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Full text of "Investigation of concentration of economic power. Hearings before the Temporary National Economic Committee, Congress of the United States, Seventy-fifth Congress, third Session [-Seventy-sixth Congress, third Session] pursuant to Public Resolution no. 113 (Seventy-fifth Congress) authorizing and directing a select committee to make a full and complete study and investigation with respect to the concentration of economic power in, and financial control over, production of goods and services .."

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INVESTIGATION OF CONCENTRATION 
OF ECONOMIC POWER 



HEARINGS 

BEFORE TOE 

TEMPOEAEY NATIONAL ECONOMIC COMMITTEE 
CONGEESS OF THE UNITED STATES 

SEVENTY-FIFTH CONGRESS 

THIRD SESSION 
PURSUANT TO 

Public Resolution No. 113 
(Seventy-fifth Congress) 

AUTHORIZING AND DIRECTING A SELECT COMMITTEE TO 
MAKE A FULL AND COMPLETE STUDY AND INVESTIGA- 
TION WITH RESPECT TO THE CONCENTRATION OF 
ECONOMIC POWER IN, AND FINANCIAL CONTROL 
OVER, PRODUCTION AND DISTRIBUTION OF 
GOODS AND SERVICES 



PART 1 - 3 
ECONOMIC PROLOGUE 



DECEMBER 1, 2, AND 3, 1938 



Printed for the use of the Temporary National Economic Committee 

,2ipRTHFft^T^R-— -----•■- of LAW LIBRARY 




UNITED STATES 
N-fiey-ERNMExXT PRINTING OFFICE 



TEMPORAEY NATIONAL ECONOMIC COMMITTEE 

(Created pursuant to Public Res. 113, 75th Cong ) 

JOSEPH C. O'MAHONEY, Senator from Wyoming, Chairman 

HATTON W. SUMNERS, Representative from Texas VicelChairman 

THURMAN W. ARNOLD, Assistant Attorney General 

•WENDELL. BERQE, Special Assistant to the Attorney General 

Representing the Department of Justice 

WILLIAM E. BORAH, Senator from Idaho 

WILLIAM O. DOUGLAS, Chairman 

•JEROME N. FRANK, Commissioner 

Representing the Securities and Exchange Commission 

EDWARD C. EICHER, Representative from Iowa 

GARLAND S. FERGUSON, Chairman 

•EWIN I/. DAVIS, Commissioner 

Representing the Federal Trade Commission 

WILLIAM H. KING, Senator from Utah. 

ISADOR LUBIN, Commissioner of Labor Statistics 

•A. FORD HINRICHS, Chief Economist, Bureau of Labor^Statistics 

Representing the Department of Labor 

HERMAN OLIPHANT, General Counsel 

•CHRISTIAN JOY PEOPLES, Director of Procurement 

Representing the Department of the Treasury 
RICHARD C. PATTERSON, JR.. Assistant Secretary 

'Representing the Department of Commerce 

B. CARROLL REECE, Representative from Tennessee 

LEON HENDERSON, Executive Secretary 

r 

c 
4^ 



I 



REPRINTED 

WILLIAM S HEIN & CO , INC S 

BUFFALO. N. Y. "' 

1 968 --n 



CONTENTS 



Testimony of: Page 

Henderson, Leon, executive secretary, Temporary National Economic 

Committee 157-183 

Lubin, Dr. Isador, Commissioner of Labor Statistics, Department of 

Labor 1 3-80 

Thorp, Dr. Willard, advisor on economic studies. Department of 

Commerce 81-156 

Statement of: 

O'Mahoney, Senator Joseph C, chairman. Temporary National Eco- 
nomic Committee _■.. 1-3 

