Show ARE WE VE REALLY COMING fING BACK BACI H Recovery Was Vas Steady in 1936 hut but Puzzlers Like Unemployment j Recurring Deficits and Farm Surplus Must lust Be Solved I s i i ti t ji 1 tr F t j 4 t tf Lt ff f N 1929 One 1929 One of the busiest spots In Inthe Inthe the world as IS stocks soared to enbe- enbe unbelievable unbelievable heights In the great boom was Wall the New York Stock Exchange I where a man could become a millionaire mil on paper one Due dB day and a pauper not on paper the next Dy By WILLIAM C. C UTLEY FACTORIES are arc smoking JP again carriers are busy and we have just passed a Christmas season which may have been the biggest holiday business spurt of all time even including the height of the pre-depression pre boom As we enter the new year we find industry at its highest point since 1929 national income having risen toan to toan an aa estimated 60 CO billions of dollars or I more the largest in five lve or six years and a general relieving of the tension which holds hold mens men's nerves during an extended extend cd stretch of hard times For For one thing In the past year the tte nation was not temporarily hoaxed by business flurries which seem eem to indicate that recovery had set to subside again and leave the populace disappointed The movement toward normalcy has been pretty steady and seems t to have at last spread over the base of the entire economic structure structure truc ture Cure until it has touched touche every part of it Only time will tell whether as some lame close observers believe the revival is inflationary and beyond the measure created by demand At least there are three major problems problems lems still tIll confronting us There were In September according accordIng accord accord- Ing to the National Industrial Conference Conference Con Con- ference board nearly persons per sons son still tIlI out of work Production Indexes Rise The deficit of the federal government government government govern govern- ment Is increasing at the rate of three or four billions a year Under normal weather conditions condi condl If H if we should enjoy them during dunIng dun dur ing 1937 we 1937 we will be faced with the agricultural surplus resulting from the cultivation of 30 or 40 million acres more than we need The production index of the Federal Fed eral Reserve board for October shows that industry has reached a level nearly equal to the average for or 1928 making the necessary allowance al al- lowance for normal seasonal trends It does not however take Into consideration con the fact that we have a population greater by today to- to Jay day than we had In 1928 1923 If allowance allow ance ante Is made for this the production produce tion Index is about 02 per cent of the level of 1928 Dut But in 1932 and 1933 it was only half halt that of 1928 1923 It said laid that the hav heavy Industries which make capital goods are far tar behind but even they are picking pick ing fag up Steel the barometer of 01 these Industries climbed from 41 per cent of production capacity In June 1933 1935 to 70 per cent capacity for June 1936 or only about 12 per percent percent percent cent under the tile boom figure f Absorbing the Unemployed The semi durable industries which make goods requiring some lome considerable Investment by the fhe consumer con sumac sumer led the upswing Among these are the automobile Industry which it Is estimated produced cars cu more than in an any year lear except 1929 and the electric refrigerator industry whose sales Illes reached a new all time all peak Furniture Furniture Furniture Fur Fur- household appliances and others followed the trend The consumption goods Industries Indus tries trie producers of leather foods textiles etc are experiencing who what t might be called almost boom times times- Employment is not without hope There ere are today at et least less leas unemployed than there were a athe at atthe atthe t the low point of o March 1933 The They y How Reserve Board Looks at Recovery Th The following folling Index index supplied supplied sup sup- I plied by the Federal Federa Reserve board show how conditions today today today to to- day compare with those of 1932 1032 at the bottom of the depression depression depression de de- AnI Oct 36 1932 Industrial Prods 64 61 Construction 56 56 28 Factory 91 66 CG Factory payrolls 89 47 41 Car Loadings 73 56 Dept Store Sales 00 90 69 Common Stocks 48 The above figures indicate the degree of recovery through last October When November and December figures are released released released re re- leased it is virtually certain that they will show a continuation continua continua- continuation tion of the upward trend are the victims of an ever ing population as well as increased efficiency in industry The consumption goods industries otter offer little in the way of Increased employment although they will absorb absorb ab al a few in the mild expansion I which are forthcoming Semi Semi durable durable consumption goods industries the Industries the automobiles refrigerators refrigerators etc are are are working at just lust about peak now to supply a demand which has accumulated over a few years They can be expected to contribute little toward the relief of unemployment The one avenue of hope seems tobe to tobe tobe be the heavy industries where there is still room for a good deal of ex ex- ex Especially cheering is the progress which is apparently being made in the building Industries which will sooner or later have to begin correcting the large housing shortage Since 1929 there had been little modernization and renovation of factories and plants This cannot keep up forever or even for very long for replacements would be needed even to keep up the restricted restricted re reo production of depression business and to meet the added needs of an Increased population population- Si U Billion Debt The unemployment problem is not as serious as it appears upon the surface