Evening star., 1934-12-13
HUGE SHORTAGES
TO HASTEN RELIEF
$85, 900, 100000 Needs Of
Nation Cited in Bulletin
by Col. Ayres.
BY DAVID LAWRENCE.

Things wear out. This simple truth
Is responsible for a widely-growing
belief that the ending Of the depres-
sion may be accomplished by a con-
certed effort to replace $4,000, ,000, 900
of shortages accumulated in the last
five years.
Col. Leonard Ayres, economist, stat
istician and editor OF the Business
Bulletin issued by the Cleveland Trust
Co., has every year issued his predic-
tions and analyses for the succeeding
year, but at no time have his state
ments made more profound impress
sion than today, when he announces
that, at present prices, there are
shortages of $55,000 ,000, 900 in the
durable goods industries. $25,000, ,000,-
900 in the building and construction
industry and $4,000, 100000 more in
under-maintenance and needed
equipment of public utilities and rail-
roads"
The theory first expounded two
years ago by Col. Ayres led to the for
nation of the so-called Durable Goods
Committee, which laid before the
N. r. A. the possibilities of a drive
for unemployment based on capital
expenditures for plant and machinery
and similar items.
Consumer Purchasing Power.
The idea ran counter to a prevail
ing notion that America was over
produced and that its plant equip
ment was far in excess of the con-
sumner needs. Instead, the N. r. A..
operated on the plan of increasing
consumer purchasing power.
What Col. Ayres points out is that
there is no shortage in so-called con-
sumner goods at all and that most all
of the unemployed today owe their
unemployment to the fact that dur
able goods industries have been stag
nant.
Now, however. it is becoming ap-
parent that existing facilities are
wearing out and that a demand for
durable goods is coming. Col. Ayres
defines the different kinds of goods as
follows:
"All the producers make or raise
CiOilCL SOllSulllCA sOOuS vi oul
goods. The consumer goods are such
things as food and clothing, gasoline,
tobacco, soap, tires and a long list
of things made from textiles, paper,
leather and rubber. We use them
up and replace them relatively quickly.
We use almost as much of them in
hard times as we do when we are
prOSperOuS. For that reason the GUAM
titles Of them produced are not now
very far below normal, and there has
not been any great unemployment
among the producers of consumer
goods during the depression.
The great unsolved problem of the
depression is that of the unemploy-
ment among the makers of durable
goods. These goods are made of last
ing materials. They include build
ings, machinery, automobiles, furni-
ture. bridges, ships, locomotives, cars
and long list Of articles made of
the metals, lumber, stone, clay, glass
and cement. The demand for these
goods is elastic because their pur-
chase can always be postponed since
the goods are durable, and the exist
ing ones can be made to do service
for extended periods of tint" mo
Many Shortages Now.
Now. however, many shortages ex-
1st and many facilities have worn out.
The curtailment of expenditure in
durable goods began in 1929 and has
continued for more than five years
This is long time in which a Ma
tons plant facilities are held at a
standstill. The war period, 1t will be
recalled, caused a hiatus in building
which produced a housing shortage
that led in 1922 and 1923 to one of the
biggest cycles of construction activity
in the Nations history.
Col. Ayres thinks the accumulated
shortages would be made up in 10
years if the durable goods industries
operated at 25 per cent above their
normal capacity.
But why isn't that drive started?
The administration has hesitated until
the demand really appeared on the
horizon. 1t felt that the demand could
not be stimulated but would arise rat
urally. On the other hand, the money
needed to- finance durable goods pro-
duction usually comes out of the Ma
tion'S savings, to put it another way,
through the bond market or long-term
credits.
Just now, the long money
market is choked up by various OBJ
stacles. One is fear of tinkering
with monetary reform. Another is
the failure of the Government to cur
tail unproductive spending, especially
on unnecessary public works. third
is the blocking of the securities market
by the hampering legislation which is
far more restrictive than is necessary
for the original purpose, which was to
eliminate fraudulent fotations.
Uncertainties of Policy.
There's another fear, too, and that's
the uncertainties of the adminiStra-
tion's policy on labor costs and the
tendency to leave this to be battled
out on jungle war basis instead of
by program Of cooperation between
capital and labor.
1t is known that the problems of
long term financing are being given
considerable attention by the Roose-
welt administration. Such optimism
as prevails today about the upswing
for 1885, especially in the durable
goods industries, arises from a convic-
ton that the administration will see
in the durable goods situation an op-
portunity to put virtually all the un-
employed to work and thus gradually
cut down the relief bill of the Nation.
(Copyright 1934D