Wasted resources 12 

Production of commodities in prosperity and depression 24 

Employment and pay rolls in depression 43 

Cost of depression to Government 67 

The business population 82 

Business population growth 84 

Business births and deaths ^ 86 

Survival of new enterprises 87 

Freedom of business opportunity • .. 88 

Large capital requirements a barrier , 90 

The basic dilemma 92 

Rise of corporations 93 

Extent of corporate activity 95 

Size of enterprises measured by employees. 97 

Largest enterprises . 99 

Measures of concentration by employees 100 

Size of enterprise measured by assets 103 

Exclusion of financial companies ^- 104 

Assets distribution for manufacturing subdivisions 108 

Limitations on measures of size. . 109 

Growth of large enterprises 110 

Reasons for consolidations , 111 

Part played by the Sherman Act 112 

Problem of marketing by small enterprises 114 

Clusters of large enterprises 115 

Types of functional organization 116 

Problems of the individual businessman 117 

The meaning of "Industry" * 118 

Lack of uniform production rates by industry members 119 

Employment records of industry members 125 

Shifts in importance of industries and trades . 129 

Variety of trade practice problems . 131 

N. R. A. codes illustrate difference in problems 135 

Measures of concentration . 136 

Extent of chain organizations , 138 

Supplemental forms of concentration 139 

Combinations and conspiracies in restraint of trade ^ 140 

Inter-Industry combination .. 141 

General shifts in the economy . 144 

The impact of invention 150 

Foreign trade \ - 152 

The impact of war , .. 154 

Fluctuations in business conditions 155 

The need for continual adjustmi.mt . 156 

The American economy 158 

Unemployment and the labor supply 159 

Basic assumptions of American competitive capitalistic system 167 

Effect of change on basic assumptions 168 

I 



II CONTENTS 

Page 

Decline of competition 170 

Excess of savings over new investment 177 

Problems confronting T. N. E. C 179 

Main lines of study indicated 181 

Schedule and summary of exhibits in 

Thursday, December 1, 1938 .' 1 

Friday, December 2, 1938 81 

Saturday, Decembers, 1938 157 

Appendix. 185 

Supplemental data 250 

Index . I 



SCHEDULE OF EXHIBITS 



Number and summary of exhibits 



Intro- 
duced 
at page 



1. Message of April 29, 1938 from the President of the United 

States to Congress transmitting recommendations rela- 
tive to the strengthening and enforcement of anti-trust 
laws 

2. Public Resolution, No. 113, Seventy -fifth Congress, third 

session: joint resolution to create a temporary, national 
economic committee 

3. Procedure with respect to hearings before Temporary Na- 

tional Economic Committee conducted by various mem- 
bers, departments, and commissions under section 3 (b), 
Joint Resolution No. 113, Seventy-fifth Congress 

4. Chart: United States population increase, years 1850 to 

1960, with estimate of population increase from 1940 to 
1960. Supported by statistical data on p. 194 in ap- 
pendix 

5. Chart: United States national income for years 1850 to 

1938; graph No. 1 showing total United States income, 
and graph No. 2 showing per capita income. Supported 
by statistical data on p. 194 in appendix 

6. Chart: National income in constant prices, for years 1850 

to 1937. Supported by statistical data on p. 195 in ap- 
pendix 

7. Chart: National income for years 1919 to 1935 with compar- 

ison of 1929 prices to current prices. Supported by 
statistical data on p. 195 in appendix 

8. Chart: Comparing per capita national income of United 

States, England, Germany, Sweden, and France for years 
1934 and 1935. Supported by statistical data on p. 195, 
in appendix 

9. Chart: Employment lost in depression in non-agricultural 

occupations. Supported by statistical data on p. 196 in 
appendix 

10. Chart: Salaries and wages lost in depression in non-agri- 

cultural occupations. Supported by statistical data on 
p. 196 in appendix - 

11. Chart: Dividends lost in depression. Supported by statis- 

tical data on p. 196 in appendix 

12. Chart: Gross farm income lost in depression. ' Supported 

by statistical data on p. 197 in appendix 

13. Chart: National income lost in depression. Supported by 

statistical data on p. 197 in appendix 

13-A. Chart: Distribution of national income by type of pay- 
ment, excluding government, for years 1919-1934. 
Supported by statistical data on p. 197 in appendix 



IV 



SCHEDULE OF EXHIBITS 



Number and summary of exhibits 



Intro- 
duced 
at page 



14. Chart: Monthly income payments by: payments to vet- 

erans, dir-^ct relief, dividends and interest, entrepre- 
neurial income, compensation of employees; for years 
1929 to 1938. Supported by statistical data on p. 198 in 
appendix 

15. Chart: National income, by type of industry for years 

1919 to 1935. Supported by statistical data on p. 200 in 
appendix __• 

16. Cnart: Total and per capita United States industrial pro- 

duction, 1863-1938. Supported by statistical data on 
p. 200 in appendix ' 

17. Chart: Physical volune of industrial production: for years 

1919 to 1938. Supported by statistical data onp. 201 
in appendix 

18. Chart: Output of nondurable, as compared with, durable 

commodities, for years 1879 to 1933. Supported by 
statistical data on p. 201 in appendix 

19. Chart: Federal Reserve index of manufacturing produc- 

tion for years 1919 to 1938. Supported by statistical 
data on p. 202 in appendix .^ 

20. Chart: United States total agricultural production for 

years 1901 to 1937. Supported by statistical data on 
both total and per capita production on p. 204 in 
appendix 

21. Chart: Value of all construction, total, residential, private 

nonresidential, public. For years 1919 to 1937. Sup- 
ported by statistical data on p. 205 in appendix 

22. Charts: Residential units provided for in new^ nonfarm 

construction for years 1920 to 1937. Supported by 
statistical data on p. 205 in appendix 

