The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-06-16
NATION LIVED
within MEANS
BEFORE CRASH
Immense Capacities Went
UnutiIized, Bookings
Survey Shows.
BY DANIEL M. KIDNEY
Times Staff Writer

yond her means in 1929, and it was
not doomed to the economic dis
aster that hit us.
Our economic society then lacked
almost 20 per cent of living up tc
its means.
We had immense production
capacities that were not utilized. II
consumption for our full capacity
had been available. a vast amount
of wealth could have been dis
tributed among the people.
These are conclusions reached
after a thorough study of the facts,
by the research staff of the Brook
ings Institution. First of the find
ingS are published in a volume en-
titled Americas Capacity to Pro-
duce."
Certainly our findings" says the
book, ''do not bear out the con-
tention of those who, in the midst
of the present depression, say that
we we're living in a FOOLS paradise
in 1929-that we were living beyond
our MEANS and that disaster had to
follow. Individuals were, of course,
living beyond their private means
as individuals always will in both
prosperity and depression. But the
nation was not. 81. Labor was not
being so driven as to impair either
health or morale. On the contrary
there was nearly 20 per cent of
reasonably available labor which was
not turned into the productive
stream. Our economic society lacked
almost 20 per cent of living up to
its means"
Experts Conduct Inquiry
The investigation was conducted
by DR.. Edwin G.. Nourse, director of
the Institute of Economics of the
Brookings institution, and five mem
bers of the staff, authorities in the
fields of mining, manufacturing,
transportation, agriculture, labor
and finance.
They found that utilization of
plant capacity could have been in
creased about 10 per cent in 1929,
which would have absorbed the
available labor and added $15,000,-
100000 to the national product.
Today these plants are on about a
so per cent production basis for in
dustry as whole, it is estimated.
What operation at full blast in
1929 would have meant is described
by the authors as follows:
Nineteen per cent increase in the
national product would have repre-
sented an added $15,00O,0O0,O00 This
would have permitted of enlarging
the budgets of 100000 families to
the extent of 81, each. 1t would
have enabled us to add goods and
services to an amount of $765 on
the 1929 price level to the consumer
qualifications of every family hav-
ing an income of $4,000 or less in
that year.
Sales Angle Answered
"We could have produced $6OS
worth of additional we'll being for
every family up to the $1,000 level.
Or we could have brought the 49,
100000 families whose incomes were
less than $4,000 all up to that level"
That no such distribution might
have been forthcoming had produc-
ton reached capacity is also
answered.
proved economic well-being would
not have been thus distributed in
inverse ratio to the size of the pre-
viouS income or at a fiat rate, we
might change the form of the COM
putation and say that it would per-
nit increasing all family incomes
below the $500 level by AZ per cent.
Presumably these groups would
be the chief beneticiaries of such an
increase in national production.
Finally, not to put our statement in
form which SmackS in any way at
all of redistribution of wealth, we
could say it would add $545 to the
income of every family of two or
more persons, or give $125 to every
man, woman and child N the coun-
try"
Varied Field Covered
The report deals in detail with
the research findings in agriculture,
coal and coke, petroleum, copper,
cement, manufacturing capacity,
food industries, textiles and cloth
ing, autos and tires, paper, printing
and publishing, metal industries,
machinery and industrial equip
ment, transportation, merchandise
ing, the national labor force, ade-
quacy of money and credit.
The conclusions are based on
summary of the whole productive
capacity of the nation
They found that the margin of
un-utilized plant capacity in the
fields of agriculture, mining, manu-
featuring and electric power utilities
did not expand during the period
1900 to 1880.
In single field, namely trans
portation, it appears that during
these three decades we created a
total volume of facilities materially
greater in proportion to utilization
than was to be found at the Begin
ming of the century," they con-
Guided.
Full Production Impossible
Difficulties of arousing people to
100 per cent production, even under
such great stimulus as war, is
pointed out and the conclusion
drawn:
Taking our economic world as a
practical going concern, we know
that sustained operation at 100 per
cent of capacity would be impos-
sible."
What economic planning may ex-
pect to encounter also is disclosed
when the researchers found:
1.-The demand for coal in 1929
was 2O0,O00,000 tons smaller than
might have been confidently pre-
dicted on the basis of a hundred
years experience down to 1915"
That there are 100000 too many
statesmen was another finding,
which was coupled with the S11ppeS-