Brighter Outlook

Whether or not the U.S. gets full employment after the war depends on whether there is a high level of capital investment--as in the '20s--or a return to the dismally low levels of the '30s. So most economists believe. Fortnight ago the conservative Investment Bankers Association published some tentative reports indicating that the postwar prospects for investment should be bright. Highlights of the reports:

> Through deterioration of rolling stock and equipment and modernization needs, the U.S. railroads for at least ten years after the war may make capital expenditures of as much as $1 billion a year. Nearly two-thirds of this amount will be paid out of earnings and depreciation reserves, but about $400 million a year may be borrowed in the open market.

> Domestic airlines will need another $300 million of new money within three years after the war to re-equip themselves, enlarge their facilities. Overseas operations will need substantial additional funds.

> Conversion and retooling of wartime plants to peacetime operation, and the repurchase by private corporations of some of the 1,479 plants now owned by the Defense Plant Corp. will require more money. Total new capital needs for all purposes for three years after the war, according to the Association, may run to as much as $5 billion a year. This is below the 1929 peak, when some $8.6 billions of new corporate issues were floated; but it is far higher than during 1931-40, when new corporate issues got above $1 billion a year only thrice. (In 1933 they fell to as little as $160 million.)

A whole new school of investors, the Association points out, will be ready to contribute their savings to these new capital demands. Just as the Liberty Loan drives of World War I educated many a new security buyer, so (according to their estimate) there will be, by war's end, some 75 million Americans owning war bonds. In bringing the savings of these new investors into contact with private securities, investment bankers naturally see a big job ahead.

This file is automatically generated by a robot program, so reader's discretion is required.