23. Chart: Production and capacity of Portland cement mills 

for years 1910 to 1937. Supported by siatistcal data 
on p. 206 in appendix 

24. Chart: Pig iron production and capacity of blast furnaces 

for years 1910 to 1937. Supported by statistical data 
on p. 207 in appendix 

25. Chart: Annual production of automobiles for years 1919 

to 1937. Supported by statistical data on p. 207 in 
appendix 

26. Chart: Annual production of bituminous coal for years 

1919 to 1937. Supported by statistical data on p. 207 
in appendix 

27. Chart: Annual production of lumber for years 1919 to 1937. 

Supported by statistical data on p. 208 in appendix 

28. Chart: Annual production of shoes for years 1919 to 1937. 

Supported by statistical data on p. 208 in appendix 

29. Chart: Textile fibre consumption (wool, silk, cotton, 

rayon) by United States manufacturers for years 1870 to 

1937. Supported by statistical data on p. 208 in appen- 
dix 

30. Chart: Annual production of cigarettes for years 1919 to 

1938. Supported by statistical data on p. 210 in appen- 
dix. 

31. Chart: Department store sales for years 1919 to 1938. 

Supported by statistical data on p. 210 in appendix 



SCHEDULE OP EXHIBITS 



Number and summary of exhibits 



Intro- 
duced 
at page 



32. Chart: Index of freight-car loadings for year 1919 to 1938. 

Supported by statistical data on p. 211 in appendix 

33. Chart: Nonagricultural employment in the United States 

for years 1929 to 1938. Supported by statistical data 
on p. 211 in appendix 

34. Chart: Employment and pay rolls for all manufacturing 

industries for years 1919 to 1938. Supported by sta- 
tistical data on p. 213 in appendix 

35. Chart: Employment and pay rolls — durable goods for 

years 1923 to 1938. Supported by statistical data on p. 
p. 214 in appendix 

36. Chart: Employment and pay rolls — nondurable goods foi:^ 

years 1923 to 1938. Supported by statistical data on 
216 in appendix ^^-- 

37. Chart: Employment and pay rolls — locomotives for years 

1923 to 1938. Supported by statistical data on p. 218 
in appendix 

38. Chart: Employment and paj' rolls — lumber-sawmills for 

years 1923 to 1938. Supported by statistical data on 
p. 218 in appendix _. 

39. Chart: Employment and pay rolls — cement for years 1923 

to 1938. Supported by statistical data on p. 219 in 
appendix 

40. Chart: Employment and pay rolls — cotton goods for 

years 1923 to 1938. Supported by statistical data on 
p. 220 in appendix 

41. Chart: Employment and pay rolls — cigars and cigarettes 

for years 1923 to 1938. Supported by statistical data 
on p. 220 in appendix -. 

42. Chart: Employment and pay rolls — woolen and worsted 

goods for years 1923 to 1938. Supported by statistical 
data on p. 221 in appendix 

43. Chart: Employment and average weekly hours in manu- 

facturing, mining, and steam railroads for years 1914 to 
1937. Supported by statistical data on p. 222 in ap- 
pendix 

44. Chart: Average weekly earnings, average hours worked per 

week, and average hourly earnings in all manufacturing 
industries for years 1932 to 1938. Supported by statis- 
tical data on p. 222 in appendix 

45. Chart: Output per man-hour in manufacturing; bitumi- 

nous-coal mining; anthracite mining, for years 1909 
to 1937; and for steam railroads for years 1914 to 1937. 
Supported by statistical data on p. 223 in appendix 

46. Chart: Real wages in manufacturing, mining, and steam 

railroads for years 1919 to 1937. Supported by statis- 
tical data on p. 223 in appendix 

47. Tabulation: Estimated average costs of food, clothing, 

rent, fuel, light, housefurnishing goods, and miscella- 
ous of low-salaried workers in 32 cities for years 1913 to 
1937 

48. Chart: Estimated number of unemployed by sex and age. 

Supported by statistical data on p. 224 in appendix 

49. Chart: Estimated net total number of households and 

persons receiving relief, and emergency employment on 
Federal work programs for years 1933 to 1938. Sup- 
ported by statistical data on p. 224 in appendix 

50. Chart: Estimated total funds used for relief and work 

programs for years 1933 to 1938. Supported by statis- 
tical data on p. 225 in appendix 



VI 



SCHEDULE OF EXHIBITS 



Number and summary of exhibits 



Intro- 
duced 
at page 



51. Chart: Persons employed b}' Federal Government and on 

work programs for years 1933 to 1938. Supported by 
statistical data on p. 225 in appendix 

52. Chart: Number of total listed business concerns, new 

enterprises, and concerns discontinued, for years 1900 to 
1938. Supported by statistical data on p. 227 in appen- 
dix 

53. Chart: Length of survival of business concerns of Pough- 

keepsie, N. Y., for years 1843 to 1926 

54. Chart: Number of corporations and partnerships for 

years 1909 to 1936. Supported by statistical data on 
p. 228 in appendix '- 

55. Chart: Importance of corporate activity by branches of 

industry for year 1937 

56. Chart: Distribution of employees and employers by size 

of business concern, July-December 1937. Supported 
by statistical data on p. 229 in appendix 

