(5 of 10)
Diamonds from the Laboratory. While the U.S. consumer spent heavily in 1957, the businessman outdid him, plunked down $37 billion for new plants and equipment (plus $1.5 billion more for new offices), and devised one of the major props under the U.S. economy. Steel expanded 5% to 141 million tons annually; aluminum added 2% to its capacity, synthetic rubber 14%. Oil and chemicals both spent record amounts for expansion. Serving them all. the nation's utilities grew at compound rates, increased their outlays 28% to $6.3 billion, and in the process added 7% to U.S. generating capacity. Among the additions: the first full-scale atomic power plant, which Pennsylvania's Duquesne Light Co. put in operation at Shippingport to serve eventually the needs of 120,000 customers.
As in past years, much of 1957's expansion was for new production to catch up with blossoming markets or to supply new markets created by research. Industry laid out a staggering $7.3 billion for research and development, some 20% more than ever before. Every businessman knew that the money will eventually flood back to industry, as laboratory oddities turn into new consumer products. General Electric learned to make synthetic diamonds so cheaply that they will soon start competing with natural stones for industrial use. It also developed the first really practical telephone-TV system, plans to install the first one at a military base next spring. American Gilsonite licked the problem of making gasoline in quantity from rock, built a $14 million plant for commercial production. Science could even give humdrum old materials an exciting new lease on life. For years U.S. Borax & Chemical Co. mined borax for use as a household cleanser. Today Boron is a new wonder element, used in everything from drugs to super-powered rocket fuels.
The Road Ahead. At the beginning of 1957, businessmen and economists were unanimous about the outlook: the first six months would be great, but then there might be trouble. At the beginning of 1958, the crystal-ball gazers are once more unanimous—but with a difference: the new year will see a sharp dip during the first half, followed by an upturn in the last six months, helped along by big increases in Government spending. Will the first-half softening lead to price cuts in key industries? The answer seems to be no. Few industries, as demand eased, were talking of price cuts. Instead, they were hastily chopping production, keeping inventories down and, like their customers, living from hand to mouth while they waited for business to improve.