Economy Expected To Dip in First Half; Rally Sharply at End of Year
By ROBERT G. SHORTAL
United Press Financial Writer
New York 0? Top eccon
omists expect the nation's
economy to decline in the first
half of 1958, reverse the trend
in the third quarter and then
rslly smartly in the final
three months of the year.
The Federal Reserve
Board's easier money policy
and increased spending for
defense, new homes, roads
and other goods and services
are being counted upon to
shore up the economy in the
coming year.
The new year will be a pe
riod of rolling adjustment for
industry in general, with
some industries doing better
than in 1957 and others worse.
The big question as 1957
came to an end was: "how
long would the business de
cline last?"
Surveys conducted late in
1957 showed that most fore
casters looked for the decline
to run its course by mid-1958
They felt the second half up
surge would leave the econ
omy a little higher on balance
by the year-end.
Consumer Holding Key
The consumer was singled
out as the key to the 1958 eco
nomic picture. If he continued
to spend money at a record
cliD. the decline would be
mild. Consumer spending ac
counts for about two-thirds of
all the goods and services sold
in the nation
However, if the consumer
decided to play it cautiously,
and tightened his purse
strings, the decline might be
come nrolonged, economists
said.
There are three legs to the
economic tripod govern
ment, business and consumer
spending. Of these, only busi
ness spending is expected to
decline in 1958. Experts hope
that gains in the other two
areas will take up the slack
In this respect, the Russians
may have inadvertently help
ed the economy when they
launched their two earth sat
ellites. Russia's scientific ad
vances have touched off de
mands for increased defense
spending in this country, that
will help to maintain econ
omic activity on a high plat
eau. Unfortunately, all this has
produced one casualty about
which neither businessmen or
consumers are too happy; the
chances of a tax cut in 1958
have been all but eliminated.
Grots National Product Up
Economists pointed put that
consumers proved a great
source of strength in the eco-j
nomic downturns of 1949 and
1953-54, when they received
a major boost from the Gov
ernment in the form of low
er taxes.
The decline now underway
has been termed by many ec
onomists as a sort of blessing
in disguise. They noted that
It will permit the or.derly ad
justment of excesses, forestal
ling dangerous imbalances
and a real depression from
developing later on.
Despite the fact that the
postwar boom leveled off and
then declined in 1957, many
key dollar indicators of econ
omic activity showed big gain
over 1956. This was mislead
ing, because higher prices and
not increased unit volume)
accounted for most of the
gains.
The Gross National Pro
duct the value of all
goods and services produc
ed in the nation, rose
around 2Q billion dollars in
1957 to a new peak of S435
billion. Since industrial
production was little chang
ed from 1956. inflation ac
counted for almost all of
the gain.
Economists anticipate a
more stable price level in
1958, which means that gains
recorded in the new year may
be "real" rather than an in
flationary illusion.
Rise Anticipated in i 958
The consensus among ec
onomists at the 1957 year
end was that the GNP in
1958 would run between
S435 billion and S450 bil
lion. Consumer spending
was expected to rise around
S10 billion to S290 billion.
Spending at all levels of
government federal, state
and local also was ex
pected to show increases.
Business expenditures for
new plant and equipment,
however, were slated to fall
10 per cent below the 1957
level of more than $37 bil
lion. The economy in 1957 also
received some impetus from
a mild buildup of inventories.
Economists anticipate a per
iod of inventory liquidation
extending beyond mid-1958.
This means inventories will
be a minus factor in the ec
onomy during most of the
coming year.
Looking at individual indus
tries, auto sales got off to a
good start in the Fall of 1957
but turned sluggish later in
the year. The feeling now is
that the auto industry in 1958
will not match 1957's volume
of 6.200,000 cars.
Increase Seen in Housing
What happens in the auto
industry is felt all through
the economy steel, rubber,
glass, metals and textiles.
