Evening star., 1943-01-01
Tighter Checks
Coming on All
'Non-Essentia|s
Lower Living STANDARD
Indicated Despite
Higher Incomes
BY FORREST II. GRAVES,

ny EonnLSl H ohh NLo,
Director. Cambridge Associates.
The year 1943 promises to be the
very busiest in all our history and
the year when the least business"
in the usual sense Of the word, will
be done.
Actually, of course, there is but one
business one industry, that Of
waging successful global warfare.
Any activity which contributes
toward a victorious conclusion of
the war will be pushed with all
industrial and governmental power.
Any activity which does not aid
in reaching the major objective will
be halted or limited to grudging
concessions to civilian welfare and
morale.
The war-born paradoxes Of this
busy, businessless year will be many.
Even sharply higher taxes will still
leave the Nations biggest labor
force with the most disposable in
come it has ever commanded. More
dollars will accrue from the record
national income of 125 billions or
more, and these dollars, measured
in terms of what they will theoret-
ically buy in goods and services, will
have comparatively high purchasing
power.
High in Theory Only.
This purchasing power will be
high in theory only. 1t cannot be
translated to any great extent into
new homes, better food. more COM
Portable living, because the supplies
will not be available for general
consumption. Many things will not
be available at all. Many others
will be rationed strictly and dras-
tically. Thus while the Federal Re-
serve Boards index of overall produc-
ton will probably average above
200, or twice the 1858 average,
the ununiformed consumer, though
blessed with bulging pay envelope.
will be fortunate if he maintains
the living standard of the depression
years.
On the industrial front there will
be similar fantasies. Most manu-
featuring and processing firms will
make money. The aggregate. how
ever. will probably be no greater
than was earned in the normal
year of 1889 and may be rather
less, even though the total volume
of production will set a tremendous
record.
Uneven Demands Faced.
At the same time, busy as most
war goods producers will be, there
will be periods during the year
when individual plants and indus
tries may be temporarily shut down
due to conversion of facilities to
production of the new types Of
equipment required by the changing
character of the war. Amid the
general BOOM time operations Of the
industries involved in the war effort
there will also be serious, perhaps
disastrous, difficulties facing COM
panies in the service and dis
tributive fields. Small profit mar
gins squeezed by high wages, the
problems of obtaining adequate
help and the plain lack of goods to
distribute may result in the demise
of numerous marginal organizations
of this kind
Prices will probably continue to
rise somewhat during the year as
the Price Administration attempts
to prevent general explosion of
the infinitely strong pressure Of
unusable buying power by allowing
small. gradual increases in various
prices. The extent of the rise in
average prices depends a great deal
on the attitude of the Seventy
eighth Congress. If farm prices are
permitted to get out of hand the
whole price structure may be
blitzed.
OPA's Job Difficult.
The Office of Price Administration,
whoever heads it, will not be popular
next year, chiefly for the reason that
one persons income is another's cost
of living. AS a consumer 1t is natural
for the average citizen to want to
keep living costs down, to be vitally
concerned about the prospects Of
initiation. AS wage Garner, farmer
or businessman, it is equally natural
for him to want higher cash in
come to meet the rising prices which
he sees as unjustifiable for other
products and services. Neither in the
act OF holding prices down or in
permitting slight increases, are price
control measures likely to meet with
universal approval, essential as they
undoubtedly are.
The general level of wages during
1943 will trend higher despite wage
stabilization agreements. Part of this
trend will be caused by continued
adjustment to living costs but the
greatest increase in pay rolls will
stem from longer work hours and
overtime wages. The factory pay
rolls figures issued by the Bureau
OF Labor Statistics will be further
lifted by an estimated increase Of at
least $4,000 more factory workers.
$4,000, ,000, 900 for Farmers.
The agricultural portion Of the
population will enjoy the best year
In history in actual cash income. and
still better year than that when
this cash income is weighed in terms
OF its buying power. At the present
time the average cash income of
persons engaged in farming is ahead
OF that received during the peak
year of 1919 in the first World War.
In fixed value dollars it is more than
81 per cent higher.
The 1912 total cash income from
farm marketings when finally re-
ported viii be approximately SIS.
600 100000. This compares with a
lS41 total of 1.600, 900 900 which
was itself the highest in 81 years.
An estimate of farm cash income
OF something more than $4,000.
100000 for 1943 appears reasonably
conservative. although the figure viii
naturally be affected by production
and the rigidity Of price control
measures.
To all groups, wage earners.
farmers, investors, business and pro-
tses GRAVES, Page C-3J