Evening star., 1950-06-25
Prosperous America Land Of PIenty-To Spend and To Buy
Booming Business
browns Out Cries
OF 'inflution'
By Roder Wineet

ing. Here ana tnere are cries thaI
This is imitation" These warn
ings are smothered by the louder
din Of carpenters hammers build
ing q record number Of homes, OF
roaring of assembly
lines in an unprecedented stream.
Of the sterile clickity- -clack of Fed
eral Government checkwriting
Prosperity today is based on
plenty of money TO spend and
plenty of things to spend it on, II
people don't buy things to use
the Federal Gov n
ment buys them to store away for
use in a future war or to give
away to foreigners.
That tremendous demand keeps
prices high. The cost Of living
has been inching up since Feb
ruary. II is now more than 81
per cent higher than the l935-lsS9
average. Prices haven't blown
through the top yet in a typical
trademark of a classical imitation.
In fact, many prices have gone
down in recent days-like rubber.
pepper, scrap steel. cocoa. coffee
and sardines. But some Of those
prices had climbed even higher
than average and were due for n
cutback. Basic commodities, as
measured by the Federal Bureau
Of Labor Statistics. are l69 per
cent higher than prewar 1889.
All of that is measured in dol
lars. which today will buy only
about SO per cent as much as be-
fore the war.
When will we have q rainy cay?
Most economists say the weather
is fair and the economic barom-
eter steady. They predict such q
climate for periods Of from 6 to
1S months. Yet there Is minor
ity which makes no such forecast
at all. They say things could turn
around sharply at almost any time.
Auto Phenomenon
Not measured in shrinking dol
lars. but In unchanged units, Is
the phenomenon Of automobile
production. Right now production
is headed for a solid Z million
unit figure for 1850. That's q
record for all time-so far.
To pay for these automobiles
buyers have been drawing on their
personal credit. It's easy for
many. Terms are as low as MOTH
ing down and three years to pay.
and some dealers will even pay you
cash for your old car to boot. II
your personal credit Is good.
Others must put up q cash down
payment. There are dealers who
will fly you to Detroit free to take
delivery of your car and pay part
Of your expenses while you wait.
That's boosted outstanding
credit toward q new high. Total
consumer credit is nearing $40
billion. More than $1l billion
of that is the installment type
sometimes called, "A dollar down
and q dollar when you catch me-"
Spending isn't all on credit by
any means. There are 59,731 900
workers on the job. That's close
to the record high Of l948.
A lot Of credit and wages. too.
have gone into the building boom.
Dollar volume was nearly 81 bil-
lion in May. That's the peak.
r. w. Dodge Corp. surveys show
residential construction contract
awards in the flrst five months
this year were 110 per cent higher
than during the same period OF
l949. It looks like a million home
record this year.
War veterans with the help or
the Federal Government have had
lot to do with the building
boom. They can buy a home on
priority with nothing down and
pay the lowest interest rates and
have part Of their mortgage guar
anteed.
More Steel Than Ever
New homes need new furniture,
refrigerators. stoves, washing ma
chimes and television sets. Many
retail stores have been kept out
of the red by the sales Of televi-
sion sets alone.
To build these cars and homes
and furnishings requires steel and
wood and thousands Of other
items. The steel industry is bigger
than ever before, even in wartime.
In the first five months Of this
year it produced 1872 900 tons Of
ingots and steel for casting. De-
spite the Gripping coal strike, that
total came within $4,000 tons Of
hitting another all-ti-..c hiCh. Tho
industry can make tnaC .lu--I
steel in less than two days.
Just about everything else il
close to that boomtime pace. The
Federal Reserve index of indus
trial production stands CO ie3 pc'
cent of the 1935-1939 average. 4. s
month 1t Is expected to move up
two notches to equal the all-time
peak set in october and Novem-
Der Of. 1948.
For the past year, the stock
market has been going upward
with production. The year-old bull
market, based on rising corporate
profits and optimism over future
earnings. Is near a 19-year peak.
One of the fundamental factors
In keeping the boom rolling
is Government spending. The
Federal Government Is spending
money faster than it can collect it.
through taxeS-an inflationary
factor itself. The money largely
goes for running the Government,
Of course, but the most direct i'm
pact on the Nations economy
comes in spending to help the
world recover from the last war
and prepare to fight the next one.
l.