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OUTLINE FOR TESTIMON? BEFORE SENATETOP^LOTMEBTCOMMTEEEB I - What is the current situation? 1* Index of production Aug* 117; Nov. 90; estimated at 85 in Dec* Levelled off in December* Sharpest rate of decline on record* 2* Prices - All cGmmodities~Sept*25 - 87*5; Dec* 25-81*2 Perm products— * * 87*3; * * 72*9 Other than farm • * 85*9; • * 83*6 3* Dept. store sales, Sept* 94; Nov* 91; Dec* estimated 89* 4* New rent index turned down in Nov* Building continued to decline* II - Contributory factors 1* Cost and price advances 2* Inventories - 60 large corporations on Sept*30th, 35J6 over Sept* 30, 1936* 3* Downturn in residential building 4* Change in budget picture Excess of cash expenditures 1st 11 months 1936 * #3*6 b* It w ft It ft «V ft 1 9 3 7 _ •3*2 b* III- Prospects 1* Buying to maintain inventories not enough* 2* Prospects bad in durable goods fields of railroad equipment* manufacturing and mining plant and equipment, building and autos* 3* Effect of liquidation of installment credit 4* Foreign demand may slacken* IV- What to 1* 2* 3* 4* do Sustain buying power Lower costs in building field Study how to avoid repetition of events of last winter Amend undistributed profits tax Wholesale Price Indexes, 1957 July 5 All commodities Farm products Foods Other commodities Hides and leather Textile products Fuels and lighting Metals Building materials Chemicals and drugs House furnishings Miscellaneous 87.2 89.7 85.3 85.9 106.6 77.4 78.1 95.1 96.9 83.1 91.0 78.8 Source: Bureau of Labor Statistics September 25 87.5 87.5 88.7 85.9 108.5 74.5 79.6 96.4 96.5 81.2 92.7 77.1 December 25 81.2 72.9 78.9 83.6 98.4 69.4 78.6 96.2 92.5 79.2 91.4 74.9 Production» Employment, and Trade, 1957 Industrial Production Factory Factory Freight- Department ManufacEmployment Pay car Store Sales Total tures Minerals Unadjusted Rolls Loadings (value) January February March April May June July August September October November December 114 116 118 118 118 114 114 117 111 103 p 90 * 85 115 116 117 118 118 114 114 118 110 101 p 87 110 115 128 115 116 114 112 112 115 113 pl08 99 100 101 102 102 101 105 102 101 98 p 94 91 96 101 105 105 103 100 104 100 100 p 89 80 82 83 84 80 78 80 79 78 76 71 * 67 93 95 93 93 93 93 94 92 94 93 91 * 89 p Preliminary Estimated Source: Federal Reserve Indexes, All seasonally adjusted except factory pay rolls. Index of Rent, 1957 January February March April May June July August September October November December 82.2 82.8 84.2 85.2 86.1 86.6 87.1 87.8 88.6 89.2 89 a Source: National Industrial Conference Board. Residential Building Contracts (11,000,000) January February March April May June July August September October November December 1936 1937 37 51 55 67 70 74 72 101 81 80 68 65 78 63 90 108 84 93 81 73 66 65 60 p45 Sources F. W. Dodge Corporation p Preliminary RECEIPTS AND EXPENDITURES UNDER THE SOCIAL SECURITY AND RAILROAD RETIREMENT ACTS AS A FACTOR IN THE NET CONTRIBUTION OF THE FEDERAL GOVERNMENT TO COMMUNITY EXPENDITURES (Amounts in millions of dollars) Net reduction of community expenditures attributable to operations of Social Security Act 1936-January February March April May June July August September October November December 1936-First 11 months 1937-First 11 months 291 184 244 314 332 543 469 407 296 346 300 299 291 185 243 315 318 547 464 398 293 322 295 312 1 39 133 99 88 78 55 120 89 51 103 231 101 44 93 40 95 108 29 30 48 2/ 11 232 140 177 192 128 173 163 149 119 99 114 57 856 3,726 830 3,369 1,686 1/ 1/ 1/ 1/ 1/ 1/ Net contribution of Federal Government to community expenditures excluding transactions under the Social Security Act 1 1 1 14 4 5 9 3 24 5 13 1/ 1/ 1/ 1937-January February March April May June July August September October November Net Contribution of Federal Government to community expenditures including transactions under the Social Security Act 17 Excess of expenditures over receipts, representing a net contribution to, instead of a net reduction of community expenditures. 2/ Preliminary • 1 Producers floods \ In Millions of Dollars) 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 (Preliminary) Bails, and Utilities MaintenToCapiance tal tal 2,268 4t631 2,363 2,825 2,341 5,166 4,858 2,824 2,034 1,739 1,603 3,342 904 1,169 2,073 1,633 1,113 520 1,228 1,924 696 1,315 2,100, 785 1,085 1,495 2,580 3,385 1,805 1,580 Mining & Manufacturing MaintCapienTotal ance tal 2,202 3,254 5,456 2,400 3,990 6,390 1,898 4,725 2,827 1,530 1,665 3,195 999 1,825 826 1,272 2,138 £66 1,436 2,958 1,522 1,712 1,793 3,505 2,342 2,164 4,506 2,450 3,200 5,650 Consumersf Goods Passengi >: Houa- Autoiafi _ mobiles (New) 3,813 2,623 1,456 1,005 282 204 214 585 1,202 1,250 (Hew) 3,032 3,391 2,032 1,418 796 957 1,284 1,866 2,325 FEDERAL GOVERNMENT CONTRIBUTION TO COMMUNITY EXPENDH ^RE MILLIONS OF DOLLARS MILLIONS OF DOLLARS 600 600 500 500 400 400 300 300 200 200 100 100 -100 -100 1932 PREPARED BY M.KROST 1933 1934 1935 1936 1937 MONEY RATES
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