Evening star., 1942-10-25
War Spending Raised
To About Equal
Civilian Volume
Reduction in Normal
Buying Expected to
Be Slow at First
BY FRANK MacMILLEN,
Associated Press Financial Writer

Associated Press Financial Writer.
NEW YORK, Oct. 24-An eco
nomic turning point in the war now
has been reached-the Government
currently is spending about as
much each day on the struggle as
the citizen spends for his needs
as civilian consumer.
War and consumer spending now
is delicately balanced at around
the five and three-quarter billion
dollar mark each month.
The scale must tip and there is
no doubt about which way it will
move.
Government spending will m
crease-though by no means 50
rapidly as it has in the past-and
civilian spending will drop, some
what slowly at first but with in
creasing momentum.
Full effect of the turn which
sends Government expenditures
beyond those of civilians for the
ry-day needs has yet to be felt.
1t may be several months before
the average citizen, as consumer,
realizes just what has happened to
HIM.
Stocks at High Level.
Here is one answer for the de-
layed repercussions of the fact
that war now is the senior partner
in the national economy and civilian
consumption is the Junior member,
from the current issue of the Fed
eral Reserve bulletin:
Retailers stocks of most goods
are still at a high level and for
a time will be available to meet fu-
ture demands as new supplies be-
come more limited.
Declines in output of consumer
goods, however, will be reflected to
an increasing extent in reductions
In goods available to consumers
and it Is evident that problems of
adjustment throughout the civilian
economy will become increasingly
important"
Detailed predictions of trends in
a wartime economy are extremely
difficult and most experts are chary
Of sticking their necks out. But
some general outlines of the year or
SO ahead now are becoming avail
able.
Most Government prognosticators
think expenditures for the war will
rise gradually to a ceiling of $6,5OO,-
100000 a month-a ceiling more or
less set by present plant capacity
and raw materials supply.
Goods to Be Scarce.
At the same time consumer
spending will be dropping not be-
cause Of smaller income in the hands
OF consumers, but because the goods
sumply will not be there to buy.
How slow this drop will be is one
OF the moot points economists argue.
The Department of Commerce
calculates that consumer goods and
services on which the citizen can
spend his money will amount to
$4,000 100000 in 1943, compared
with $4,000, 100000 this year and
$76 5000, 100000 last year.
But the $4,000, 100000 figure for
next year includes a lot of goods al
ready piled on the shelves.
AS these goods are used up many
of them will not be replaced and so
the curve of civilian spending will
tilt downward at an increasingly
sharp angle as the year progresses.
The department says that only 10
per cent of the output of the heavy
goods industries will be available for
civilians in 1943 and only 60 per cent
of the production of "non-durable"
industries. The rest will go into the
war effort.
Allowing for rise in prices of
about 6 per cent, which is expected
between the first half of this year
and the corresponding six months of
next year. the department estimates
that the actual physical quantity of
goods which will be sold in stores in
the coming period will be IS per
cent less than first-half 1912.
1t will be drastically less, or non
existent. in some lines-for the aver
age citizen no automobile, for in
stance.
Other Cuts to Be Small.
In other lines the reduction will
be small-plenty of food, though less
Of scarce items such as sugar, coffee,
meat, canned fish, spices, some kinds
of shortening, some kinds of canned
and frozen foods.
Even these lacks will become ap-
parent in many cases only gradually
In other lines, clothing, house
hold electrical gadgets, radios, hand
tools and hardware, aluminium
cooking utensils, supplies on shelves
will make the restrictions of avail
able goods gradual, but contracted
supplies are in the offing in nearly
all the things the consumer buys
just the same, and it Is we'll to rec
ognize it.
But, economists point out, the
surest way to acute shortages is a
rush to buy scarce or potentially
scarce goods and they say there is
some evidence that a new wave Of
scare buying" is getting under way
The sequence of tight supply
scare buying and rationing so far in
this year has been nearly unvaryine
both in this country and abroad.
Yet. they point out, a refusal OF
the public to be stampeded into
buying things they do not need
might have made many of these
steps unnecessary for many months
and perhaps for the duration.