Evening star., 1949-07-11

an aftermath of the war, by an in
flationary boom that lifted produc-
ton and employment to extra
ordinary high levels.
Serious Dangers Noted.
4 But underneath the surface OF
the inf1ationary boom, there were
serious dangers. Some incomes were
disproportionately high. Most prices
were rising at a perilous rate, and
serious price and wage distortions
were being developed. The spiraline
cost of living was inflicting hard
ship on millions of families.
These conditions threatened to
bring about a serious break in en-
ployment and production. There
fore, I recommended repeatedly, for
private and public action, an anti
imitation program to curb these
dangers before we suffered the con-
sequences.
A large part of the necessary anti
imitation program was not adopted
and the imitation went on largely
uncontrolled. The dangers that are
latent in imitation. of which I re-
peatedly warned, are now being re-
Vealed.
Employment is still high, but un-
employment has been increasing
and veterans and others leaving
school are finding it much harder
to obtain work than a year ago.
Production is still high, but it is
lower, particularly in some indus
tries, than it was last year. Business
investment Is at a high rate, but
plans for new investments are being
made with caution.
The 1949 decline has been mod
crate, and the opportunity is now
ours to reverse the trend and
achieve maximum production and
consumption of goods and services
without the evils of imitation.
The adjustment process has been
rendered less difficult by the pru-
dent actions of many groups and in
dividuals in our business system.
We have had no speculative spree
in either securities Or commodities.
Inventory buying has been moderate
and distress liquidation of inven-
tories, such as we experienced in
1920, is not to be anticipated.
Improved Understanding.
| Personal Indebtedness, on the part
of farmers, home owners, and con-
sumers generally, has been held to
conservative levels. Many far
seeing businessmen made sincere ef-
forts to avoid or minimize price in
creases during imitation, and in re-
cent months have reduced their
prices and have sought valiantly to
maintain production and employ
ment., Many labor unions have used
their collective strength with mod
Grafton and with consideration for
the interests of the whole economy
All groups in the Nation have gained
an improved understanding of
economic problems since the 1920's,
and their actions reflect this fact.
i We should not, however, be lulled
into false sense of security by these
favorable aspects of the situation.
Many of the price adjustments that
have taken place have been healthy,
and afford ground for expectation
that our economy will work its way
successfully through a difficult pc
riod of transition.
But there is nothing healthy
about more unemployment or less
production. Such trends can and
must be reversed by positive action.
private and public. The way to
check a decline in business invest
ment or production is to take affir-
NATIVE action that will lead to more
investment and more production.
The way to check an increase in
unemployment is to take Affirmative
action that will provide more jobs.
The way to prevent our economy
from shrinking is to take Affirmative
action that will help it to expand.
These things cannot be done by
business, labor, agriculture, OF Gov
eminent acting alone. They can
only be done by all Of us working
together in mutual respect and with
common objectives.
1t is with these considerations in
mind that transmit to the Con-
gress a brief summary of the econ
omic situation and recommended
tions for action at this time.
SUMMARY REVIEW OF RECENT
ECONOMIC DEVELOPMENTS
A moderate downward trend
characterized most phases of eco
nomic activity In the first half OF
1s49.
Civilian employment averaged So
million. This was slightly below
the level of the first half of 1913,
with the greatest decrease in manu-
featuring industries. In June of
this year. civilian employment was
596 million; in June of last year,
61.3 million. The number of un-
employed averaged 80 million, the
increase OF about one million over
the first half of 1948 about equaling
the increase in the total labor
force.
The unemployed were 6 per cent
of the civilian labor force in June,
compared with 3.4 per cent in June
Of last year. The number Of un-
employed in June was 38 million,
and acute unemployment problems
have developed in certain localities.
Production of goods and services,
adjusted for price changes and for
seasonal variation, in the first half
of 194s was about 11a per cent
less than in the second half OF
1948. -
Prices generally decreased, re-
hecting thy shift from a sellers to
a buyers market. The decreases
were in most instances moderate
and orderly, with no, indication ol
q general spiraiing downward
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