The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1936-05-01
.Ts PROSPERITY HERE?"

-
~ T1C' +bav come true," says Prof Scout
HIon-.;roe in editorial article concerning tne
o,ISirase cycles for the Federated FreSS.
oIUo live under an economic system that
,,oo hoon ridino the ups and downs OF the
i,r'S cycle for more than century. AZ
+;Ionc 4 is nr-on the heights OF prosperity
II,,s # is down-in the depths OF depEes-
sion These UPS and downs commune CoGay
&c thew have in the past, but their heignt'
~ or denth and their durations are maCCerS
of speculation. ~
at the moment economists all over
49, I1o;+od states are guessing about the
Ianoth Of the next prosperity era Perhaps
Il would be better to say, present prosperity
ora because there are signs which Suggest
that the high point of the present reVNai
has been reached. A..
cWhatY' cry the bankrupt farmers the
unennloved millions and the tutureleSS
Youth, 'The prosperity period can't eno
vet. It hasn't even begun.
''Weu, that is just the question.
PROSPERITY gave way to recession III
limo 1929 The recession lasted three
Years until the spring of 1892. Then came
wear of depression, to the summer OIL
1888. followed by three years OF revival, 10
the spring of 1886. There is no known Ia"
of the business cycle, but on the whole Che
cycles balance fairly well. Three years Oh
recession; year of depression; and three
wears of revival make up such balance
and from this point of view, the summer
of 1896 might be thought of as the prosper
itv crest of the present business cycle II
# is. then production should continue at It's
present levels for a period and then fall
away in q new recession.
'There are good historical reasons for
thinking in such terms. Each major busl-
ness cycle is ordinarily followed by one or
more minor cycles Since the 1929-l936
cycle was of major proportions 1T will PROB
ably be followed by a minor cycle-that is,
one in which production levels will not rise
so high as they rose in 1929, nor fall so
low as they fell in 1882, and one, more
over. that will be of comparatively short
duration-twO or three years in place OF
six or seven.
Should such anticipation be realized,
the production levels of 1886 may be main
tanned for few months, and should then
give way to a new downward trend. Under
these circumstances, the present business
cycle crest would be relatively low and rel
atively short Prosperity would penetrate
only to the upper economic groups. The
masses would hear about it through the
newsreel or the radio.
'This analysis is supported by a num-
, Der of significant facts. First, production
levels seemed to have reached plateau IL
+ January, 1886. The automobile industry
which was responsible for large amount
of the revival in 1884 and 1886, showed /;
e heavy slump in production at the end O
: 1885.
v 1.-The numbers of unemployed as re
q ported by the American Federation of La
v Dor were 1,229,OOO greater in January, 1873
O than in December, 1885. Wholesale and re
u tail sales show declines in the early week
of 1886. Since government spending ha
% been q major element in economic revive
~ the present policy of "tapering off" shoul
II lower both production and sales
~ Similar storm signals appeared in tn
~ spring and early summer of 1929. The
% we're ignored until the spectacular stoc
1T market collapse of October. The stoc
- market is still moving up in April, 1913
al but if the production basis for revival
- weakened or destroyed, it will be only
matter of weeks or months before the ne
recession will be slashing stock prices :
in it did in the autumn of 1929.
le- Prosperity ahead?
Ell Unlikely.
er- There are many indications that or