The midland journal., 1946-11-01
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Released by Western Newspaper Union.
INVESTORS FEAR FUTURE
DESPITE BRIGHT PROMISE
By PAUL MALLON :

INVESTORS FEAR FUTURE
DESPITE BRIGHT PROMISE
WASHINGTON. - The Steelman
report laid down statistics showing
us to be living in just about the best
possible of all economies-but the
stock market does not believe it.
The reconversion Office direc-
tor, John Steelman, told the
President in his quarterly re-
port that business profits are
"at the highest point in history"
farm income has risen to can
all-time high" production is at
its top peacetime record, nation
al income is unprecedentedly
"the highest" and unemploy-
ment is measly two million
yet the market falls.
Concerning this phenomenon,
Steelman says only, "the severe de-
cline in the stock market -. indi-
Gates uncertainties in the minds Of
business men," But about this Steel
man has no uncertainty. He pre-
diets met income of proprietors,
dividends and other income pay
ments also will increase" In the
face of this official promise of
greater earnings-the stock market
continues to decline.
UNREALIsTIC CONCLUSIONS
So the peculiar, confusing condi-
tion has arisen in which no one de-
nies the Steelman report yet no one
pays much attention to it-a stale
mate in optimism and pessimism in
which no one seems likely to change
his mind. The business people as
sert behind their hands the report
should have been issued by the
Democratic congressional campaign
committee, as it is purely cam
paign document. The administra-
ton is taking the best possible-and
in this case a wholly unrealistic
view Of conditions, merely to inf1u-
ence the coming voters. No one
has taken the report apart to ascer-
tain where it is wrong, while con-
f1icting claims fill the air and be-
wilder the judgment.
The fault behind the whole re-
port is basic. You can see this
perhaps most clearly in consid-
ering the claim that profits now
are at an all-time high in his
tory. Steelman's figures calcu-
late them at above 10 billion
dollars this year, while in 1941,
the last peacetime year, they
were around billions. But
Steelman has absolutely forgot
ten to measure this increase
against the price hikes since
1941. If he did, he would find
profits have declined. He has
measured the dollar volume Of
profits without considering how
the dollar has shrunk. He has
truthfully compared figures
which may be sound enough
to get an unsound result.
Thus his figures condemn his own
conclusions. He says national in
come was 81 billion dollars in 1941
when business acquired the nine bill
lions of profit, but now he says the
national income is 167 billions, and
business earned only 10 billions.
Thus he unwittingly comedies bust
ness is making much less profit in
percentage of income from sales.
This gross defect half-justifes the
comment so frequently heard
among business people, namely:
1--WE have had imitation for every
thing except profits"
OPPOSITION TO OPA GROWS
Now I do not feel much confidence
in government statistics on prices
or wages. know wages have gone
up only 18 to 271s per cent in GER
tain unions, but not generally. The
national average must be far less
than 18 per cent. Also I know it
costs me more to live now than the
government index says it costs. In
any event, am willing to accept
Steelman's conclusion that real
wages (after taxes) are actually
down some from prewar days when
measured against actual price in
creases.
In the face of this criss-
crossed economic situation, you
can well understand why the
market goes down. General
Motors and possibly U. S. Steel
are not operating at a profit to-
day. Investors fear the unions
have squeezed much profit out
Of business and, with sympa-
thetic administration in power,
will continue to squeeze the
golden goose until all profits are
gone, and the hazards Of con-
Quoting business do not war
rant investment. Furthermore