57. Chart: Size of corporations by assets in 1935 — no consoli- 

dated returns. Supported by statistical data on p. 229 
in appendix 

58. Chart: Size of corporations by assets in 1935, excluding 

financial companies. Supported by statistical data on 
p. 230 in appendix 

59. Chart: Assets of large corporations of $5,000,000 and over 

showing percentage of total industry by types for year 
1935. Supported by statistical data on p. 230 in appendix 

60. Chart: Assets -of large manufacturing corporations of 

$5,000,000 and over showing percentage of total indus- 
try by types for year 1935. Supported by statistical 
data on p. 231 in appendix 

61. Chart: The glass industry and its subdivisions for 1936.- 

62. Chart: New private residential and nonresidential build- 

ing activity in the United States for years 1915 to 1938. 
Supported by statistical data on p. 231 in appendix 

63. Chart: New railroad and highway construction activity 

in the United States for years 1915 to 1937. Supported 
by statistical data on p. 232 in appendix 

64. Chart: Production of steel castings for nine plants for 

June of each year from 1927 to 1938. Supported by 
statistical data on p. 232 in appendix 

65. Chart: Portland cement production for nine mills for June 

of each year from 1925 to 1938. Supported by statisti- 
cal data on p. 233 in appendix . 

66. Chart: Coke production for nine plants for June of each 

year from 1925 to 1938. Supported by statistical data 
on p. 233 in appendix 

67. Chart: Flour production for nine mills for June of each 

year from 1927 to 1938. Supported by statistical data 
on p. 234 in appendix 

68. Chart: Employment for fifteen plants in the rubber tire 

and tube industry for June of each year from 1923 to 1936. 
Supported by statistical data on p. 234 in appendix 

69. From the National Recovery Administration, report of the 

President's Committee of Industrial Analysis, Feb. 17, 
1937, pages 204 and 205. 

70. Chart: Comparison of leading manufacturing industries 

for years 1899 and 1929 



83 

87 

93 
95 

97 

103 

104 

106 



106 

118 



120 

120 

121 

121 

124 

125 

126 

128 
129 



SCHEDULE OP EXHIBITS 



Vtl 



Number and summary of exhibits 



Intro- 
duced 
at page 



71. Chart: Independent retail-store population for years 1915 

and 1935 from 32 county-seat towns. Supported by 
statistical data on p. 235 in appendix 

72. Chart: Seasonahty of industrial operations for nine indus- 

tries over a period of twelve months. Supported by 
statistical data on p. 236 in appendix 

73. Summary of analysis of trade-practice provisions in N. R. A. 

Codes 

74. Chart: Importance of chain-store sales as shown by cer- 

tain selected types of business for year 1935 

75. Chart: Number of wagons, buggies, passenger cars, and 

trucks produced during years 190(>-37. Supported by 
statistical data on p. 237 in appendix 

76. Chart: Production of fuels for years 1870-1937. Supported 

by statistical data on p. 238 in appendix 

77. Chart: Sugar produced in and imported to United States 

for years 1870-1937. Supported by statistical data on 
p. 240 in appendix 

78. Duplicate of Exhibit No. 29. Chart: Textile fiber con- 

sumption (wool, silk, cotton, rayon) by United States 
manufacturers for j'ears 1870-1937. Supported by 
-statistical data on p. 241 in appendix 1__ 

79. Chart: Percentage distribution, by types of employment 

of gainfully occupied persons 16 years of age and over. 
Supported by statistical data on p. 243 in appendix 

80. Chart: National income produced 1919-37, by economic 

divisions. Supported by statistical data on p. 243 in 
appendix 

81. Chart: National income produced 1919-37, by commodity- 

producing division. Supported by statistical data on 
p. 244 in appendix 

82. Chart: National income produced 1919-37 — commodity- 

handling division. Supported by statistical data on p. 
244 in appendix 

83. Chart: National income produced 1919-37 — service divi- 

sions. Supported by statistical data on p. 245 in appendix 

84. Chart: Sources of national income for years 1919-21 and 

1935-37 

85. Chart: Applications filed and patents issued for years 1836- 

1937. Supported by statistical data on p. 245 in 
appendix 

86. Duplicate of Exhibit No. 18. Chart: Output of non- 

durable, as compared with durable commodities, for 
years 1879-1933. Supported by statistical data on p. 
246 in appendix. 

87. Chart: Production of durable and nondurable manufac- 

tured products for years 1929 to 1938. Supported by 
statistical data on p. 247 in appendix 

88. Chart: United States foreign trade in merchandise for 

years 1919 to 1937. Supported by statistical data on 
p. 248 in appendix 

89. Chart: Wholesale prices — all commodities for years 1801 

to 1937. Supported by statistical data on p. 249 in 
appendix ... 



