Milford chronicle., 1938-06-17
ECONOMIC HICHLICHTS
HAPPENINGS THAT AFFEcT THE DINNER
PALS, DIVIDEND CHECKS AND TAX
bills OF EVERY INDIVIDUAL
National and International Problems
IRseparable from Looai Relfare

IRsSparabis from L0oaI Weifars
During May, business stood at n
: on the Federal Reserve Boards in
dex of activity. In 1887 it averaged
, 40. That means It has declined
about one-third, which is a terrifi,
drop for so short a period OF time
II also means that the government'l
revenue estimates have beeI
thrown clear out of kilter.
II is said that the new tax bill
is a $5,3O0,000,000 revenue measure
Budget Director Bell, under ques-
tioning by Senator Bailey, has stat
ed that this estimate was based on
the December outlook. Business
was well down then, but nowhere
near as far down as II is now. and
the outlook for the future was ma
terially better. The consequence Is,
according to informed opinion, that
the Sc, 300, 100000 must be shaved by
at least $500.000,000 and probably a
good deal more to get a true picture
of what the measure is likely to
| produce.
Result: declining revenues, plus
the pump-priming endeavor, would
seem to make inevitable a greater
increase in the national debt than
was anticipated. Apparently the
only way to prevent this would be
to levy new or higher taxes, but
there is no sentiment, in a congress
facing an election year. for that. A
consensus of various authoritative
estimates places the deficit for the
fiscal year beginning July at ap-
prOximately $5,000.000,000 Lowest
prospective deficit estimate is that
issued by the budget bureau-$3,-
92O,OO0.OOO. Highest is the estimate
of Senator Vandenberg-$S, 900, ,O0O,-
900.
The problems faced by the Treas
ury were vividly indicated a short
time back by Secretary Morgenthau
who is now regarded as one of the
most conservative Of the Cabinet
officials. and who was recently con-
graduated even by so strong an Op-
ponent Of spending as Senator Byrd
for the excellent job he has been
doing. The Secretary said: "The
Treasury is on a 24-hOur basis
and we try to meet these very diff
cult situations as they arise. All
can say is, as of today l think we
have met them. What we can do in
the future / do not know" This said
Paul Mallon, appeared to be
fortnight and sensible statement Of
the real outlook"
The outlook, in other words, is in
the laps Of the gods. Expectation is
that the White House pump-priming
bill will finally go through in just
about its original form. The Presi-
dents control over Congress, though
far from absolute, has been streng-
thened by the winds of Administra-
tiOn-backed candidates In the Oregon
and Florida primaries Though the
New Deal got a setback in Pennsyl-
vania) and by the publication of
survey made by Fortune which in
iicates the odd fact that, in spite
Of the new depression, the Presi-
dents personal popularity is almost
as high as it ever was.
For the last week for which this
has statistics. the business
ndex showed a very slight rise-sO
slight that you had to look very
at the graphs to see it. I'm
nobility has characterized business
or some time, with all gains and
osses, when seasonal adjustment is
made, insignificant.
Business Week thinks that 'the
main factor working toward revival
S the continuance of consumption
Il a higher rate than production"
n the steel industry. for example,
operations are at 80 per cent of ca
,acity, while consumption is be-
ween 40 and As per cent OF capacity. J
his means that existing inventories
4 the metal are being rather rapid
y used up, and that stronger buying !
lust develop If business is to Oper-
te at all, much less improve.
The automobile industry is very
ouch in the doldrums, and recently
Ouched a new post-0ctober low. ,
are reported to have
argely discarded plans for eXten- I
i've changes and improvements in {
939 cars. The new cars when they [
ONE out in the fall will be about {
he same as this years, which OF i
.self will slow sales.
The BODYBUILDING program hasn't
often underway yet. Some think J
title will come of it-others are ex-
remely optimistic and feel that {
realty stimulated residential con- :
truction will lead industry into bet I
er times. FILA has a great number
( applications on hand, but il is =
elieved that several months must .
nsue before much actual work will !
ct underway. \
One interesting fact, indicative OF r
he state of sentiment, is that the
'ord recession" is being used less
nd less TO describe current condi- b
ions, and the word depression" T
lore and more. This is true Of a
ewspapers, magazines and individ- L
ais. Even the most sanguine no t
niger regard the slump as minor ]
latter, which will be shortly taken a
are of by the ineluctable pull of a !
,ng-time recovery movement. The p
ceiling grows that we are in as po- y
serious position now as =
1880. =
A glance over a number of fore . !