Evening star., 1938-04-03

persons employed and unemployed, the
number of freight cars loaded with goods.
the total income of the people Of these
United States and SO forth. The severity
of this business slump as measured by such
indexes is quite unprecedented in American
history. Every significant index covering
the beginning of this depression has re-
corded sleeper and greater percentage de-
cline than occurred during the correspond
ing period following the 1929 crash. This
does not necessarily mean that the current
depression will last as long as that of 1929
30, or that our business life finally will
sink to as low level. 1t does mean. however,
that the Roosevelt depression baby has been
lustler infant up to the age of six months
than bis elder brother of 1929
Consider these significant indexes.
From August. 1920 to February, 1880, in
dustrial production declined less than II
per cent, and from August, 1887, through
February, 1898, "a per cent. The price of
stocks on the New York Stock Exchange
declined "a per cent during those six
months of 1e29-3o, and 33 per cent in
1878 The national income declined
5l2 per cent in the earlier six-month Pc
riod, and almost 9 per cent during the six
months following last August During the
1929-30 period the unemployed increased
by 3,222oCo. and in the 1878 period by
3.263,0O0. Factory pay rolls are down over
26 per cent since August Yet, while
workers income has been cut heavily, the
cost of living is very little lower than last
summer.
There will doubtless be some recoil from
these low levels. A spring pickup in cer-
tain lines is indeed already detected But
whether the improvement will develop and
spread to other lines. and-more impor-
tant-whether it will endure is the big
question which has Washington and the
country guessing.
Council Renewed Spending.
According to school of thought influ-
ential in the Capital, the recovery after
1882 was dependent upon the heavy pump
priming expenditures of the Federal Gov
ernment, and by the same token the busi-
ness let-down since the summer of 1887
has been due to the practical cessation of
met Government spending" These theo-
rists in and out of Washington counsel the
Government to renew its spending, or else
lend capital to business to stimulate pri-
vate spending.
New Deal spending, together with
natural forces of recovery, brought about
from about 15,60O, 900 in 1888 to about
100000 last September The relapse Of
business since then, however, has through
lay-offs again increased the jobless to
about 10000 900, according to Aubrey Will
liams of w. P. A. Many Of those newly
unemployed have some savings. But
sooner or later, it is urged, they will re-
quire Government support.
Among economists who hold prompt
renewal of Government spending and lend
ing as essential are Prof. Adams of the
University of Oklahoma, Mr.. Currie of the
Federal Reserve Board, Prof. Gayer of
Columbia University, Prof. Hansen of Har-
ward and Mr. Henderson of w. P. A. Their
views are not entirely identical. But they
are parallel up to point Mr.. Hender-
son feels that there is still tremendous
virility in the orthodox economic theories of
competition and that the Government
should utilize every means to make those
economic laws work. Others, like Profs
Gayer and Adams, appear less hopeful
on this score Probably all Of them would
concede the difficulty of getting the Gov
ernment policy changed quickly enough
to stimulate or restrain violent movements
like the one we are now experiencing
Views on Spending.
In recent paper, Prof. Gayer, using
computations of others. discussed the eco
nomic effects of increases in mass pur-
chasing power as a result of Government
cash payments to consumers over and
above tax collections, ETC. On the assump-
tion that money spent by the Government
is respent by it's recipients at the rate of
two times a year, Prof. Gayer concludes
that the improvement which followed 1888,
!. e. the rise in the national income, can
be imputed almost entirely to Government
spending.
BY the same token it is concluded that
the drastic decline in metz Government ex-
penditures in 1937-after allowing for the
fact of heavy social-security tax and other
collections by the Treasury-in the absence
OF any natural increase n private income
increasing" expenditures resulted in the
severe business reaction we are now ex-
periencing 1t follows that resumption of
net large-scale Government spending in
one form or another would again stimulate
the Nations business.
If those be 'he facts 1t appears that in
the last analysis the economic welfare of
this country somehow has come to lean very
heavily upon the Federal Government; and
that without the Government we will soon
be back to 1882. Formerly we pulled out
Of depressions. like those Of '73, 'S3, OF, etc,
because new geographical or industrial