130 

131 
134 
138 

141 
142 

142 

144 

144 

145 

145 

145 
147 
147 

150 

151 
152 
152 
154 



VIII 



SCHEDULE OF EXHIBITS 



Number and summary of exhibits 


Intro- 
duced 
at page 


Appears 
on 
page 


Unnumbered. Statement of Leon Henderson in reference to prep- 
aration of his estimates of unemployment — in- 
cluding excerpts from the Conference Bulletin 
of the National Industrial Conference . Board, 
July 30, 1938 T 




250 


Unnumbered. Tabulation: Persons 10 years of age and over, 
number in total population and number gain- 
fully occupied; by sex and age, 1930, continental 
United States. __ _. _ _ . . .. 




251 


Unnumbered. Tabulation: Estimated number of persons in the 
United States, in each functional class, by sex, 
November 1937 




251 









INVESTIGATION OF CONCENTRATION OF ECONOMIC 
POWER 



THURSDAY, DECEMBER 1, 1938 

United States Senate, 
Temporary National Economic Committee, 

Washington, D. C. 
The Temporary National Economic Committee met, pursuant to 
call, at 10:30 a. m.. in the caucus room of the Senate Office Building, 
Senator Joseph C.'O'Mahoney, presiding. 

Present: Senators O'Mahoney (chairman), King, Borah, Repre- 
sentatives Sumners,, Reece, Eicher; Messrs. Lubin, Hinrichs, Douglas, 
Frank, Patterson. Arnold, Berge, Ferguson, Davis, Oliphant, Peoples, 
Henderson. 

Present also: Directors of studies. Dr. Willard Thorp, Commerce; 
Mr. Hugh B. Cox, Justice; Mr. Willis J. Ballinger, Federal Trade 
Commission; Mr. Thomas C. Blaisdell, Securities and Exchange 
Commission; Mr. J. J. O'Connell, Treasury: Miss Aryness Joy, Labor. 

STATEMENT BY SENATOR O'MAHONEY 

The Chairman. I v/ill call the meeting to order. 

At the beginning of this, the first public session of the Temporary 
National Economic Committee, which was formally established by 
resolution of Congress, approved June 16, 1938, it is appropriate that 
there should be incorporated in the record, first, the message of the 
President recommending the study which is now in progress, and 
second, the text of the resolution itself. 

I offer these documents so that there may be, at the outset, a clear 
understanding of the nature and the function of this committee as 
well as of the purpose for which it was called into existence. 

(The documents referred to were marked "Exhibits Nos. 1 and 2" 
and are included in the appendix on pp. 185 and 192.) 

The Chairman. The President, in tas message, declared that — 

Generally over the field of industry and finance we must revive and strengthen 
competition if we wish to preserve and make workable our traditional system of 
free private enterprise. 

To accomplish this purpose, the President, in his message, recom- 
mended first, an increased appropriation to enable the Department of 
Justice to enforce more efi"ectively existing antitrust laws; and, 
second, -a comprehensive study of concentration in industry, of 
industrial price policies and of existing Government policies, and their 
effect upon trade and commerce. 

With the first of these recommendations — the better enforcement 
of existing antitrust laws — this committee has nothing to do. Law 

1 



2 CONCENTRATION OF ECONOMIC POWER 

enforcement is the function of the Department of Justice, not of this 
committee, though we are authorized to make recommendations with 
respect to antitrust poUcy and procedure. The function of the com- 
mittee is merely to study facts and to make report thereon with its 
findings and recommendations. 

The committee is composed of 12 members, 6 from the legislative 
and 6 from the executive branch of the Government. The executive 
departments and commissions represented on the committee are, 
by the resolution, directed to appear before the Committee, or its 
designee, and present evidence or reports on matters within their 
jurisdiction under existing law. 

It is this phase of the work which is now beginning. 

The presentation of any evidence or report by any agency of the 
Government does not, of course, exhaust the power of the full com- 
mittee. It may receive evidence on the same subjects from any 
other source or from any other witnesses. In due course, that will 
be done. 

In the meantime, it should be clearly understood that no depart- 
ment or commission, no member of the committee, no emploj^ee or 
agent of the committee, no witness who appears here speaks for the 
committee. Such evidence" as is presented is either on the authority 
of the agency which offers it or is received because the committee 
believes it wiU be useful in developing the facts which are later to be 
analyzed when the committee undertakes to make its report. 

Whether this study will be fruitful of benefit to society or altogether 
futile depends largely upon two factors: 

1. The manner in which it is conducted, and 

2. The manner in which it is received by the pubhc.^ 

Let me say, therefore, in the language of a resolution unanimously 
adopted by the committee at its last session: 

That is the unanimous sense of this committee that its function and purpose is 
to collect and analyze, through the medium of reports and public hearings, avail- 
able facts pertaining to the items specified in Public Resolution 113 (75th Cong.), 
in an objective, unbiased, and dispassionate manner, and that it is the purpose 
of the committee to pursue its work solely from this point of view. 

