Evening star., 1935-12-28
A Billion i'm Equipment.

A report has just been issued by the
National Machine Tools Builders Associ-
alton which indicates that recovery" is
in progress unmistakably in one Of the
most important fields of industry, which
in turn denotes large expansion in the
major producing industries of the
country. A survey of 500 companies in
all parts of the country reveals that
modernization and expansion projects
costing $938,0O0,000 have been initiated
during the past six months by large
tries have for several years been running
on their old plants with steady deteriora-
ton of equipment. The revival in whole
sale and retail trade which has been
noticeable in the past year has resulted
in q severe strain upon production
facilities, thus depleted. It has been
frequently observed that as soon as as
surance was felt by manufacturers of
the recovery of purchasing power on the
part of the consuming public the indus
tries would be compelled to modernize
and re-equip their plants with the effect
of large additions to employment in the
basic manufacturing lines.
This present survey shows that the
steel industry leads in this program Of
re-equipment with an expenditure of
$25O,0O0,000, with the automotive industry
second, spending $10O,O 900. Geograph-
ically the Middle West has led with
an expenditure of $531 100000, the East
second with $2O1,OOO,OO0, the South
third with s11S,OOO,OOO, and the West
fourth with $88OOO,OOO. These figures, the
report states, offer ''the most factual
testimony yet unearthed that the cur
rent business revival is assuming long
range proportions"
1t is noted that while the figure of
almost billion dollars spent in plant
improvement and equipment may seem
modest in these days of astronomical
expenditures the significance becomes
more apparent when it is recalled that
during the past four years announce
ments of machinery purchases as low as
$50,000 were hailed as business news of
magnitude. Today expenditures of mil
lion or more by single company are
approaching the commonplace.
The fact that the Middle West leads
this program of plant expenditures may
possibly be related to the very large out
pouring of Federal relief funds in one
form or another during the past two
years in that region. It may be, there
fore, that this is merely a turnover of
these funds and that suspension of re-
lief outlays will react upon industry un-
favorably and check the development
that this survey now indicates. However,
on the other hand, it is possible that
this is an effective pump printing" lead
ing to a substantial and continued re-
covery regardless of the continuance of
doles and expedient allotments of an
emergency character. The judgment of
economic observers has favored the latter
view. The $938000,00O spent in plant
restoration and development has un-
doubtedly caused large measure of re-
employment, in turn leading to further
additions to the ranks of the workers
in lines of manufacture thus re-equipped.
The whole turnover goes far beyond the
billion point indicated by the survey. The
additions to the pay rolls in the produc-
ing plants which directly supply the GUS
toner trade are continuous. 1t is at
least assured that for another season of
commodity buying the employment per-
centage in the country will be higher
than for several years past.