Evening star., 1935-01-27
National Income Shows
Business Improvement
BY HARDEN COLFAX.

Most of the elements involved In
national income, if looked upon as
indicators of business ard industrial
activity, reflect a basic business i'm
provement.
This is one Of the conclusions Of the
study of national income in 1888, as
compared with 1882, preliminary esti-
mates of which have just been COM
pleted by the Department of Com
merce. These elements. which pro-
vide the business man with at least
little encouragement, according to
Robert F. Martin of the division OF
economic research, are: Reduction in
the draft that business has made
upon its accumulated surplus and
other assets to meet current expenses
and a sharp increase in the incomes
of farmers.
At the same time. Mr. Martin notes
"a continuation of the downward
trend in salaries, interest, dividends
and net rents and royalties" J." This
downward trend resulted in a decline
of 6 per cent in current income paid
! out to individuals by business gen.
orally from the figures of 1882.
This study of national income was
begun a couple of years ago with the
object of determining just how 8
worldwide depression affects the flow
of purchasing power. The study was
made by the Bureau of Foreign ano
Domestic Commerce in cooperation
with the National Bureau of Economic
Research. The first figures were pub
lished in the form of Senate docu-
ment and were used by the Senate
in consideration of pending tax leg
iSlation.
The preliminary figures for 1913;
show that incomes paid out to indi-
viduals in that year amounted to ap'
proximately AZ billion dollars, or three
billion below the comparable figure
for 1892. This marked the fourth
successive annual drop in income PAID
out-a total decline of 43 per cent
from 1929 to 1888. The estimates
indicate that the income produced IN
1893 was in round figures some two
billion dollars above that for 1882
but approximately four billion below
the income paid out in 1888.
Some idea of the significance OF
these changes may be obtained In
comparing the index Of current In
come with that of living costs. Ac-
cording to the National Industrial
Conference Board, the cost-of-liVlng
index declined some Is per cent from
1929 to 1893, indicating that, roughly,
the same necessities could be obtained
in 1888 with an income that was one
quarter less than in 1929. Further
more, since income paid out declined
some 43 per cent during this four
wear period, as a consequence there
has been a radical decrease in the
volume of goods and services that
could be obtained with the income
received in 1888 as compared with
1929.
In general. the results Of this study
have confirmed the conclusion that
those elements of income and pur-
chasing power that are most flexible
and show the greatest increase in
times of rising business activity are
the same as those which decline most
rapidly in times of depression. Con-
yersely, those that decline the most
in a slump are those that show the
greatest and quickest pickup; that
is to say, these factors retain their
flexibilty at the bottom of the de-
cline as well as at the top.
y X
As applied to income payments, 1t
has been found that wages suffer very
much when industry is curtailed and
increase rapidly when business picks
up. Salaries, on the other hand, NOV
ing on an annual basis, do not in