The members of the committee are deeply sensible of the responsi- 
bility that rests upon them to utilize the broad powers with which 
they have been invested solely for the public good. No personal, 
partisan, or factional program is controlling here. The processes of 
the committee will not be used for any purpose save to develop 
economic facts which in the very nature of things must be widely 
comprehended before any constructive recommendations may be 
outlined. 

The committee has approached its task with an open mind and with 
the intention to afford to interested persons the widest possible latitude 
for the presentation of evidence or suggestions. 

The hearings begin today with a preparatory presentation to be 
made by Dr. Isador Lubin of the Bureau of Labor Statistics. He will 
be followed by Dr. Willard TJiorp, who has been associated with the 
Department of Commerce, and by Mr. Leon Henderson, executive 
secretary of the committee. Next week the formal presentation of 
evidence will be begun by the Department of Justice. 

When that presentation is undertaken, the committee will be acting 
under rules of procedure which were adopted at the last meeting of the 



CONCENTRATION OF ECONOMIC POWER 3 

committee to apply to those portions of the hearing which are carried 
on under sec. 3 (b) of the resolution. It seems appropriate that these 
rules of procedure should also be filed at this point in the record. 

(The rules referred to were marked "Exhibit No. 3" and are included 
in the appendix on p. 193.) 

The Chairman. The prefatory statement which is about to be made 
by Dr. Lubin was undertaken because in the judgment of the com- 
mittee it was desirable that there should be first an analysis of the 
facts of our economic system as they have appeared to the various 
Government bureaus. 

As everybody connected with the Government and most of those 
connected with business understand, the Department of Commerce 
and the Department of Labor, as well as other departments in the 
Government have for many years been collecting official information 
with respect to our economic structure. 

The question, which it is now to be undertaken to answer with the 
testimony first of Dr. Lubin and then of these other gentlemen, is: 
"What exactly has been the effect of our industrial and economic 
system upon the community life of the Nation?" 

I now introduce Dr. Lubin as the first witness of this public hearing. 

TESTIMONY OF DR. ISADOR LUBIN, COMMISSIONER OF LABOR 
STATISTICS, DEPARTMENT OF LABOR, WASHINGTON, D. C. 

Dr. Lubin. Mr. Chairman, members of the committee, any attempt 
to measure the performance of our economy must be in terms of its 
efficiency in meeting the requirements of our citizens. To maintain our 
standards as our population grows we must increase the output of the 
goods and services produced at least proportionately with the growth 
of our population. 

I shall attempt to portray our population trend and to measure the 
amount of goods and services that have been available to our people 
over a period of years. 

In presenting my evidence, Mr. Chairman, I shall use a series of 
charts prepared in the Department of Labor and based upon informa- 
tion collected by the Bureau of Jjabor Statistics as well as by the 
Department of Commerce, the Federal Reserve Board, and such 
authoritative private statistical agencies as the National Bureau of 
Economic Research. 

The statistical data upon which these charts are based will be sub- 
mitted in tabular form as an appendix to my testimony, numbered to 
correspond with the exhibit number given each chart. 

I want to turn first to exhibit No. 4, which shows the trend of 
population growth in the United States. 

(The chart referred to was marked "Exhibit No. 4" and appears 
on p. 4. The statistical data on which this chart is based are 
included in the appendix on p. 194.) 

Dr. Lubin. If you go back to 1850, the middle of the last century, 
you will note that the increase in population from that year to 1935, 
was from 23,000,000 people to 127,000,000. Such estimates as are 
available place the estimated population in 1940, 2 vears hence, at 
approximately 132,000,000 people. 



4 CONCENTRATION OF ECONOMIC POWER 

The significant fact that should be brought out is that between 1850 
and 1880 our population doubled. Between 1880 and 1910, 30 years 
later, population increased by 80 percent. 

Between 1910 and estimated 1940 a similar period of 30 years, it is 
estimated our population will have increased 43 percent and the esti- 

EXHIBIT No. 4 

UNITED STATES POPUUVTION 



lOU 














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/ 


/ 


/ 


.'"" 


» 


50 
?8 








/ 


/ 


/ 


/ 












y 


/" 


/ 




















50 


60 


70 


80 


90 f 


JOG 


10 


20 


30 


40' 


50- 


60 



150 



100 



50 



NATIONAL RESOURCES COMMITTEE ESTIMATES 



1929 A TURNING POINT 



mated increase in population from 1940 to 1960 will be about 10 per- 
cent. In other words, the rate of increase of our population has been 
steadily going downward, so that in 1960 it is estimated that there 
will be but 10 percent more people in the United States than there 
will be in 1940. 



