The Omaha guide., 1938-06-18
Economic Highlights

Duflfg May, business stood at rs on the
Fedaral Reserve Boards index of activity.
In 1897 It averaged I10l That means it has
declined about one-third, which is a terrific
drop for so short a period of time. It also
means that the governments revenue estimates
nave been thrown clear out of killer.
1t is said that he new tax bill is a s6 90o
ooo,ooo revenue measure. Budget Director Bell
unler questioning by Selator Bailey, has stated
that fhls estimate was based on the December
outlook. Business WIS well down then tut
noHhefe 'ar as FAR down as it is now. aid
ere outlook for the future was materially
pa'tef. The consequence is. according to inform
ed opinion, that the ST, 800, 900. 900 mnst be
sfts9d by at least SIS, 000, 900 aid probab lv
good Geal more to get a true picture of what
Measure is likely to produce. Result.
Ueoiihine revenues, plus the pump-primming
ehdeaVof, would seem to make inevitable q
greater increase in the rational debt than wa
anticipated. Apparently the only wav tn ~
Ientlthls would be TO levy new or higher taxes
out thelr is no sentiment, in a congress FACING
eieeslon year, for that. A consensus of var
Ious authoritative estimates places the definit
Tor the fiscal wear beeinnino July l at approxi-
metely $5,OOO,0 0 900 Lowest prospectiye
ueiicit estlInsIe Is that issued by the budget
oufean-S3, $50, 0 1000. Highest is the estimate
oil Senator Vandenberg- SIS, OoO, 600. 900
The problems faced by the Treasury were
Vlvldly indicated a short time back by Secre.
'9y Morgenthau-who is now regarded az
one OF the most conservative of the Cabinet
eliiclals, and one who was recently conpratu-
lated even by so strong an opponent of snend-
ing as Senator Byrd for the excellent lob he
has hsen doing. The Secretary shidt erhe
treasury is on a 24-hour basis, and we 4v
to meet these very difficult situations thew
arise All i can say is, as of TODAY think we
nave met them What xUa m 10 - 4 -
| do not know" This, said Paul Mallon.. an
peared to be a fortnight and sensible state
ment of the real outlook"
The iutlook, in other words. is in the lans
of the gods. Expectation is that the White
House pump-primirry bill will finally 90 through
IN just Pbout its original form. The Presidents
control over Congress, though far from abso-
Lutte, has been strengthened by the wins of
Administrator back candidates in the Oregon
and Florida primaries Though the New Deal
got a setback in Pennsylvania and by the
publication of a survey made by Fortune which
indicates the odd fact that, in spite of the new
OPPRESSION, the Presidents personal popularity
is almost as high as 1t ever was.
For the last week for which this column has
statistics. the business index showed "a. very
slight rise-so slight that you had to look very
carefully on the graphs to see it. Immobility
has characterized business men for some time,
with all gains and losses. when seasonal ad-
justment is made, insignificant.
Business Week thinks that "the main factor
working toward revival is the continueree of
consumption 81 a higher rate than production"
In the steel industry, for example, operations
are at 80 per cent of capacity, while consump-
ton is between 40 and DO peric cent of capacity.
This means that existing inventories of the
metal are being rather rapidly used up, and
that stronger buving must develope if business
is To operate at all. much less improve.
The antomobile industry is very much in
the doldrums, and recently touched a new
post-October low. Manufacturers are reported
to have largely discarded plans for extensive
changes snd improvements il 1889 cars. The
new cars when they come out in the fall will
70 about the sam as this years., which of it
self will slow sales.
The ONT building program hasn't gotten
underway yet. Some think little will come of it