Milford chronicle., 1947-05-30

When, a year or SO ago, few /
doubling Thomases gloomily inti-
mated that the postwar production
boom might not last indefinitely,
they were greeted with angry QppO-
sition on all sides. Some of the
government economists were espe-
cially vigorous in arguing that
nothing even resembling a "reces-
sion" could be forecast, and that
production would go on to new high
plateau after new high plateau.
This reasoning was based on the
tremendous total of war savings in
the possession of the people, and
on the undeniable fact that prac-
tically everyone needed long list
of goods, ranging from clothes to
homes, which had been unobtain-
able for yeats, 1t was further
buttressed by the assumption that,
after the backlog of orders had
been made up, the American people
would be accustomed to higher
standard of living and would con-
tinue buying I'M hitherto unprece-
dented amounts in order to sustain
it.
That pleasant viewpoint has
taken quite a beating lately. Even
the government economists-with
, certain exceptions whose optimism.
to Judge by their public statements,
remains undimmed - are talking
cautiously of a corrective" down.
turn in production. And some ex-
perts are so certain that ..reces-
sion Is on the way that they have
stopped considering whether it will
or will not occur, and are guessing
as to when it will come and how
severe it will be.
The reasons for this attitude are
easy enough to find First, there
has been considerable decline in
savings, because people have spent
the money, wisely or otherwise, for
non-durable goods, for luxuries
and for just plain living. Second
the savings held by the average
family were never large enough
even had they been held. intact, tc
buy very much. Third. large seq
ment of the public, whether it il
right or wrong, thinks that prices
are too high and is buying as little
as possible Fourth, there is dis
tinct possibility of more big-tim,
labor disputes. Fifth, in man.
lines the production of goods at th'
factory is much greater than tn,
sale of goods at retail-whicl
means that inventories are pilinl
up, and that distributors will par
their purchases. Sixth, increase
of income on the part of mos
white-collar groups have been les
than the increases in the cost o
living-which simply means tina
their real purchasing power is les
than 1t used to be, even though the
get more dollars each payday.
Some very remarkable productio
levels have been reached. Accord
ing to United States News tabu
lation, production of electric wash
ing machines Is running almos
double the prewar peak. Mems su
output is little above prewa
Hosiery, automobile tires, autom6
biIes and almost all other consume
articles are up by varying percent
ages. So are practically all indus
trial and construction materials.
number of items. despite the bacl
log, are already in oversupply. 7
quote the News, "A peacetin
economy . is shown to be largel
restored, after Ltore than a yes
and half OF reconversion effort
With production at fioodtide ar
demand for many goods slackenin
the question remains as to whs
lower prices will be forced in ord,
to lift the level of demand to Il
level of supply"
This is one way of saying tn
prices may have to adjust ther
selves to consumer buying powe
And that presents many problel
many a confusion, in itself. II
recent arguments over manufa
turing profits. spurred by some r