CONCENTRATION OF ECONOMIC POWER 5 

Contrasting the growth of population mth the goods and services 
that are available for our people, which is measured in terms of our 
national income, you will note from exhibit No. 5 that our national 
income increased from $2,000,000,000 in 1850 to $61,500,000,000, 
which is our estimate for the year 1938. But the significant thing to 
emphasize is that between 1910 and 1919 the average annual national 
mcome was $42,500,000,000. Between 1920 and 1929, it averaged 
$69,000,000,000 per year or an increase over the preceding 10 years 
of approximately 60 percent. 

(The chart referred to was marked "Exhibit No. 5" and appears 
on this page^ The statistical data on which this chart is based 
,are included in the appendix on p. 194.) 

Exhibit No. 5 

UNITED STATES NATIONAL INCOME 



ci'^e^s 






TOTAL 






oFK 


















M 




















A 


















\f 


\^ 


50 
40 
















y 


V- 


30 
20 
10 












^ 










\ \ 













DOLLARS 
700, 



•600 
500 
400 
300 
200 
100 



PER CAPITA 



DOLLARS 
700 



1850 "60 "70 '80 "90 1900 'lO '20 '30 

-NATIOMAL BUREAU OF ECONOMIC RESEARCH, W. I. KING. AND U. S. DEPT. OF COMMERCE 



600 
500 
400 
300 
200 
100 



6 



CONCENTRATION OF ECONOMIC POWER 



The Chairman. Dr. Lubin, won't you, for the benefit of all who 
may hear or read what is testified here, give your definition of the 
national income? I find sometimes that that phrase is confused 
with the income of the Government. 

Dr. Lubin. The national income is the total amount of goods, 
namely, clothes, automobiles, food, houses, and things of that sort, 
the total sum of all the goods plus the total sum of all the services, 
which means laundry, garage, electric utility, and every other 
service sold — the sum total of all the goods and services produced 
in the United States in any one year, and this chart portrays in terms 
of dollars what has happened to the value of all those things during 
the period covered 

Senator King (interposing). Including agriculture, of course. 

Dr, Lubin. All goods. 

Senator King. Agricultural commodities and production? 

Dr. Lubin. Anything that is produced. 

The Chairman. That covers all mining production, all agricul- 
tural production, all industrial production, and all the activities of 
trade and commerce? 

Dr. Lubin. Yes. As I was saying, between 1920 and 1929 the 
average annual income was 60 percent greater than it was in the 
decade preceding. 

Between 1930 and 1938 the national income averaged $56,000,000,- 
000. In other words, there was a decrease in the income available, 
goods, and services produced available to the American people, from 
an average of $69,000,000,000 per year between 1920 and 1929 to 
$56,000,000,000 per year between 1930 and 1938. 

For 1937 our national income was estimated by the Department of 
Commerce at $70,000,000,000. For this year the estimate is about 
$62,000,000,000, roughly, so that despite the fact that the national 
income is now relatively high as compared to the past, when you take 
into consideration the drop in national income during the early years 
of the decade vou find a marked decline from $69,000,000,000 to 
$56,000,000,000"^ 

The Chairman. How reliable are those estimates? 

Dr. Lubin. They are the most reliable estimates that are available. 
They are made by the Department of Commerce and are accepted by 
economists, statisticians, and business people of the country as the 
most reliable figures that are available. 

The Chairman. What is the basis of the various estimates? 

Dr. Lubin. What the Department does is to get such figures as are 
available, that is the amount paid out in wages, the amount paid out 
in salaries, the amount paid out in interest, the amount paid out in 
dividends, and other things of that sort, to estimate the total amount of 
income paid out. The income paid out is not always equal to the 
income produced, because some of it is saved by corporations and 
otherwise. 

The Chairman. Over what period has the Department of Com- 
merce been making these estimates? 

Dr. Lubin. I think they originally started in 1930 but they worked 
the figures back, and have been keeping them current since. 

Senator King. The Census Bureau has also made »i contribution to 
the determination of the income. 



CONCENTIIATION OF ECONOMIC POWER 7 

Dr. LuBiN. Very definitely, tlirough the Census of Manufactures 
and Census of Agriculture. 

Senator King. They make up a survej' every 2 years now, formerly 
five, and before that 10. 

Dr. LuBiN. The national income in dollars can, of course, be 
increased without more goods being produced. If the price level in 
1 year is twice as high as in the preceding year, if prices go up 100 
percent, the national income goes up 100 percent, but the physical 
goods available to the country have not been increased. 

Representative Sumners. May I ask a question, please? Take the 
construction of a house, for instance: The people who sell the tree, 
that is income, is it? 

Dr. LuBiN. That is part of the national income, yes; in other 
words, the value of the tree. 

Representative Sumners. When the tree is manufactured into 
lumber and the lumber is sold, is the total value of the lumber figured 
in the income ? 

