Cause & Effect

Carloadings are a primary index of business conditions. Still more primary are stomach-loadings. But unemployment, though the bitterest index of bad times, is not the best, for the U. S. has never found a satisfactory way of measuring it. Last week, however, Government estimates of unemployment increases, varying widely in figures, were in complete basic agreement: unemployment is growing by leaps & bounds. Leon Henderson, onetime NRA economist, estimated in a study made for WPA that 2,000,000 workers have lost their jobs since September 1, that between 1,000,000 and 2,000,000 more will do so before February 1. Acting WPAdministrator Aubrey Williams reported that 100,000 names had been added to WPA rolls. And Madam Secretary of Labor Perkins announced that 570,000 lost their jobs between mid-October and mid-November, that weekly industrial payrolls fell $25,900,000.

To Government officials an alibi is always more acceptable than bad news and last week many New Dealers were busy talking about a different set of Government statistics: figures comparing the size of industrial inventories last September with that in other months and years. This data showed that in December 1929, 50 "representative manufacturers" (only three mentioned by name were Chrysler, General Motors and Pullman) had inventories totaling $232,456,000. On Sept. 30, 1937 the same 50 had inventories of $285,606,000. In short, these concerns had more goods on hand when the current depression began than they did shortly after th crash in 1929. These figures were presented to President Roosevelt last week as a refutation of the contention of businessmen that fear of New Deal oppression caused the present slump. When a corporation is uncertain about the future, the argument ran, it does not stock up heavily with materials and supplies. Inference was that the 1937 slump was caused not by fear but by overconfidence. Since business economists have generally held that 1937 was not marked by excess inventories, the Government's conclusions if not its figures were almost certain to be challenged.

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