Evening star., 1950-01-06
MILLIONS o. ,ptssoass

nanceo IN WnOle or In part Dy
employers.
Work stoppages in 1949 were
about the same In number as in
1948, but the two major stoppages
in coal and steel, involved such q
large number Of workers that the
loss in man-days Of work was
about so per cent greater than in
1948.
Profits were lower in 1s49 than
in 1e48. For the year as a whole
corporate profits before taxes and
the inventory valuation adjust.
ment were $26, SOC, ,000, 900. a dror
of about al per cent. ! Much Of
the loss in reported profits repre-
sented the effect Of falling prices
on inventory valuation. ~-
. Farm income (realized net In
come Of farm operators, declined
about is per cent, rejecting the
decline in prices. The agricul.
turai price-support program pre-
vented a much sharper decline In
prices and incomes.
Credit terms generally easee
during the year. Interest rate.
declined. Business loans, reflect.
ing the liquidation Of inventories
declined sharply during the frsj
six months but began to advance
again in the latter part Of the
year. 1nstallment credit, after Z
slight decline In the firts quar-
ter, resumed its advance and
reached . new postwar peak
Most notable was the more than
go per cent increase in auto
mobile installment credit
Consumers disposable income
was slightly higher than in 1948
rising from $190.s billion to $192.s
different. rising every quarter in
billion. The trend. however, was
1948 and falling every quarter In
l949.
Consumer expenditure for goods
and services were remarkably con-
slant throughout 1949. Their total
was $17s billion. This was equal
to the total for 1948.
X X II
Net personal savings amounted
to $14.4 billion. compared with
$12 billion in 1948. During 1949,
however, the trend Of saving was
downward, d from an annual rate
Of $16.3 billion in the first quar-
ter to $13.1 billion in the fourth.
X X II X
Construction Gains.
Private domestic investment in
1949 was 18 per cent below the
preceding year. primarily because
Of a shift from accumulation to
liquidation of inventories.
Construction, in spite of slow
start, exceeded the high level at
tanned in 1948 by 3 per cent in
dollar volume, and was an impor-
tant stabilizing force in the econ
omy. Public construction in
creased by Is per cent over 1948
Private construction declined by
4 per cent, but residential con-
struction was particularly strong
in the second half of the year, ris-
ing to a new postwar peak in the
fourth quarter. Housing starts
for the year exceeded 1000. 600
compared with 931 800 in 1948. A
reduction in prices and costs, the
easing Of credit. the expanded au-
thority of the RFC to purchase
mortgages, and the renewal of
FILA authority to insure rental
projects, all contributed to the
upsurge.
Corporate finance reflected the
changes in the economic situation
The shift from increasing invento-
ries and increasing customer
credit in 1948. to inventory reduc-
ton and a lower rate of increase
in customer credit in 1949, per-
mitted corporations to improve
their financial liquidity while con-
tinuing large outlays for new plant
and equipment. Liquid assets in
creased by 2.500,000 dollars
Short-term debt decreased by
4, ,o00. 900, but long term debt in.
creased by about the same amount
X II \ \
The export surplus fthe exces;
of our exports Of goods and serv.
ices over our imports) was only
slightly lower in total in 1949 thar
in 1948. but it fell sharply in the
second half OF the year. This re-
suited primarily from a SHARP
drop in our exports of goods ano
services. following severe losses o1
gold and dollars by the countrie.
in the sterling area. The devalua.
ton of foreign currencies subse.
quent to these losses has so fal
had little effect on our economy.
Government fiscal transaction
i,