Evening star., 1939-08-19
A.F.l. Forecasts More
u. 5. Spending Unless
Business Picks Up
Survey Issues Warning;
Action to Spur Trade
Declared Urgent

Further resort to Federal spend
Ing was forecast today by the Amer
lean Federation of Labor unless the
Government can spur private en-
ployment.
In its monthly Survey of Busi-
ness which warned against con-
tinued pump printing" and criti-
cized Secretary of Commerce Hop
kins for setting up staff for further
study of industrial problems when
business expansion is an immediate
necessity the federation said it
was up to the Government to take
the lead in a cooperative effort by
business, labor, farmers and other
groups to increase the Nations pro-
duction and raise living standards.
Although outlining no particular
method for the Government, the
federation presumably had in mind
conferences of leaders in the differ
ent fields at which agreements to
raise production would be sought.
IF business does not expand sub
stantially before next spring, we shall
have a further demand for Govern
ment spending, with its danger OF
imitation and consequent losses to
wage earners," the Federation said.
Action Declared Urgent.
Action for business expansion on
q sound basis is, therefore, urgent.
Shall we advance on a cooperative
basis, providing for the needs of all
groups, or shall we accept Govern
ment domination?"
The labor organization said experts
eontended production increases could
be planned for the country as a
whole, but that business men were
not apt to take the initiative in the
direction of expansion because busl-
ness risks were greater and profits
smaller than in pre-depression years
and no organization to expand pro-
duction existed among businessmen.
To-day the survey continued, the
chance of succeeding in business is
said to be only about so per cent as
great as in pre-depression years. and
the rewards of success are about
20 per cent less. In addition, those
who have succeeded are forced to
give a larger part of their income
to the Government through in
creased income taxes. This explains
why venture capital runs to shelter
in safe and tax-free investments like
Government bonds.
Our great need today is to give
businessmen the kind of assurance
which will enable them to look for
ward to the future with confidence" :"
The federation said Congress, by
defeating the administrations big
lending bill, had overruled the
pump priming" policy on which the
Government had relied to stimulate
recovery and had placed the re-
sponsibility of reviving business
"squarely on the shoulders of the
Nations businessmen"
N. A. M. Seen Waiting.
But it added that, although
every one is concerned in this prob
lem of expanding production" busi-
nessmen seemed "as helpless as any,
one else" in finding the way to
achieve it.
The National Association of Manu-
facturers was clearly not ready to
accept the challenge of Congress,
the federation said, but appeared to
be waiting for legislation ito weaken
the National Labor Relations Act
IF this is typical of business
leadership" the survey continued,
I'VE can expect little help from in
dustry, on its own initiative. toward
immediate increase of production.
The National Labor Relations Act
cannot safely be weakened"
Actually, the Federation con-
tended, business was in a particu-
larly favorable condition now for
sound, healthy expansion"
First" it said, wage rates per
hour are higher than ever before
In our history. The average of "a
cents in industry as whole today,
and IS cents in manufacturing COM
pares with 56 cents in manufacture
ing in 1929. AS soon as industrial
plants are back on a full-time
schedule, this wage rate will auto
matically provide high buying power.
Secondly, labor is better organ
lied and more able to keep the wage
level rising as increases in produc-
ton and profits make this possible.
Therefore, once a vigorous produc-
ton increase is started by the flow
of private capital, we shall no longer
need outpourings of Government
funds to increase consuming power"
The survey reported that profits
OF 495 leading corporations in the
first half Of 1899 were S717,OOO, 900,
compared with $449,0O0,OOO in the
first half of last year.
Disturbed conditions in Europe
made business forecasts impossible,
1t concluded.