The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-08-01
NEW SPENDING
SEEN HELPING
LIGHT INDUSTRY
Heavy Trades Not Likely to
Get Aid Due to Emphasis
on Jobs.
BY A. l.. JACKSON
Editor Economics Statistics, Inc.

NEW YORK, Aug. There was
an irregular upward trend in
emergency spending beginning in
January and extending through
June. An unusually sharp advance
took place in late June, and many
people hailed this increase as an
indication of more extended
pump printing by the government.
However, this unusually high level
of spending during the last week Of
June and early July proved to be of
a temporary nature only. 1t was
apparently occaSioned by the in
creased expenditures of the FERA,
which was caused by the unusual
heavy payments that naturally oc-
cur at the close Of The fiscal year.
During the last three weeks the
total emergency spending has de-
clined considerably. At present it is
back to the low level which pre-
vailed in late May and early June.
Spending Should Increase
1t is quite generally expected that
emergency spending will be in
creased at a faster rate over the
next few months, and this in turn
is expected to stimulate business ac-
tivity. However, it should be noted
that out of the $4,800,000 900 works
relief appropriation the FERA is
the only agency which has spent
any stable proportion of the funds
allotted.
Allegations of funds allotted for
public and civil works up to July 8
totaled 81 100000.
Due to the more favorable wealth
er conditions and improved Admin
iStration facilities, allotments are
being increased at slightly faster
pace; but the money allotted has
not been spent. 1t seems that the
process of spending will continue to
be slow, especially in the case of
public works, where such problems
as wage rates, material costs, ETC.,
have to be SO closely considered.
There should be a seasonal increase
in public works spending during the
next few months, particularly in
the highway, river and harbor work,
and other such enterprises. This
would not be sufficient to have
effect on business during the next
two months.
Purchasing Power Higher
It should be noted that the effec-
tive purchasing power created
through government spending in
creased quite sharply in June over
May but, as is indicated by the
sharp decline in the first three
weeks of July, the total effective
purchasing power for the month of
July will be below any month of
the past year. With there being a
tendency now, however, for expen-
ditures through the CCC and for
highway, river and harbor projects,
etc, to be increased effective pur-
chasing power created during Au
gust and September should be con-
siderably higher than in July.
In this connection, about $780,
100000 of new funds have been
transferred by the Commodity
Credit Corp. to its subsidiaries,
which over the next few months will
tend to increase the amount loaned
to farmers. This undoubtedly will
be of a seasonal nature and only
favorably affect purchasing power
for short period.
The stimulus to business which will
be afforded by the gains expected III
emergency spending will be felt for
the most part among the consum-
ers goods industries. Because of the
change in the spending policy of the
government, wherein projects are
selected so that the largest amount
of employment can be made, and
with the tendency to make few al
lotments where large material pur-
chases are necessary, the capital
goods industries are not likely to
receive much aid