Sweet Adversity

To their pleased surprise, businessmen this week found that the coal strike (see NATIONAL AFFAIRS) had left them with few lasting bruises. Steelmakers, for example, had managed to keep production at high levels by using up their coal reserves and gambling on an early settlement. Though the strike had cost them 600,000 tons of steel, there was a brighter side. Before the strike, the industry had expected to stay at peak production only through the first half of this year. Now it has backlogged enough orders to keep it booming well through the third quarter.

The kingpin U.S. auto industry had not suffered at all. In fact, it boosted production last week to 119,955 cars & trucks, 2,468 more than the week before. And in January and February it had rolled out 1,013,246 vehicles--nearly 19% more than in record 1949's first two months. For the U.S. economy as a whole, the Federal Reserve Board estimated that the strike had nipped total production only 2% to 3%. Prospects were that industry would soon make that up--and then some.

One loud voice of doom was heard in the land last week. It belonged to Montgomery Ward & Co.'s hard-bitten Chairman Sewell Avery, who has been preparing for disaster for the last three years. To the stockholders of U.S. Gypsum, which he also heads, Avery reported that the company had salted away $55 million in cash reserves. Warned Avery: "The thing that hit us in 1929 cannot be assumed not to happen again. Personally, I have been waiting for years for the ax to fall. I am becoming more convinced momentarily that the time is not far away."

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