Evening star., 1946-08-01
Little Buying Is Seen
From War Sovinqs
Federal Studies Refute Belief of
an Unprecedented Boom
By David La,vrence

By David Lawrence
The impression that the American
people saved a lot of money during the
war and that this is to be spent In an
unprecedented boom is pointedly refuted
by some Government studies.
The first important fact that has been
disclosed is that the top 10 per cent Of
the Nations families have so per cent
OF the savings and that the balance is
distributed over various income groups,
but with very little savings in the bot
tom 80 per cent. In fact, "a per cent of
the Nations families have no savings
at all.
The next important fact that has
come out is that it is the intention of
those who have savings to use these for
emergencies and not for items that
normally come out of current incomes
The studies were made for the Federal
Reserve Board by the Bureau OF Agricul-
tural Economics of the Agriculture De-
partment. The data were obtained by
the approved sampling techniques
which have been found scientifically
accurate by disinterested statistical
bodies.
Most important Is the information
these studies bring to those who are
planning sales campaigns. For obviously
products which the top 10 per cent need
and will buy cannot produce demand
much greater than the number Of in
dividuals in that group.
Bearing on Investments.
The concentration of so per cent OF
the savings, however in the hands Of
the top 10 per cent of the families may
have an important bearing on invest
ment developments in the next few
years, for obviously this group, having
satisfied its immediate needs for con-
sumner products, will have an abundant
amount of capital to finance industrial
expansion and perhaps to invest in busi-
ness enterprises abroad.
But the theory that, because many
billions of dollars of savings were &C
cumulated during the war, this consti-
tutes a backlog which will cause tre-
mendous boom is not borne out by the
latest studies.
The most significant piece of informa-
ton is with reference to the intention of
those who have saved money during the
war
Thus only 8 per cent Of the savers
expressed an intent to use any OF their
savings bonds on 1916 expenditures.
Another 28 per cent intended to draw
somewhat on their savings account for
current expense, showing that they were
not making ends meet or were already
buying beyond their needs.
AS to War Bond holders, 78 per cent
said they would use their bonds only in
case of emergency. About so per cent
of another group-savings bank deposi-
tors-stated that they intend to draw
only in case of emergency.
The conclusion is reached, therefore,
that current income from wages and
salaries as well as borrowing Is to be
depended upon to buy new autos or to
build new houses and to purchase other
types of durable goods.
Figures on Borrowing.
The figures show, Of course, vast
amount of money to be borrowed. Some
where between 81 and 28 billion dollars
is to be invested in houses, cars and
other durables But current income or
borrowing, on the other hand, is to pro-
vide from Is to 21 billions of this
amount, whereas savings are to be
tapped to the exent OF only to 7
billion dollars.
The total amount saved out Of 1915
income was close to 20 billion dollars
and this is a part of the total liquid
assets of about 81 billions. But of this
big sum, about 48.6 billions Is in the
hands of the top 10 per cent Of the
Nations families, who each have $3,400
or more in savings.
The huge amount of liquid assets OF
the Nation is distributed about as fol-
lows: go million families in America
have 62.37 billions of dollars in savings;
% million families have 1853 billions
of dollars, and 1873 million families
have no savings whatever. There are
about 46 million spending units in all.
Whether the American people as a
whole spent too much out of their cur
rent income during the war and did
not develop thrift habits, or whether
the amount that was saved is sizable,
the fact remains that the intention to
spend savings in vast amounts is not
borne out by the latest data. People
will be buying mostly out of their cur
rent wages and salaries or borrowing.
This is not situation that resembles
what has been forecast these last sew
eral months. 1t argues that sooner or
later the demands for balanced budget
for individuals will make it impracti-
cable to engage in spending sprees.
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