ernment and the drug industry. Sen. Gaylord Nelson (D.-Wis.) and the Subcommittee on Monopoly are hold­ing hearings on pricing policies and other problems of the drug industry.

These hearings could become an is­sue themselves in further action in the antibiotics case. In commenting on the verdict, Bristol-Myers states that, "The jury may have been influenced by the inordinate amount of recent publicity on drug prices and profits emanating from the Federal Govern­ment in Washington." Pfizer also comments that, "It is unfortunate that the trial occurred in an atmosphere of unfavorable publicity about the drug industry, emanating over the years and during the trial from Congressional in­vestigations and debates."

Solid economic growth predicted by Commerce Department

The U.S. Government's first official forecast of business conditions for 1968 is out. Quite optimistically, it pre­dicts a year of solid growth. And the forecast has already received consider­able backing from two independent economic predictions released almost simultaneously with it. All three fore­casts call for about a 6.5% or better boost in gross national product for 1968 over 1967. About half of the in­crease will be real with the rest due to higher prices.

Speaking at an American Marketing Association meeting in Washington, D.C., Secretary of Commerce Alexan­der B. Trowbridge predicted that busi­ness volume will increase with partic­ular vigor in the early months of 1968 and strongly for the rest of the year. More specifically, he sees GNP in 1968 spurting at least $50 billion over the estimated 1967 total of $785 bil­lion.

A survey of 417 economists spon­sored by the American Statistical As­sociation (ASA) has yielded a median 1968 GNP of $835 billion. And 12 economists participating in the annual National Industrial Conference Board (NICB) economic forum have come up with an $842 billion GNP for 1968. C&EN's computer-based projection is $843 billion (C&EN, Dec. 18, 1967, page 102).

However, these predictions do not indicate all peaches and cream for businessmen in 1968. For instance, inflation will bear careful watching as a continuation of last year's rate of 3% increase in consumer prices is ex­pected. Also, the current profit squeeze will probably continue.

Secretary Trowbridge points out that the Commerce forecast is based on the assumption that a "sense of

reasonableness and responsibility will prevail in both the public and private sectors." Without it, what he calls the "new wave of prosperity" for 1968 will be in jeopardy. However, he is confident that federal spending will be cut and that Congress will enact the income tax surcharge to head off inflation. He is also confident that business will show restraint in price increases and that labor will be simi­larly restrained with wage demands.

In wrapping up the nation's eco­nomic progress in 1967, the Commerce Secretary told the marketing meeting that GNP showed a "healthy" $42 bil­lion, or 5.5rA, increase during the year. After correcting for price increases, the annual rate of real growth in the production of goods was about 1% for the first half of the year and 47c for the second. Overall increase for the year was about 2.5r/c. He adds that this is the smallest annual gain of the current economic expansion, which started back in the early months of 1961. It is also considerably lower than the 6% increases posted in 1965 and 1966. However, last year still yielded all-time highs for production, employment, and purchasing power.

Secretary Trowbridge explains that while government spending provided a strong stimulus to the economy last year, the main thrust for 1968 will come from nongovernment sectors of the economy. For instance, with em­ployment and wages on the upswing, consumer spending for goods and ser­vices will likely spurt $35 billion dur­ing the year. On the other hand, fur­ther increases in defense spending will likely be a good deal lower than those in the previous two years.

Turning to the industrial sector, the Secretary expects U.S. auto produc­tion to bounce back to 8.5 million units this year from the 7.4 million pro­duced in 1967. New construction should gain 89r to reach a new peak of $83.5 million for the year. Raw steel production should edge up 2.5% to 130 million tons and chemical ship­ments should continue their rise with a 6rr increment to approximately $43.5 billion.

The ASA and NICB surveys also ex­pect considerable gains in industrial production this year. The median figure of the ASA survey for the Fed­eral Reserve Index of industrial pro­duction for 1968 is 162. The NICB group puts it at 164.5. The index for 1967 is an estimated 157, compared with 156 in 1966. In recent weeks this index has been one of the indica­tions that the economy is finally snap­ping out of its sluggish pace of much of last year. In November it climbed to 159 after hovering near 155 for much of the summer.

Secretary Trowbridge claims the

3%-per-year increases in prices over the past two years do not represent a bad record of inflation for a period in which the economy has had to adjust to large military outlays. But he makes no specific predictions of price trends to be expected for this year. The ASA and NICB forecasters are bolder. The ASA group expects an­other 3% boost in the consumer price index, while NICB prognosticators pin the increase down to 3.4% for this year compared with 2.8% for 1967. The NICB survey also expects a 2.3% boost in the wholesale price index, up from 0.3% last year.

When it comes to corporate profits for 1968, Secretary Trowbridge says only that there should be "significant" gains. The economists in the two in­dependent surveys are not so sure. The ASA study pins pretax profits at $83 million—a 3.5% gain over last year. But with GNP up near 7% this would still represent a continuation of the profit squeeze.

The NICB survey also reflects un-happiness at the profit picture this year, rating growing pressure on profit margins as the most serious dilemma to be faced by businessmen in 1968. The survey states that higher business volume for the year is unlikely to offset rising labor costs, the prospect of higher taxes, the continuation of a buyers' market, and growing competi­tion from abroad in the wake of deval­uation.

Leermakers takes helm of ACS Corporation Associates

Dr. J. A. Leermakers, vice president of Eastman Kodak Co. and director of Kodak Research Laboratories, has taken the helm of ACS Corpora­tion Associates, succeeding Dr. R. W. Cairns. Dr. Cairns stepped down from the chairmanship of the Commit­tee on Corporation Associates when he assumed presidency of the American Chemical Society Jan. 1.

Completely revamped last year un­der the leadership of Dr. Cairns, the committee has been working to im­prove the channels of communication between the Society and the indus­trial community. It also has been ex­ploring ways in which the Corpora­tion Associates can serve the Society by constructive advice and action based on their industrial background and resources.

Several important problems will con­tinue to receive the close attention of the committee, Dr. Leermakers says. One matter of increasing concern is the relationship between industry and the universities and colleges. Through Corporation Associates, the new chair-

14 C&EN JAN. 8, 1968