View of the Boom

STATE OF BUSINESS

Encouraged by the fading Suez crisis, the stock market last week scored the biggest week's gain since 1938, with industrials soaring 22.01 points on the Dow-Jones average to close at 494.79. Across the board, a pre-Christmas surge of business sent old records falling. The Commerce Department reported manufacturers' sales at a new high of $30.1 billion in October, $1.6 billion better than the previous record of last March; new orders rose to $29.5 billion, $300 million above last August's previous high. Personal income also set records: after topping previous peaks for two straight months, it rose again in October by $3.1 billion to the annual rate of $332.6 billion, $21 billion ahead of last year.

But there also came advice to the fast running economy to watch its step. Speaking to the Executives' Club of Chicago, Henry C. Alexander, chairman of J. P. Morgan & Co., warned: "Historically, a capital-investment boom such as we are having now has been the culminating phase of the economic cycle. If we keep on accelerating present pressures and loosen our restraints, we will get into maladjustments of production and consumption and excesses of debt--into a spiraling orgy--with the inevitable aftermath of collapse. Yes, the time is here to spend less and save more."

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