The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-07
BY HERBERT B. DORAU

ID d. OOnAO
Careful and competent economists
are cautious about drawing conclu-
sions as to the distribution of our
national wealth and income. Even
after extended study of the most
reliable facts. experienced students
regard their findings as tentative
and approximate. This is ss it
should be in dealing with facts so
difficult of accurate ascertainment,
and so dangerous to social solidarity.
particularly in times such as these.
Unfortunately, similar restraint
does not characterize all public ut
terances dealing with this difficult
question as to how our wealth. and
income are divided, and even more
unfortunately the public is not in a
position or disposed to recognize au-
thoritative conclusions. 1t is report
ed that cabinet member recently
stated that 2 per cent of the people
own 80 per cent of the wealth of the
United States.
Retaliation Difficult
From another source we are told
that per cent Of the people own so
per cent of the wealth. 1t is diff
cult to refute such statements since
there is no official or authoritative
source of facts from which such con-
illusions legitimately can be drawn.
We know little enough about the
distribution of income, and unfortu-
nately even less about the distribu-
ton of wealth. Certainly the evil
dence is insufficient to justify such
conclusions.
The public is eXcusably confused
and naturally believe the statements
that are in line with what, at the
moment, they would like to believe
is true. 1t is doubtful whether any
great number of casual readers even
clearly distinguish between the dis
tribution of wealth and the distribu-
ton of income. In addition to dis
tinguishing between the annual flow
of income and the fund of accumu-
lated wealth it is necessary to un-
derstand the difference between the
ownership of wealth and control of
wealth.
Control Centralized
The modern corporation and
highly developed credit system make
it possible to control much more
than one owns. While this is highly
advantageous and likely to create
problems of another sort, there is,
however, no necessary direct rela-
tionship to the distribution of the
ownership of wealth.
The way in which the total ma
tional income of a people is dis
tributed is far more important than
the way in which the accumulated
fund of wealth is distributed.
Confusion Prevalent
1t is unfortunate, however, that
the layman can be led to confuse
these three measures and to attach
undue significance to the less i'm
portant This is no doubt due to the
fact that the more striking state
ment can be made about concentra-
ton of control and the distribution
of ownership and because the worst
impression is carried over to apply
to the measure of the greatest i'm
portance, namely, the distribution of
income.
In recent estimate of the dis
tribution Of income, Colonel Leonard
V. Ayres finds that 10 per cent of
the people probably obtained as
much as 34.6 per cent of the total
income, while so per cent obtained
74.6 per cent of the total income.
One aspect of income distribution.
which is rarely recognized, is the
fact that the same people do not
necessarily for long appear in the
same classification. An average dis
tribution over a five or ten-year
period or through the ups and downs
Of business cycle would no doubt
disclose very different picture.
Income Most Vital
In Americas Capacity to Con-
sumo" recently published by the
Brooklyn Institution, the authors
after careful analysis concluded that
30 per cent of our national income
went to reward labor of all classes.
and 20 per cent to the reward of
past savings, as return for the use
Of capital. A little simple mathe-
mates will demonstrate that the
important problem still is the distri-
button of currently earned income,
no matter how unevenly ownership
or control Of the result of past saw
ings may be distributed.
Income is better measure of
economic position and prosperity
than wealth. Income can give sat-
isfaction directly; wealth, in a large
way, affords only the means of pro-