Ebbing Tide

The leveling-off process, noted across the land, showed signs last week of also slowing down new wage raises. In the year's first major test of fourth-round demands, the C.I.O. Textile Workers Union lost its fight for a 10-c- increase in the New England cotton and rayon industry.

The union had demanded the increase for 30,000 workers in the New Bedford-Fall River area, which traditionally sets the northern wage pattern in cotton. (But not for such basic industries as autos and steel.) Arbitrator Douglas V. Brown, of Massachusetts Institute of Technology, said no. In professorial tones, he warned that the industry faced "a decrease of an insufficient increase in demand." (Translation: business isn't very good.)

Softening Spots. Further drops in the cost of living promised to ease the wage pressure still more. The average retail drop in the price of meat since last September's peak, said the National Association of Retail Meat Dealers, was estimated between 15 and 20%. Packers were keeping their fingers crossed on whether the drop would continue, but they thought that meat would be in "pretty good supply for the rest of the winter," thanks to the bumper corn crop.

If the drop in consumer demand had brought a buyers' market in textiles, electric appliances and many another line, it was also bringing something like a buyers' market in labor. There was a sharp rise in the number of jobless in some states. The layoffs were also caused by a seasonal slump in building, and shutdown for inventory-taking, retooling, etc. In New York, the number getting unemployment benefits jumped from 320,544 in November to 461,280. But in such places as Pittsburgh and Detroit, there was no letup.

Harder Selling. Few businessmen were worried. They did not think that the economy would bog down because of a few soft spots as long as the basic industries were humming. Example: steel mills, operating at capacity for the second week in a row, turned out 1,845,000 tons.

Even retail trade, which had been queasy six weeks ago, looked healthier again. In 1949's first two full weeks, department-store sales in big cities were generally from i to 30% better than the 1948 period. And since many prices had been slashed to move sluggish stocks, these figures did not reflect a still bigger increase in unit volume.

But there was no question that after a decade of easy selling, many executives are finding themselves in a strange new world. As Randolph Hyde, treasurer of the Carnegie-Illinois Steel Corp., pointed out, probably half of them, having come to the top in an easy-selling, war-boom decade, were "without true competitive experience." They were getting it fast.

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