What's in a Name?

Still full of steam after a six-month rise, the stock market passed a significant milestone last week. As far as Dow theorists were concerned, it was finally a bull market. The Dow-Jones industrial average reached 193.63, breaking a 17-month record. One day later, the rail average moved a full point higher than its previous mark of 49.60, set on March 30, thus "confirming" the industrials.

Some skeptics reserved judgment. They recalled that Dow theorists had been just as sure that a bull market had arrived in June 1948. It had hardly been "confirmed" when stock prices fell into a long slump. Whether the theorists were right or wrong this time, there was little doubt that the economic climate was bullish. The steel industry had bounced back from its strike to 91.7% of capacity. And the year-end extra dividends and fat regular dividends continued to pour out.

While Wall Street bulls were sure of where the market and the U.S. economy were going, there was still a question in Washington, it seemed, of where the U.S. economy had been. Last week, testifying before Senator Paul Douglas' subcommittee on fiscal policy, Treasury Secretary John Snyder bridled when the word "recession" came up:

Snyder: "We do not consider last year a recession, you understand . . ."

Douglas: "1949 was not a recession?"

Snyder: ". . . As a national picture we have had adjustments but certainly no recession . . ."

Douglas: "Well, it was a recession from 1948."

Snyder: "You are talking about the inventory adjustment at the end of the year?"

Douglas: "Mr. Secretary, wholesale prices went down, as I remember it, by 8%, manufacturing production ... by about 16% . . . Unemployment went up ... I know there are lots of semantic difficulties in these things, but I would call that a recession."

Snyder: "Frankly, in the volume that took place, I would call it an adjustment."

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