You Can't Build Too Fast

"Time and again the Nervous Nellies have cried out that we are moving ahead too fast," said 38-year-old Henry Ford II last week. "But with reasonable and sound planning, we can hardly build too fast. Just to keep from losing ground, we've got to move ahead."

This was a feeling shared by many of the largest U.S. companies last week. Ford Motor Co. brought out its new $10,000 Continental (see Autos), and announced that it will spend a thumping $500 million for expansion next year. Opening a new car and truck assembly plant at Mahwah, NJ. ("To knock the socks off competition"), Henry Ford said the company would build a new Mercury assembly plant in Los Angeles, expand research centers for autos and farm implements, build another chassis plant in Michigan.

Chrysler Corp. announced that it will build near Macedonia, Ohio an $85 million body-stamping plant, with enough capacity to supply all passenger-car divisions with fenders, body panels, deck lids and doors. Kaiser Aluminum & Chemical Corp. will spend $90 million to expand its Ravenswood, W. Va. sheet-and-foil plant, add to other facilities in Maryland, Louisiana and Washington. New Jersey Bell Telephone Co. decided to put out $100 million worth of new securities over the next two years to keep up with the growing population and record construction boom.

All over the U.S., the economy pushed ahead. For the first time in four months, reported the Agriculture Department, farm prices ended a decline and edged upward, about 1% between mid-August and mid-September. Machine-tool makers boosted their estimate of orders to $800 million for this year, a full $100 million above earlier predictions and a whopping $240 million above orders for last year. With the auto industry beginning to hit a good production stride, the nation's steel production climbed to 96% of capacity, almost 26% over the same week in 1954. Sales of new cars were roaring ahead: in September's first 20 days, General Motors dealers sold 220,539 automobiles, a fat 63% over the comparable period last year.

Actually, the worry about the big boom last week was not that it might stop, but that it might roll ahead too fast. The season's new splurge of auto buying pushed consumer credit up another $750 million to an alltime record of $33.6 billion. At the Chicago meeting of the American Bankers Association, Treasury Under Secretary Randolph Burgess warned: "The very growth and prosperity of today have brought the threat of inflation." There were some bankers who agreed with him. However, many said that they hesitate to turn a customer down, because they know he can very easily take his business to a finance company, or to another bank.

Nevertheless, many banks are tightening credit, (e.g., many now require one-third down on new-car purchases, limit the repayment period to 30 months). Bankers, said A.B.A. Installment Credit Commission Chairman Philip Woollcott, must adopt a policy of "self-restraint and careful selection of risks."

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