The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-07-20
Maintaining the Business
Improvement
(RailWay Age)

Improvement
railway Age)
Many business men are asking why
business is improving, and whether il
will continue to improve.
AS the improvement actually began
10 months ago, it has plainly been
due largely to the same general eco
nomic causes which terminated all
previous depressions. AS it has been
most rapid within recent months, it
undoubtedly has been due, in con-
siderable measure, to prospective in
flation and increased buying of COM
modities to anticipate advances in
commodity prices.
Apprehension is expressed in high
places in Washington lest the pro-
| duction of many commodities will ex-
coed the demand for them and that
the resulting increase in inventories
will be followed by declines in the
production and shipment of such
commodities. If this is to be avoid
ed, the demand for raw materials and
finished products must be maintain
ed and increased by increasing the
demand for both capital goods and
consumers goods. It Is especially
necessary to increase the demand for
and production of capital goods-that
IS, equipment used in the production
and transportation of consumers
goods-the decline of which was
greatest during the depression.
The governments public works pro-
gram is expected by its promoters
largely to maintain and increase pur-
chasing power and the demand for
commodities. The decline of pro-
duction, commerce, earnings and en-
ployment in private business caused
the depression, however; the decline
of activity and employment in pri-
vate business was many times greater
than any increase in activity and
| employment which will or can be
caused by expenditures upon public
works; the taxes for paying for pub
lie works must all be derived. direct
ly or indirectly, from private bust
ness; and, therefore, only a general
revival Of private business will SUBJ
stantially relieve unemployment, re-
store prosperity and provide the
means for paying for public works.
The real problem of continuing the
restoration of prosperity Is con-
sequently the problem Of finding and
adopting means that will increase
production, commerce and employ
ment in private business.
AS the student of economics and
business in their broader aspects sur
veys the developments that have
been occurring, he can hardly fail to
be impressed by the fact that the ma
TONS great railroad industry has
thus far contributed almost nothing
to economic recovery excepting by
satisfactorily handling an increasing
volume of traffic. It has often been
said that the railways are directly
and indirectly such large employers
Of labor and purchasers Of raw mate
rails and manufactured products,
that normal employing and purchas-
| ing by them is necessary to the main
tenance or restoration OF prosperity.
The expenditures of the railways for
improvements and maintenance in
1882 were $l,8OO,OOO,OOO less than in
1929-an annual decline in the expen.
ditureS Of single industry one-hal1
as great as the entire projected pub
lie works program of the government
It Is essential to the restoration of
prosperity that increases of employ.
ment and buying shall be well bal
anced-that all important industries
shall contribute to them proportion
ately. Therefore, the improvement
Of general business can hardly fail to
slacken unless 1t Is soon supported
by a substantial increase Of railroad
employment and buying.
The increase in their gross earnings
and net operating income that are
occurring would normally bring many
railways back into the market as
larger employers and buyers in a
comparatively short time. Some al
ready are making earnings largely In
excess Of their fixed charges and
others soon will be.
Probably, however, there are nu
merous railways which will be un-
able for some months, at least, sub
stantially to increase their employ
ment and buying by means of theil
increased earnings and the improved
credit which increased earnings vii
! gradually create. It is understood
that the government is willing tc
loan money to the railways with
which to do needed improvement and
maintenance work, and unquestion-
ably the effects produced upon gen
eral business, both in the near future
and in the long run by the loanins
Of money to the railways on easy
terms and their expenditure of it
would be better than the effects Of
the expenditure of an equal amount
upon public works of dubious eco
nomlc necessity and value. I'm.
fortunately, the governments policie:
OF expenditures upon, public works
and of making loans to the railways
are highly inconsistent. The slim.
ulation Of needed railway expendi.
lures for labor, equipment and mate.
rails by loans Of public money woul<
be one Of the most effective mean
the government could adopt to main
tain and stimulate the increase il
general business, but if the govern
ment wants the railways to aid it al
they can in reviving business,
should show willingness to max
loans to them on easier and more &C
ceptable terms than it has yet of
fered.
The hardness of the metal in too,
/ A-