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Show How's Business? Here's Answer at a Glance The business year 1937 has been graphically set forth in five basic charts prepared for NEA Service and The Herald by John T. Flynn, noted writer on economic topics. The reader who will follow these will see exactly what has happened to business, why it has happened, and what may be expected in 19.5S. The captions beneath the chart have been written bv I'Tvnn. W Department Store Sales But in April, just when it should have soared upward, it faltered, declined and ended the ysar below the level of last year.. This struck a blow to production in building- material industries and generally sent a wave of fear through other producing- industries. It frightened frighten-ed business men and observers; but consumers, who do not pay much attention to such things, went on buying until the end of December, i iJ GO Basic Index Figure 100 150" Is 1923-1925 Average ho ; rp& 1 I M' I130- mM j II S 120 -eJZ To Dec. 1 40 I III I I I I lMf) 1931 19B2 1933 1934 1935 193fi 1937 70 Bank Debits a T) I , I I " s iL ifri- 201 I I VI 2 I I I I 1930 193J 1932 1933 1934 1935 1936 19:" 1. This chart pictures retail sales. It shows two important facts, (1) There has been a steady rise since 1933 in peaks and valleys; (2) Retail trade rose during 1937. This shows that consumers, consum-ers, in spite of the business recession, kept up their buying right up to the end of November and that the recession did not begin with the customers. 4. This is an important measure of business activity. Almost every business deal is reflected at some point in a .bank trnnsacl ion. Bank debits bank withdrawals have been rising since 1933. This chart reveals the singular fact that they begin to fall off in April. The Januaiy decline was nntural. They have been declining- ever since. They ended the year around the Christmas, 1934, level. 140 Industrial Production 1 'do0: a rjJ " 50 Basic Index Figure 100 40" I is 1923-1925 Average. 19la l!m lem 1933 1934 1935 193R 1Q37 2. This chart shows clearly that production started its upward movement in 1933 and kept on improving until May, 1937. The recession re-cession began in production in May, 1937. It has declined ever since. The year ended below the Christmas level. Why did production drop I before retail sales ? fl00 Security Financing Public and Private r00- y A I I o 500- f-1 400 , in i i . n o 300- i ' 200 "A-. Uuildinff Contracts Awarded 6001 I 1 1 I I I I 1 A V) 500 r'-1 V J ! s 400r mm 300 H A- 1 200 - T'))f . ."'"v-'- Private 1930 1931 J 932 1 933 1934 i 935 1 93fi 1937 5. This chart should be studied carefully. It (ells the remainder of the story. It is from the issue of new securities government ;ind corporation that new funds fiow into the business world. This chart ; shows the total of all slate, local, federal and private secuii ties issued is-sued each month. The volume increased each month and rose to its peak in the summer of 1936. If that had continued to rise the recovery re-covery might have continued. But a single glance will show by following the dotted line that for l'y months the volume has declined and !he decline has been heavy. Why? The answer to this is the answer an-swer to the whole riddle. Look ft the black spaces at thn hot I om of tin's chart. They represent private corporate financing. The rest indicate government financing - government deficits - - state and federal, fed-eral, mostly federal. See how private, financing has utterly failed. Before we can have revival we must have a revival of financing. Either private business must start financing operations or the gov- 1 ernment must. There is no alternative. This is the key to the future, . i 3. This partly explains why production dropped before retail-sales. retail-sales. This chart shows how building construction has failed to develop. de-velop. It appeared to be improving since 1933. But the improvement improve-ment was slight. The highest point was a little over $320,000,000 in one month. This is less than half of the building volume of prosperous pros-perous periods. And most of this, you will see, was public, not private building. Private building began a slight improvement in 1935. At the beginning of 1937 is seemed headed for a burst of activity. |