The steel industry had a dis
appointing year in 1957. When
1957 began most steel leaders
were predicting a record year,
possibly 120 million tons. Ac
tual output was around 113
million tons and for 1958 the
outlook is closer to 103 mil
lion. Construction is. a bright
spot. The roadbuilding pro
gram is expected to pick up
momentum in 1958. The two
year decline, in housing starts
came to end in 1957, and a
small increase is looked for
in 1958.
America's 20 billion dollar
export market has been a bed
rock for industry in recent
years. However, in 1958 econ
omists predict some slacken
ing in foreign trade a minus
sign in the picture.
Industry in general looks
for higher dollar sales in
1958,, but lower earnings, as
the price squeeze continues.
They also look for more
strikes in 1958 as wage nego
tiations take place in many
key lines, including auto.
With the easing of inflation
ary pressures in 1957, and
softness in economic activity,
the Federal Reserve cuthe
discount rate, ending two and
one-half years of tight money.
New Boom Visualized '
A further easing of credit
is looked for in 1958, which
will be a boon to many indus
tries and consumers. It will
take time for this easier
credit policy to filter down
through the conomy, . but
when it does the economy
will have a new stimulant.
Inflation is still the major
concern of the monetary au
thorities. Easier credit policies
and the outlook for an unbal
anced budget stemming from
increased defense spending
both are inflationary in na
ture. While the short-term out
look is somewhat cloudy
and cautious, the long-range
forecasts are just the op
posite. Businessmen look
for an unprecedented boom
in the what they call Ihe
"Golden 1960's."
Businessmen are cutting
back their capital expendi
tures but increasing money
for research, which should
lead to a host of new products
that will stimulate consumer
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demand. This; coupled with a
booming population and ris
ing per capita income, should
trigger an economic upsurge
in the 1960's dwarfing any
thing in the past.
RETIRED JUDGE DIES
San Francisco (IP) Isa
dore L. Harris, retired supe
rior judge and veteran of
nearly three decades on the
bench in San Francisco, was
found dead Tuesday, appar
ently the victim of a heart
attack. He was 85.
DRASTIC PRICE REDUCTIONS
Medford
Tribune
MEDFORD, OREGON, WEDNESDAY, JANUARY 1,
Quotes From the flews
By UNITED PRESS
Chicago The. National Safety council, warning motorists
of weather hazards in a special New Year's Eve statement:
"Nature has stacked the cards against the drivers on this
New Year's Eve and the best safety device on earth is intel
ligence." ' ,
Belgrade. Yugoslavia President Tito, commenting thai
scientific achievements of 1957 had brought the world to its
"eleventh hour":
"The new atomic era and the first intimations of man's
penetration into outer space, instead of filling man with im
measurable pride and joy in this triumph over nature, cause
peoples lo fear these achievements of the human genius."
Indianapolis, Ind. Dr. Laurence H. Snyder, president of
the American Association for the Advancement of Science,
on the need for financial aid to the nation's universities:
"I think that if Congress would supply money to the uni
versities with no strings attached, they would find the best
way to train scientists and improve science." . .
Hollywood Leona Gage, ousted Miss USA of last year's
Miss Universe contest, on combining an engagement in a Las
Vegas hotel with establishing residence for a divorce:
"I've got to make a living and this engagement ... gave
me a chance lo become a Nevada resident so I jumped at the
chance."
Chicago Adlai Stevenson, saying the United States must
learn to live with its allies as well as its enemies:
"And it is well to remind ourselves of the lessons of the
satellites that we are part of the human farriily"and must
learn to live not only with our allies but our adversaries."
Washington Howard T. Orville, President Eisenhower's
special weather adviser, on control of the weather:
"If an unfriendly nation solves the problem of weather
control and gels into the position to control the large-scale
weather patterns before we can, lhe results could be even
more disastrous than nuclear, warfare.
1958 J
REGULAR
$ 9.95 Copper
CHAFING DISH
$115.00 98-Pc. Noirtake
China
$ 59.95 China Service
for 8
$ 24.95 Men's Luggage
(Just a few left)
$ 28.50 Ronson Shaver
with trade .
