Who Holds the Gap

The U.S. Department of Commerce last week estimated that the national in come in the second quarter of this year was at the annual rate of $146 billion, 19% above the third quarter of 1942, just before the Economic Stabilization Board began to wage all-out war on inflation.

That figure is $36.6 billion more than the total amount of goods, services and taxes which U.S. citizens and corporations were able--or forced--to buy and pay for, v. a $28.7 billion difference last September. Thus the "inflationary gap" (up 27%) widened at a faster rate than the national income rose.

Biggest beneficiary of the increase, percentagewise, was the farm owner (37%). Wage and salary earners were next (20%). Corporate profits and interests and rent were up 12% each, small industrial proprietors only 6%. The figures (showing the increase in total income, in billions, over September 1942):

2nd Quarter 1943 Increase

Wages, salaries, etc. $103.2 $17.0

Proprietors' net income (farm) 13.6 3.7

Proprietors' net income (nonfarm) 11.0 0.6

Interest & rents 9.5 1.0

Net corporate profits 8.7 .9

Total $146.0 $23.2

Some economists believe that from now on the "inflationary gap" may stand relatively still. But no economist has brought forth a solid plan to reduce it. One thing this quarter's figures showed: even with no increase in nonwage income, the increase in wage-and-salary "gap money"--$17 billion--would still have added mightily to the hoard that threatens uncontrolled inflation.

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