State of Business: Pleasant Sounds

Talk alone cannot create prosperity—but is essential to it. Across the nation last week, the surprising business upturn —and where it would lead—was the subject of almost every businessman's conversation. The usual optimists had a field day, the fence-sitters felt stirrings of commitment, and even the normally cautious allowed themselves a grunt or two of satisfaction. The sentiments of U.S. businessmen, from the corporate chief to the corner clothier, were captured by Wall Street's Francis I. du Pont & Co.: "The current upswing in business seems to have something for everybody." Only six months ago many trendspotters had worried aloud about a mild recession in 1963, but the 20 professional economists reporting to the semiofficial Business Council last week saw the gross national product rising 4% to $578 billion for the year. This was a modest forecast; many economists anticipate a G.N.P. of at least $585 billion. At the semiannual meeting of the Council's 100 leading businessmen in Hot Springs, Va., Chief Presidential Economist Walter Heller conceded that the Administration had been too con servative about the year, said that the Government might well "revise upward" its own official prediction of a $578 billion G.N.P. for 1963. His hint: about $583 billion. Color Broadcast. In Detroit, auto producers predicted that car sales this month will crack last October's alltime record of 728.552. A few even dared to forecast that 1963 sales will top 1955's historic high of 7,200,000. Last month U.S. consumers bought well over 700,000 cars—more than Detroit managed to produce—and sales have been running 2,000 a day ahead of last year's high rate. Steelmakers, now pouring at 82% capacity, look for shipments in May to be the highest in three years; they expect June to be at least as strong, even though steel users have now conservatively bought up enough to hedge against an unlikely strike. RCA felt so roseate that it broadcast its annual meeting over closed-circuit color television in Rockefeller Center, and announced that profits are at records and that sales of color TV sets are 40% above last year. From Standard Brands to Xerox, dozens of major companies reported record first-quarter earnings. So far this year, increased dividends have frequently gone hand in hand with better profit figures, including those reported by many of the big oil producers as well as by IBM, Nabisco and Lockheed Aircraft. Lift for Stocks. One dividend boost in particular stirred talk and buying on Wall Street. Reflecting record first-quarter profits of $414 million, General Motors last week declared a special 50¢ quarterly dividend on top of its regular 50¢ payout, which will add an extra $143 million to the pocketbooks of its more than 1,000,000 shareholders. G.M. stock jumped 45 points to 73⅜ in the four trading sessions after the news—and lifted other stocks with it because many theorists hold that G.M. is a "leading indicator" for the entire market. The Dow-Jones industrial average rose 5.22 points for the week, closing at a 14-month high of 723.30. Most important, brokers reported a rising number of small transactions—a heartening indication that Main Street is beginning once more to put its money-backed bets on the future of the economy.