Evening star., 1936-12-31
EXTRA DIVIDENDS
AND WAGE BOOSTS
WIDEN PROSPERITY
Depression Problems Open
Year - Boom Control
Talked at Close.
ERA OF BETTER FEELING
FOLLOWS LANDSLIDE
Popular Confidence Firm Despite
Economists Distrust of Many
Basic Factors.
BY FORREST H. GRAVES,

prOIltS ana tne plggeSt QlVlQenQ month
in history, recovery became a reality
TO be seen, touched, felt and enjoyed
by the great majority.
The year started with the problem
of keeping the recovery movement
alive; it closed with the problem Of
controlling boom. The early months
were chill with the menace Of a po-
litical campaign drawn on class lines;
the late months ushered in an EZRA
Of good feeling" And the biggest ex-
preston by voters in American po-
ntical history made hardly a ripple
on the business graphs.
Perhaps even more striking than
the change in statistics was the trans.
formation of public morale AS re-
Gently as Midspring the popular atti-
tude was one of whistling in the dark.
The "late depression" was a popular
phrase, but spoken with crossed
fingers. In Midsummer, however. the
public began to take prosperity at its
face value and from thence forward
definite boom psychology" began to
appear. 1t was not lessened, naturally,
by the deluge of wage increases,
bonuses and extra dividends that
cheered the year end.
Background Questioned.
The year closed with popular conf
dence firm and abundant. Econo.
miSts, however, are quick to express
distrust of many elements in the cur-
rent picture. They point to the re-
cent sharp rise in commodity prices
as an influence which may check the
present broad urge to buy. They point
to the unevenness Of the recovery:
automobile production is racing to-
ward its 1929 peak while general build.
ing construction, in spite of advances.
remains far below average; 1886 divi-
dends will almost equal those declared
in 1929, but 100000 workers are
without jobs. They point to the Gov.
ernment deficit, the vast amount Of
Federal money which still feeds the
consumption industries, the tre.
mendous credit base which has been
spread and which may be used to
finance feverish. unhealthy specula.
! ton in commodities and securities.
Many say, too, that wage and other
costs are outrunning prospective busi-
ness profits, that with the surplus tax
virtually forcing depletion of corporate
reserves at the year end, the expan-
sion of productive facilities that would
aid the worst depressed industries will
be indefinitely deferred.
How Much Is Left:
The question of the moment, then.
is ''how much is left?" Does another
abortive speculative boom impend that
will explode before large groups have
really tasted recovery?
1t does not seem likely. Many Of
the above elements may be regarded
as sound or unsound, according to
viewpoint. For its effect on the per.
manence Of our prosperity movement
perhaps most significant is the tre-
mendous increase in consumer income
which has taken place. In many ways
this furnishes happier augury than
would squirt in capital goods in ad-
vance Of a demand to make them
necessary.
So far as the unevenness of the re.
covery Is oncerned. that, too, seems
to portend only that those who declare
we are nearing the peak are sighting
from the wrong landmarks. History
repeats itself. but with extensive re-
visions. 1t seems quite obvious, for
example, that previous estimates of
the saturation point of the automobile
market will have to be revised. With
general wage and salary increases just
beginning, the auto makers produced
within 100000 units of the 1929 total.
Retail sales will come within 10 per
cent of the 1929 level, and If 1897
doesn't see all previous records
broken it will be surprising, indeed.
Steel has far wider markets than it
had six years ago; production is cur
rently at the best rate since Septem.
Der, 1929. although railroad buying
has hardly begun and the building in
dustry has not started to use steel In
quantity.
Refutes Pessimists.
L
10 per cent from 1885, the demand for
new and better houses has as yet only
been weakly implemented with efs
fective buying power. The huge util.
ity expansion programs Of 1929 and
1880 carried production facilities far
beyond the necessities of the time, but
these are already revealed as made.
quate and obsolete in many sections.
The steel and allied industries have
constructed new units this year to
meet new requirements, and other
manufacturers soon will find 1t eco.
nomic to add to producing capacity.
And, surplus tax or no. money can
and will be raised for plant extension,
where potential profits can be demon-
strated. The corporate surplus tax
may retard the movement, but it will
not halt 1t, particularly while money
remains on the bargain counter.
This brings us TO another point
which refutes the theory that. another
depression may strike Immediately to
blight our recovery in Its first bloom,
It is the prevailing plethora Of easy
money" It may be an embarrass-
ment of riches causing grave concern.
but the fact remains that history does
not record q depression period ever
setting in while money remained
cheap and plentiful And never was
n