Evening star., 1945-06-17
Prosperity Era Seen
In Buying Urge
But Observer Expects Controls
to Be Continued
By O,Den L. Scott.

to Be Continued
By O1oen L. Scott.
A more optimistic view Is being taken
OF the prospect for an orderly shift from
war to nonwar basis. This view is
based upon growing evidence that the
Shift can be gradual without large-scale
unemployment and without q drastic
upset in industry.
A sudden end to the Japanese war, an
end within the next few months, could
change this outlook. Yet If that war
runs into late 1945 or into 1916, as it
readily may, rehabilitation is to pro-
ceed in an orderly way. II handled
carefully the basis will be laid for a pro-
longed period Of postwar prosperity,
with the problem of unemployment one
of manageable size.
The key to the future economic pros
pect is found in two factors. One of
the factors is the almost staggering
accumulation Of individual savings that
has resulted from hisl income and
limited means of spending that income
during the war. The other is the fact
OF vast pent up demand for goods
of all types.
If the public will accept control of
prices during the time when industry Is
getting ready to fill the record demands
10 be expected and if the public will
go along with some rationing period of
prosperity In postwar. If, however, there
Is to be mad scramble for goods at
skyrocketing prices, the money base for
prolonged prosperity can be burned up
IN boom and an attendant bust.
The facts of the situation are these:
during war years the Nations income
mas oeen immense. Payments to indi-
Vlduals in l945, for instance, will be
above sl59 0,000,000, if war continues
That compares with s70,8O0, 900 900 back
IN 1899. Taxes will take about s21,00o,.
100000 OF this income, but there will be
lett after taxes are paid $138, ,00o, ,0O0, 900.
spending on goods and services will be
no more than slo3,0Oo,Oo 900, leaving
$35,O00,000,00O over for savings.
A situation comparable to that has
existed Tor four years. AS result, in
the years since 1910, the public will
have piled up an estimated sl5oOOO.-
100000 by the end of this year. That
| is an amount nearly s12o,o0O 600 600
more than normal and, of those savings,
not far from 100000 900 900 will be In
the form OF currency, bank deposits and
Government securities.
| There is dynamite in those figures If
the figures represent money that is going
| to be used.
The chance that large part of it
will seek use is considered to be great.
The reason why savings are likely to be
used in large amount is found in the
fact OF pentup demands. 1t has been
four years since families that want to
build houses have been able to build.
1t has been four years since new cars
were produced to fill what now Is a
vast market. It also has been four
years since much of industry could
invest normally in new plant and
equipment.
| For four years farmers have had
record net income after expenses. The
needs of the Nations farms for equip
farmers will have the money with which
to fill them. At the same time, the
use OF credit to finance purchases of
consumer durable goods of all kinds
has been contracting. After the war
it will expand to add further to avail
able purchasing power.
Prosperity is written all over those
figures. A big question. however, is
whether the postwar prosperity is to be
an orderly prosperity or one of the run
away-boom type. The answer to that
question, in turn, depends upon the be-
havior of people with money, and that
behavior is related to the willingness of
Congress to provide restraints There is
strong chance that. left to themselves,
the people will engage in scramble for
goods before industry is prepared to turn
out goods IN the volume required and
that there will be speculative spree
in prices. Prosperity could burn itself
Out rapidly on that basis.
The shift from war to a nonwar
basis now is getting started and gives
promise Of being orderly. In this period
OF cutbacks tight controls are being con-
tinued. There are continued price con-
troll and continued rationing. Both are
likely to be applied during the full year
that begins July 1. The transition as a
result will be carried out without much
dlslocation unless there should be a sud-
den end to war with Japan.
Unemployment is expected to rise to
about 100000 by the year end, which
is an increase of only 100000 from the
present level. 1t may temporarily reach
100000 when cutbacks reach their
peak in the adjustment to a one-war
basis, but civilian industry will expand
rapidly to take up that slack. BY the
end of 194S it is probable that unem-
ployment will be around 3,5oo,ooo. It
could be somewhat higher, if demobiliza-
ton after the japanese war were very
| rapid.
In any event, barring an irresistible de-
sire to turn everything loose and to let
an imitation blow itself out, the outlook
is for number Of years of good times
ahead in which unemployment will be a
problem. but not problem of stagger-
ing proportions. In this period income
payments to individuals are likely to
hold around s12000O,000 900 a wear.
against $3.50 10000 900 now and $40, ,ooo,-
900 900 in 1939
shown the interests of their respective