Evening star., 1952-04-07
And the Great Biz Boom Era Went Boom!
By Joseph 6. o'Keefe

THE current rise in unemployment
l. has revived an economic paradox
which first puzzled the United States
during the boom era Of the twenties.
The gravity Of the present slump lies
in the fact that the Nation has large
number Of idle workers during q period
of notable industrial activity. Such q
development is not new. America quar-
relied over the problem Of unemployment
amid prosperity in 1928. well in advance
Of the great depression which struck a
year later.
In general. the country's economic
setup is radiating good health. Produc-
ton in many lines Is on q wartime
footing, establishing or approaching new
records. American steel mills poured out
a record 2,127 900 net tons in one week
in March to push operations up to 102
per cent of the country'S rated capacity.
Electric production Is close to rs billion
kilowatt hours. The aggregate personal
income estimated by the Commerce De-
partment is $257.3 billion. Building per-
mits in 215 cities totalled $313,154, ,679
for February.
This glittering front tends to minimize
dustrial regions have been certified as
surplus manpower areas by former De-
fenSe Mobilizer Charles E. Wilson, the
initial step toward funneling in defense
production contracts.
Quick application Of this panacea is
in itself an indication of progress. In
1928. many leaders in public life couldn't
or didn't grasp the extent of the slump
because the United States had no ma
chinery to deal with it or even to ap.
praise 1t.
There was widespread belief in the
twenties that this country had sue
ceeded in "stabilizing industry" so that
the old-fashioned trade reaction with its
repercusSionS on prices and jobs was a
matter of the past. Like the Man Who
Came to Dinner" prosperity showed no
inclination to leave.
Under President Coolidge's admins
tration, business was largely unfettered
by Government interference. Few re-
Strictions were raised, and key positions
on regulatory trade bodies were often
filed by appointees sympathetic to the
aims of business.
In this amiable atmosphere, Wall
Street doomed. Between January l, 1928,
and mid March, there were seven s.
million share days. Mass production
flourished. finding new outlets through
the spreading practice of installment
buying. The fledgling radio industry was
expanding, but had not reached its
peak.
A year previously, General Motors
assets had passed 81 billion in valua-
tion. The automobile trade led the
country in terms Of annual production.
The motor car was literally changing
the face Of the Nation by revamping
transportation methods, spurring road
building and causing the erection of
hundreds of new filing stations and
tourist camps.
But on the other side Of the picture,
the farmer wasn't marching in the
parade of prosperity. Coal mining suf-
fered textile manufacturing, shipbuild-
ing and the shoe and leather business
Jagged.
AS increases in unemployment became
obvious, Labor Bureau, Inc, a private
organization in New York, estimated
the total out of work at 4 million. This
was little more than sound guess, the
sponsors conceded. since the Govern
ment had few statistics to offer on the
situation.
Gov. Alfred E. Smith of New York
asked his State industrial commissioner
to determine what action the State
might take to help the jobless. Factory
wage earners had dropped by $4,000 in
New York State alone. Appeals to
charitable organizations were higher
than at any time in years.
In other communities. the situation
was similar. Bread lines heightened in
Chicago. Ohio had serious jobleSsness.
Idle workers demonstrated in the streets
Of Passaic, N. j.
Figures set forth by the Bureau Of
Labor Statistics emphasized the eco
nomic paradox. Although factory en-
ployment had fallen IS per cent since
1923, production at these same plants
was mounting. Joblessness had previ-
ously been associated with closed fac
tories. PROSTATE industry and widespread
depressions. The Nation had difficulty
realizing that the new phase Of unem-
ployment was Q direct sequel to pros
perity.
The plight of the American worker
aroused considerable interest abroad. In
other parts of the globe he had been
envied for his comparatively high wages,
short hours and generally prosperous
condition.
The British public in particular was
astonished to learn that this country
had no mechanism to combat unemploy-
ment. There were inquiries as to the
functions of the Federal Reserve Board
in expanding or contracting credit to
meet economic fluctuations. Credit, as
a matter of fact, was ample and cheap.
but much of it in this boom era was
going to finance speculation in stocks
and real estate.
A picturesque character called "Mr.
Zero" opened q shelter for the jobless
in New York at which he sold meals for
5 cents. To dramatic the needs Of his
clients at ''The Tub" heistaged an auc-
This and Tn