The Daily Worker

TIME FOR U. S. WORKERS TO BEGIN TIGHTENING BELT AND DRAWING ON PATRIOTISM FOR NOURISHMENT

By LELAND OLDS

(Federated Press Industrial Editor)

Recurrent unemployment will be the lot of workers in this country unless large foreign markets can be captured. But the ability of the United States to expand its markets sufficiently is doubtful in the face of competition from other nations in the same fix. By treating capital too generously and the workers too stingily the country has decreased its capacity to produce without a corresponding increase in the demand for production.

These are conclusions drawn from E. D. King's analysis of the present business depression published in The Magazine of Wall Street. He pictures the situation in the major industries briefly as follows:

Steel Declines.

Steel-output tending to decrease, demand less than a year ago, will continue to decline gradually. (Since this was written the drop in production from over 90 per cent to less than 65 per cent of capacity is regarded as the most rapid and spectacular in the history of the industry).

Coal-output about 50 per cent of a year ago, demand poor but likely to increase. Other mining-output unchanged, demand slightly less. continued decline in demand expected.

Rubber goods-slight decrease in production, demand considerably less, will decline further. Shoes-output unchanged. hand to mouth buying, should increase.

Automobile-sharp decrease in output. slow buying. future demand below 1923. Textiles- sharp decrease in output, demand less, future. unsatisfactory.

Construction materials-output same, decrease in demand, likely to decrease further.

Electrical equipment-output same, output same, demand slightly less. will decrease.

Furniture-output same, demand same, will decrease.

Typewriters-output slightly less, demand same, will decrease.

High Productivity.

Petroleum and sugar are the only products for which King predicts an increase in demand before autumn.

Analyzing the way in which abnormal conditions blinded us to the situation,

"The fact is that for several years we have been going along smoothly filling out the post-war demand for sundries such as new housing, railroad equipment, automobiles and many other essentials and non-essentials. That demand has to an appreciable extent been satisfied.

"The first point to consider is our manufacturing equipment. In this score there can be no question that in many lines we have too much capacity of production for the demand at hand. Ever since the war it has been a great problem to keep our plants fully and profitably occupied."

Lacking a large foreign market. he says, our highly geared plant productivity becomes at least temporarily a sort of incubus.

Under-Consumption.

This article reveals tardy recognition in the business world of a situation which The Federated Press has been emphasizing for more than a year. No analysis of industrial future is worthy of serious attention which disregards the fact that we have expanded our productive capacity without a corresponding increase in the ability of consumers to absorb its products. As a result the point has been reached where prosperity in this country has no secure foundation without a larger foreign market than we have been able to secure during a period when the competing industrial nations were seriously handicapped.

The industrial system which turns over the entire increment in production resulting from modern technology to the absentee owners is evidently approaching a deadlock. There must be a big increase in consumption or a decrease in production either thru periodic shutdowns or reduction in working hours. If recurrent depressions are to be avoided there must be less emphasis on returns to capital and more on returns to the millions of producer consumers.