The Washington times., 1934-01-27
All 7 D INCREASE
IN '34LIKELY,
SAYS HANEY
Workers and Farmers Have
More Cash; Exchange
Rate Aids Exports
BY LEWIS HANEY
(Professor Of Econimics, New York
University

professor Of Econlmics, New York
University
Current estimates as to the TO-
tai production Of passenger cars
and trucks in 1884 are running
from 2.4O0, 900 up to 100000.
This represents y large increase.
The output in 1888 was about
100000. And in the low year,
1881, only 100000 units we're
turned out.
Whether the estimates for the
new year are realized fully or not,
all this bears striking evidence to
one great fact. namely, that in
dividual initiative is by no means
dead. It shows conclusively that
all we need to stimulate business
is to give business men chance.
Makers Sec Increase
The automobile business recov.
cred and expanded while some
men hesitated and bemoaned
what they call "the vicious spiral
Of deflation."
It seems not unlikely that at
least the lower of the estimates
may be attained in 1884.
Certainly the shrewd automo-
bile manufacturers are convinced
Of this, for they have gone to
enormous expense to bring out
the new models. One of the lead
ing companies has so changed its
cars that entirely new methods Of
assembly are required.
Certainly, too, the new cars are
calculated to stimulate demand.
In fact so many changes have
been made that, to some extent,
the 1884 cars are the equivalent
of a new product. Great I'M
provements in comfort, speed,
and safety are promised.
The increased use of stream
lining" means reduced wind re-
sistance. Much more rigid body
construction is general. Greater
ease of handling at high speeds
is assured.
Old Cars Older
Automobile men reason with
apparent logic that both obso-
lescence and wear have produced
a great potential demand. Obvi-
ously, the great changes in de-
sign are making old cars seem
older.
But more than that, it is esti-
mated that of the 20,000,00O cars
now in use, about half are more
than five years old. Replace
ments have been subnormal dur
ing the depression, and probably
were only about half as numer-
Gus last year as in 1929.
Thus many people should be
wanting a new car, and at the
same time will be finding that
the old one is pretty far gone
both out of date and worn out.
The Government Is spending
so much money for relief ana
stimulation of business that funds
will be available in many cases.
Farmers are already buying cars
with Government cotton checks"
and corn checks" Many more
laborers are employed in one way
or another than last year.
It also seems reasonable to be-
lieve that the depreciation Of the
dollar in foreign exchange will
enable foreigners to buy Amer:
can automobiles more cheaplT
and thus stimulate exports.
Some Higher
The prices of 1884 automobiles
are going to be a little higher,
and "trade in" values for used
cars will he lower. But buyers
will be getting more car for their
money.
Anyhow, the same NRA rules
which increase manufacturing eX-
penses and reduce trade-in allow
ances are probably giving labor.
erS more money to spend and
more time to ride.
The prospective prosperity Of
the leading motor companies
augurs well for many other in
duStries. For example, the auto
mobile industry was the leading
steel consumer In 1888, taking 20
per cent Of the total. The 1884
car. because Of its greater length
and strength, will use more steel
than the 1888 model.
Similarly, automobile prosperity
spreads to glass. rubber, copper,
lead and textile manufacturers.
The individual initiative and
resourcefulness Of the captains Of
the automobile industry have been
a bright spot in this depression.
May they prospect
IF nTn AFlHPRR