The Waterbury Democrat., 1933-10-06
BY THEODORE M. KNAPPEN (From Wall Street Maguzlnc)

&
 (From Wall Street Magazlnc)
 It's a race between consumption and industrial production value. Production Is again falling off in volume but rising in price. Con sumption Is increasing but there Is still big spread between buying power and the value of factory output. Factory output in August was 6S.1 per cent higher in value than In March, but the payroll in- dex was only 55.4 higher. Gross agricultural income for the year will probably not be more than 20 per cont greater than In 1892. when there was no net.
 Happily, the industrial disparity Is decreasing. In July factory value of output was 75.1 per cent higher than in March, while payrolls had increased only 35.2. The volume of industrial production declined about 10 per cent in August over July whilst payrolls gained 1l.6. But volume of production cannot decline very far without reducing employment.
 The problem is to keep up pro- duction at level prices for Il time and simultaneously increase cop- sun ptiois N9o hSNt VIZ sa1'S embarking on Il high pressure campaign to increase consumption. John Citizen Is told to spend his way back to teeming prosperity. The central urge of tho campaign Is to buy now because prices are going to increase.
 Tho campaign for the stimula- ton of consumption has the ad- vantage of starting before the drive for increased employment has worn itself out. There Is no Knowing just what 1t has accom- plished. The total increase in cm- ploymcnt from March to August in tho thirty groups surveyed by the department of labor Is officially put at 2,200,000. Tho increase in August was 750,000, and 1t is in that figure that MIRA results must be looked for. Further increases due to It's work may be expected in Septemebr, unless 1t turns out to be m approximate failure. There Is, however, little expectation now that the original calculation of six million men back to work by the end of october will be realized. far, Is getting along without the solid expansion of tho basic indus-
 It Is evident that the revivai, 50 tries that has in tho past been feature of business recovery. Morc- over, thcro is but slight prospect of any marked improvement for the rest of this year outside Of the effect of public works. Credit ana capital conditions arc both ad- verse. Improvement of business TOT the present must continue to de- pend mainly on the expansion or demand Ior consumers goods.
 The knotty problem the N II A is now tackling is that of increas- consumption and keeping produc- ton stationary or increasing in volume without m increase of to- tal value. If that cun not be done. 1t holds that recovery will experience a deplorable setback. It's efforts up to this time have been concentrated on the increase Of buying power of the commercial and industrial groups. Whether it is entitled to tho credit or not, the fact Is that payrolls have gained splcndidly. But the increase in employment Is by no means sen- sational, and 1t begins to be doubt tul whether 1t can do much more to stimulate rc-employmcnt.
 it can DC gwen uui:mlted credit for changing public psychology and breaking tho ruinous downward spiral of decreasing employment and decreasing payrolls. The let up of the last two months in pro- ductlon Is playing into it's program of increasing payrolls relative to production value. But the increase in employment since March has been moro due to the expansion of employment from increase produce ton than from the efforts of the MIRA. Production Is the source of wages. It can not be allowed to decline far in volume if employ mcnt is to increase. What Is hoped for is such an increase in autumn consumption that production can be increased without price in- creases. This is theoretically feas- ible, for industry can increase its profits without raising prices as it's output approaches capacity. But not if labor costs increase shorply.
 That Is what organized labor is now insisting upon. It Is not con- tent with the gains the MIRA move- ment has brought to it, largely with the self-denying concurrence of employers, but is insisting on arbi- trary increases in labor's share of production. The country seethcs with strikes.
 Capital is getting tired of financ- ing recovery through the defer- ment of profits, to some happy time coming.
 Labor refuses to help.
 The buck is now to be passed to consumers
 They are to be appealed to, to carry the load of readjustment by spending freely. But the burden of that appeal is to he the urge to buy now because prices will in- crease and yet the NRA wants no specific advance in merchandise prices. What it counts on is a general elevation Of price levels through credit or money imitation -on the realization of tho prcsi- dents promise to put price levels