$ 5.95 Asstd. Watch Bands
Ladies and Gents
$ 24.95 Westinghouse
Radio .
$88
$3g88
$2788
$1288
$995
88
95
$17
39.95 Emerson Portable
Kadio
4-Speed Hi Fi
mono
89.95 4-Speed Hi Fi Port.
Phono, leather case
10.50 Seth Thomas
Electric Alarms
24.95 Toastmaster
Skillet
9.95 16-Pc. Starter
Set Pottery
BUY ON WEISFIELD'S EASY TERMS
DEBUNKS A-WAR CLAIMS
Representative Charles 0
Porter (D., Ore.),.at a Wash
ington press conference said
that reports that a single
bomber crew carrying nu
clear weapons on training 01
patrol flights could start an
atomic war, are groundless
The planes must land before
the highly complex activa
tion of the weapons can be
performed, he explained.
BRILLIANT CLEAN BEAUTY
"Miss Simplicity
EpDA&Kli
4
3S
First American steel was
produced in Connecticut in
1728.
RETIRED FLIER DIES
London (IP Retired Air
Chief Marshal Sir John Nel
son Boothman, onetime hold
er of an air speed record, died
last Sunday at the age of 56.
Sir John, as a flight lieuten
ant, averaged 342.9 miles an
hour over a 31.7-mile triangu
lar course in seven encircle
ments in 1931. For setting
this record he received the
Air Force Cross from King
George V at Buckingham
Palace.
113 Students from
Medford At OSC
Corvallis A total of 113
students from Medford are
enrolled this year at "Oregon
State college, according to a
report issued by the regis
trar's office at the college.
Others included in the 174
total for Jackson county in
clude 17 students from Cen
tral Point, seven from Eagle
Point, eight from Gold Hill,
two each from Jacksonville
and Prospect, and one each
from Applegate and Talent.
The 174 total is an increase
from 127 last year.
All of Oregon's 36 counties,
37 states, all U. S. territories
and 37 other counties are re
presented this year in the
record 7676 student group at
OSC. This year's enrollment
is nearly 200 above the old
record set in 1947 when the
peak was recorded in the en
rollment of World War II veterans.
RETIRES EARLY
Sleepy Eye, Minn. (IT)
How does New Year, 65, a re
tired carpenter, celebrate
New Year's eve in Sleepy
Eye? By going to bed early,
of course.
MM
m
raw
Jotest trans rstof
SonotoM hidden m
attractive glasses
smoflerf bearing
aid vorfd, wmr
All AT TH EAR
NOTHING WORN ON B0DY1
NO CORD DOWN NECK
NO "BUTTON" IN EAR)
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model worn in
iety of styles
S0N0T0NE
Happy New Year
from the
Officers, Directors and Staff -
Savins lt io (p.
put
Come In, Phone or Write Free Demonstration No Obligation
SONOTONE of MEDFORD
C R. ADAMSON, Manager 839 E. Jackson Ph. SP 2-S904
SAVINGS
126 East Main
Medford
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MORE MONEY SAVING SPECIALS
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$ 49.95 Universal Upright Vacuum
$ 32.95 Toastmaster Waffle
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$ 27.95 Toastmaster Toaster
$ 24.95 Sunbeam Drillmaster .
$ 19.95 G-E Steam Spray and
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LOAN
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$ 24.95 Sleeping Bag
$
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AUTOMATIC A
is
$229.00 21" Emerson TV Console.
49.95 3-Pc. Luagage, 26" Pullman,
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$ 2.49 Bone China Cups
$ 2.49 Ice Bucket
$17900
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EASY CREDIT TERMS
Medford
Store Hours: 9:30 a.m. to 5:30 p.m.
OPEN MONDAY EVENINGS UNTIL 9
Phone SP 3-5348
P.M.