Evening star., 1949-06-19
1929 and Now

1879 ond Now
Despite fears in some quarters that Our
current "disinfiation" may develop into q
deep recession or depression comparable
to the one that began in 1929, there Is good
reason to believe that pessimism LIS quite
unwarranted. Actually. there are so many
favorable factors In the economic picture
that a rather persuasive case can be argued
for the cheerful prediction that conditions
of prosperity will continue to prevail Tor
a humber of years to come.
It's true, of course, that the stock market
is depressed, that consumer buying has
declined, that production has tapered on
in many industries, that unemployment
has grown substantially, and tnat the
present trend, should 1t continue without
letup, conceivably could throw us into
tailspin. But there are sound facts De-
hind the belief expressed by State author
tiles. in a survey conducted by the Associ-
ated Press, that no relief emergency I'M
pends. There are sound facts, too, behind
president Truman's assertion that he can
see no "crisis" in the current degree OF
joblessness or the general economic OUTLOOK.
To begin with, when measured against
the condition that probably more than
60 ,0O00 900 Americans are gainfuliy en-
ployed right now, jobless total OF about
$50 600 can scarcely be regarded as very
serious or spectacularly abnormal. Ger
tainly. It does not justify undue alarm.
When the Census Bureau next reports on
the subject, the figure may be more tnan
1000 900, but even then-especially because
the increase will be attributable chiefly to
high school and college students seeking
maritime work-calamity-h -howling Will
still seem altogether premature.
For the truth is that the basic factors
in our economy look much too healthy to
invite a repetition of what happened In
1929. There is vast difference between
conditions then and conditions now. In
1928, for example, personal debt OF all kinds
was very large; the stock market was
greatly inflated by wild speculation; ma
tional income totaled only about $83 ,OOO,-
600 600: cash and bank deposits amounted
to a mere $55,0O0, 900, 900; people did not
have savings bonds; local, State and
Federal benefit payments to individuals
added up to no more than 81 600 0'0OO;
bank failures were multiplying fast, with
no insurance for depositors; farm prices
received negligible support; wage rates
were low; after long period OF expan-
sion, industry had met postwar needs ana
consumer demand was weak.
By way of contrast, 1949 offers the fol-
lowing picture: The burden OF personal
debt is relatively light; the stock market
is too debated, too lacking in speculation,
to experience anything like the crash OF
1929: national income is about double what
1t was twenty years ago: cash and bank
deposits triple those Of 1928; people have
individual savings bonds worth almost
$50 900 ,000, 900; Government benefit pay
ments-to veterans, farmers, social secur-
ity beneficiaries, etc.-approximate $l2 ,0oQ,-
600 900 yearly; there are no bank failures,
and most depositors are insured up to
$4,000; farm prices are strongly supported:
wage rates are high; despite q decline IN
consumer pending-infuenced IN part by
q bargain hunting desire to wait and see
whether prices will continue to drop-the
demand for housing, automobiles, and
durable goods in general is still enormous,
not least of all because our population has
increased 1900, 600 since 1910 and 26,000,-
600 since 1890.
These are some Of the factors that argue
against pessimism The depression breed
ing conditions of 1929 do not exist In our
economy today. On the contrary, con-
sidering such factors as our current income,
purchasing. power, very high employment,
and o-be-satisfied consumer needs In
many fields, we have situation SO condu-
Give to continuing prosperity that 1t is
hard to believe that our "disinfiation" Is
anything more than transition from our
recent imitation to new point Of stability.
At any rate, the present situation looks
fundamentally bright enough to discredit
Nervous Nellie-ism or Cassandra like
predictions.