Evening star., 1949-01-02
Montgomery
Continued From Page ELY


Production Set Records.
Industrial production set record:
as 1948 neared its end. The Fedora
Reserve Boards overall index of in.
dustrial production stood at a new
high in October. 1t was 1875 per cent
of the average for 1858, up per.
centage points from September. But
the gains came chiefly from durable
goods production. NondurableS hac
slowed their advance to a walk.
Other measures of the Nations
economic pulse showed similar
trend. The number of people en-
ployed in both industry and agri-
culture hit a record of more thar
61,000,000 during the peak months
Of June, July and August, million
more than during 1947's top period
The increase of wage earners more
than reflected the population
growth.
Living Cost Tapers.
The cost of living as measured by
the Governments Bureau Of Labor
Statistics was tapering off at the
end of the year after hitting high
of 1745 in August and September
This means that, according to the
Government statisticians, a family
of moderate income living in large
city found prices in these two
months 741a per cent higher than
the average of the period 1885 1889
the base for the index.
Food prices were declining faster
but were still more than double the
prewar period.
The apparent leveling off of soar.
ing costs followed months after
major break in commodity prices ir
February, the first real blow to the
postwar imitation. Farm prices never
regained their January peak, ano
nearly all other prices, like the over
all cost of Lying index. climbed con.
siderably more slowly after Feb
ruary.
The Associated Press index ol
wholesale commodity prices hit q
record of 208.14 in January. plunged
precipitately to around 1875 in Feb.
ruary and March, climbed slightly
during the summer to around 19(
and was closing out the year below
180. This index is based on average
prices for the year 1926.
Foreign Aid Spurs Imitation.
Heavy Government spending ir
aid to foreign nations and in re.
armament at home, launched in The
spring after the commodity price
break, provided the major spur te
initiation and a major prop to the
prosperity. Consequently the future
of this program is interlinked closely
with the future of our economy. Anc
behind the future of the program
lies the unpredictable outcome o1
the cold war; between capitalism
and communism.
At year-end the Government wa!
spending at an annual rate of $l2,.
900 100000 for rearmament. Presi'
dent Truman set a limit of $15,'
900 900 900 on military spending fol
the fiscal year beginning next JUNE
30, but he was under pressure tt
increase it at year-end. The armed
services are pressing PARTICULAR!
for a $17,5Oo 100000 budget, ane
have submitted figures even higher
Amidst all the boom of 1948, thu
stock market, a traditional baro
meter of business, failed to respond
Its role as key to the Nation!
economic health was poorly played
Stocks fell with commodities II
February, then made steady clims
through July, wavered through Sep
tember, rallied in the weeks pre-
ceeding the November election, ant
then plunged after President Tru
mans reelection.
AS measured by the Associated
Press average of so representative
stocks, the market hit low OF Co.
on February 10. climbed to a hlgf
of 72.4 on July 9, and was dowr
around the years low again in De
cember.
Stunned by Election.
Some business leaders. and th'
financial community in particular
were first stunned by the Presi
dents reelection, having antici
pated Republican victory which
they thought would bring a NOR
favorable climate for industry ant
finance.
After the first shock, a brighte
view prevailed, and as the yea
closed increasing expressions o
optimism we're heard. The Govern
ment was at pains to wipe out fears
The year brought the end o
many shortages, and many still pre-
vailed Textiles, radios and small
electrical appliances came int
ample supply, while steel and stee
products, some nonferrous metal
and automobiles led the list o
goods still scarce.
In general, the overall supp,
situation was easier, retail sale
WcIC uCCllil416 u1lO PAiSCo wSAC @oAA
ing as the year closed.
None of this was regarded a
necessarily forecasting the oft
feared recession. In fact, leading
economists hailed it as health,
sign, a portent Of an end to in
fation, but at time and at
rate aiding a healthy readjust
ment to a high level of prosperit,
for several years to come.
More imitation now would be re
garded as unhealthy and a sharl
defiation as probably worse. Tn
economists offer no guarante,
against a bust" at any time, bu
it Is the belief of most of then
that the orderly readjustment ap
parently now under way is a goot
thing, and that we all have enough
work to do to keep us busy ant
prosperous for some months ahead