drop off slightly
during the last nine months Of
the year. But he predicted a
decline in investment for new
plant and equipment for this
year as a whole of only 5 per
cent from the "all-time record
breaking year of 1853"
The current dip in business
activity has been attributed by
economic experts to the fact that
business firms have been dispos-
ing of inventories of stocks with
which they were too heavily load
ed in recent months.
Inventories Down.
On that score. Ralph Watkins,
Dun & Bradstreet economist,
said there already has been a re-
duction in accumulation of in
Ventories on an annual rate Of
about 50 billion. He predicted
that this inventory reduction
would be halted late in the year
and that it would be accom-
panied by a general upswing in
business.
Mr.. Watkins forecast a gross
national product" the total
value of all goods and services
produced in this country, Of
about $3.50 billion-compared
to an all-time peak great Of
S37l billion reached in the Sec
ond quarter last year.
Walter E. Hoadley, jr., econo.
mist with the Armstrong Cork
Co.. said a decline in construc-
ton activities, particularly in
home building. probably would
continue through this year and
into next. But on a long-term
basis. he continued. building is
unqueStlonably one of the coun-
try's outstanding sustaining in
dustries and can be expected to
serve as a sustaining force on
the entire economy"
Foresees Housing Boom.
Mr.. Hoadley predicted that
within 10 years, from is million
to 2 million new housing units
will be built annually, a sharp
increase over recent boom years
in residential construction.
He said that increased en-
phasis should be given to fixing
up existing residential units. a
field he described as having a
tremendous potential" He sug-
gested that Congress enact
legislation to enable home owners
to modernize their residences by
allowing them to add on to FILA
mortgages loans for this type of
work.
The administrations new pro-
gram of tax reform, which al
ready has passed the House
Ways and Means Committee,
was praised and attacked by two
other witnesses.
Hit by CLIO Official.
Stanley H. Ruttenberg. chief
OF the CLOS research branch.
said the program gave too much
relief to business and not enough
to individuals. He said that what
was needed now, rather than in
centives for industrial expan-
sion, was to give relief to lower
income taxpayers so they could
purchase goods already on the
market.
The Presidents program was
praised by George Terborgh,
head of research for the Ma
cllnery and Allied Products In
Stltute. He said that it was "a
good start toward reforming