The Dark Valley

"Postwar demand for goods is likely for a year or more to test the productive capacity of U.S. industry. With 57 million people working 7.5% fewer hours, the out put of goods would fall short by a small margin of meeting the probable demand." So prophesied Harvard's ruddy econo mist Sumner H. Slichter in Chicago last week, before some 200 regional chairmen of the Committee for Economic Development. To support his thesis Slichter fired a series of cold facts:

P: More than 600 civilian articles made from iron and steel have not been produced since early in 1942. The deferred demand for such goods includes: 3.5 million vacuum cleaners, 23 million radio sets, 5.2 million refrigerators, 10.3 million electric irons, 4.5 million toasters.

P: Most of the seven million couples married during the past four years have not set up housekeeping, have not been able to buy the houses and furnishings they will need.

P: With less goods and services to spend their greater savings on, the U.S. people in three years have saved $75 billion (as much as they would have saved in ten years at the 1940 rate). Some may hold their savings to buy the overpublicized postwar "dream" products. But, just through plain need, large chunks of money should flow into trade channels, said Economist Slichter. The people will demand more steaks, more milk, more vacations, new clothes. Estimated Slichter: "Postwar demand for nondurable goods should be just short of $90 billion" (at 1943 prices).

P: The demand for consumer durable goods will be at the rate of $14.2 billion a year, he predicted, plus perhaps as much as $4.4 billion a year spent for four years to fill the backlog created by war scarcities. "For the first time in the history of the country the demand for consumer goods (durable and nondurable) will exceed $100 billion a year."

These are the possibilities, said Slichter. Then he added a huge But. Between the end of war and the fulfillment of full employment stretches a dark valley, a shadowy period of readjustment. Two years after war ends, Government expenditures will have dropped from $90 billion to $25 billion a year--"the greatest and swiftest disappearance of markets in all history."

A year after the war, nearly 20 million war workers and servicemen will look for employment. Prices must be kept down, he argued, so that soaring costs will not cancel the people's savings before the flood of civilian goods takes the place of war production.

But Slichter's facts towered optimistically above the pessimistic probability of the dark valley period. For the tasks of peace should not confound a people who had learned how to build a Liberty ship in seven days, who worked an average of 52 hours a week to keep the thundering trains rolling, and who plowed their vast fields by moonlight to raise bumper crops.

This file is automatically generated by a robot program, so reader's discretion is required.