for even in normal times there are some If U the present trends continue con conS we should soon loon approach this figure Indeed there are some experts experts experts ex who predict a labor shortage shortage short short- age a few years from now Of real concern is the part of recovery recovery recovery re re- covery artificial in character because because because be be- cause it is based upon the extraordinary extraordinary spending of the government govern govern- I ment men Five per cent of the national income today is coming out of government gov emment bonds a situation which if 11 continued Is hardly sound This brings us to the problem of reducing the federal deficit The national debt of about 34 billions bU bil lions is some 8 billions over the old old- time 1919 high Interest rates are lower so that today the cost of carrying this debt is actually about 20 0 per cent lower than the cost of carrying the smaller debt in the years after the war Despite the tact fact that the debt could be raised to 40 billions without necessitating greater Interest payments pay ments than the war post-war debt dim dim- cult credit conditions eventually face governments which do to not balance bal ance their books When credit collapses col lapses prices go up quickly conversely con savings investments Insurance ance and real wages hit the skids It Ie is true Crue however that as employment em conditions Improve the necessity for government spending decreases while on the other hand the added recovery recover brings higher tax collections There are some optimists op op- who Mho expect sufficient continuation continuation contin contino of recovery to Co permit the balancing of the budget within the year Farmers Face Surplus The farmer from the point of Income In n come is better off ort than at any time tim e since 1929 If the fall faU of prices inthe Inthe In Inthe the things he must bu buy is consid ered Income from farm products ta tor for 1936 is to estimated at L r ro o I y x ifs V 1932 One 1932 One of or the aftermaths of the great Teat crash of or 1929 the jobless army bound tp t fight for a meager existence against terrific odds and discouraging circumstances 1937 1937 Manufacturing l plants once more boom as a new recovery gets underway under way tt There is an improving demand for farm products but it is not enough to take care of the surplus which would occur should there be a cessation cessation cessa cessa- tion of the tho summer The production of American farms is based upon an export market which has disappeared and a feed market which is disappearing with Old Dob Dob- bin If It the nation were to allow com corn cornmon common mon man econom economic c forces to work until they had eliminated the surplus farmers the fall in prices would be so disastrous disastrous to all f farmers that ht It i it t would seriously hurt industry an and d recovery New experiments in crop control such as the defunct AAA seem th the e only answer to the possible sur sur- plus And they are sure to bring g problems of their own as we have well seen in the last year or two What What can can be done to recoup some recoup some e of the vanishing export markets remains remains re reo mains to be seen It appears at this s time that a return to high tariff policies pol pot would be disastrous to cotton fruit and tobacco farmers as well as to certain manufacturers an and d producers of ol mineral minerai products Mr Hulls Hull's reciprocal trade treaties with th which we are now experimenting have so far effected but slight improvement im provement What If It War Breaks Out OatT It may be that thaC the present boo boom m will continue and get out of hanas hand han handas d as the past booms have resulting g in a new depression The tw two checks ordinarily effective in cur curIng curbIng curbing curb curb- b br ing the momentum of a boom after r real demand has been fulfilled are e tightening credit and soaring interest Interest inter est rates But today we have a new w situation With half hall the worlds world's supply sup ply of gold we have the base for r unlimited credit expansion and the e government is succeeding in keepIng keep keep- ing interest rates down in order t to carry the huge national debt a as s cheaply as possible The last boom and the depression n which followed it are largely traceable traceable trace able to the World war Should another another an other great war break out out and and this tha a seems seams Il mS not unlikely in the face o of f conditions in the tile Eastern hemisphere hems hemi sphere sphere sphere-it it will take all the brainand brains brain s and courage of the government an and d of business leaders to prevent another another an other vicious business cycle Meanwhile statistics indicate tha that the average family has not found i it t any easier to live during the las last t few months of recovery In th the e third quarter of 1936 payrolls payroll s dropped a little mUe while the cost of living continued to gain according g to a survey made by the Nor Northwestern North th western National Life Insurance e company The average family earning an and d spending a month in 1933 sa saw w its monthly Income rise more tha than n 16 in the next two and one one halt ha It to years by the second quater qua r ter of 1936 the survey reveals Due Du e to the accompanying rise in prices it then cost 1338 per month to support the same ame scale of living which only required to pay forat for forat forat at 1933 levels leaving a modest gain of 2 89 in the family pocketbook pocket pocket- book as surplus of income over out go 0 In the ne next t three months how bow however ever the cost of maintaining the same lame scale cale of living rose another two dollars to while the family's family monthly earnings declined reducing the average house holds hold's Income to thus turnIng turn turn- Ing tag the previous surplus Into a deft cit of C e Western Newspaper Union |