Dr. LuBiN. It is tne uinount added to the value of the tree when it is 
in the form of lumber. 

Representative Sumners. Do they subtract from the price of the 
lumber the value of the tree? 

Dr. LuBiN. Yes. 

Representative Sumners. There is no duphcation? 

Dr. LuBiN. No, there is no duplication. 

Representative Sumners. WTien you build a house, the house is 
worth, say, $6,000, but that is not regarded as income in total? 

Dr. LuBiN. No. In other words, that house appears in the picture 
in the sense that you have the trees plus the value added in turning 
them into lumber plus the value that was added when labor was .put 
on it to build a house. 

Senator King. There are bound to be some duplications. 

Dr. LuBiN. Due to the fact that we haven't refined our statistical 
methods to the extent we would like to, but the amount of duplica- 
tion is relatively insignificant. 

The question arises as to what the increase in national income has 
meant to our people in terms of the amount of goods that has been 
available to us. This lower chart shows the trend of national income 
in terms of the people of the cCuntrj^, namely, how much is available 
for each person.' 

There you will note that between 1910 and 1919 the average was 
$428 per person. Between 1920 and 1929 the average was $607 per 
person. In other words, the income available for every man, woman, 
and child, were it equally distributed, increased 40 percent over a 
10-year period, as opposed to an increase in the total national income 
of 60 percent. In other words, part of the increase, the difference 
between the two, was due to the fact that the population was 
increasing. 

We have had to divide the national income among more people. 
The result was that your actual total income increased, as I said, by 
60 percent, whereas the amount that was available for each person 
increased by 40 percent. The significant thing to note, however, 
is that we were increasing our output faster than we were increasing 

' See exhibit No. 5, supra, p. 5. 

124491— 81)— ])f. 1 li 



8 



CONCENTRATION OF ECONOMIC POWER 



our population. In other words, there were more and more goods 
available for our citizens despite the fact that the number of citizens 
was increasing. 

The Chairman. Have any estimates of this character been made 
with respect to other nations? 

Dr. LuBiN. There are very few, sir. I have some figures for the 
year 1934-35 that show the per capita for other countries. 

Representative Sumners. Dr. Lubin, you just stated that the 
charts show there were more and more goods. Now does that mean 
necessarily more and more in volume and more and more in days' 
work: does the value of labor and the value of commodities enter in 
at all? Has that been broken down so you can really speak in 
quantity? 

Dr. Lubin. This, of course, is entirely in dollars value. My next 
chart will show you what it means in terms of actual physical goods. 

Representative Sumners. While you are interrupted, would you 
mind indicating, if you have the figures, to what extent the volume 
of immigration and the policy of this Government with regard to im- 
migration laws had to do with the increase of population? Do you 
have that? 

Dr. Lubin. We have figures showing the relative percent of in- 
crease in the population that is attributable to natural growth and 
the percentage attributed to immigration. 

Representative Sumners. You have broken that down? 

Dr. Lubin. Yes. It has been estimated by Warren S. Thompson 
and P. K. Whelpton in their monograph prepared for the Committee 
on Recent Social Trends, Population Trends in the United States, 
page 303. The figures are for the white population only.^ 

Representative Sumners. Thank you very much. 

Dr. Lubin. Between 1930 and 1938, from therp to there [indicating 
on chart], ^ that per capita income, the amount of goods and services 
available to our people as individuals, fell to an average of $442. 

The Chairman. That was from 1930 to 

Dr. Lubin (interposing). 1938. 

The Chairman. 1938? 

Dr. Lubin. Yes. In 1932 the per capita national income of this 
country had fallen to $320, which you will notice is considerably less 
than it had been in the decade from 1910 to 1919 and the decade 1920 
to 1929. 

For 1938 it is estimated that that income per capita, the amount 
available in terms of goods and services for every man, woman, and 
child in the country will be about $472, which is about $68 less than 
vas available last year and $150 more than was available in 1932. 

' See the following table: 



) 850-60. 

lsHO-70. 
1871) '^0. 



White 
popula- 
tion growth 



7. 369 yo 
7, 4 15, WO 
9. 066, 000 
U, 581, 000 



Percent 
of natural 
increase 



65.3 
72.0 
71.5 
57.1 



Growth 
due to 
immi- 
gration 



34.7 
28.0 
28.5 
42.9 



1900-10. 
1910-20. 
1920-30. 



White 
popula- 
tion growth 



11,708,000 
14, 923, 000 
13,089,000 
15,466,000 



Percent 
of natural 
increase 



68.5 
58.2 
83.0 
78.4 



Growth 
due to 
immi- 
gration 



31.5 
41.8 
17.0 
21.6 



Exhibit No. 6, supra, p. 5. 



CONCENTRATION OF ECONOMIC POWER 



9 



Congressman" Sumners, you raised the question about prices. Wliat 
we have done here is try to eUminate the changes that were caused by 
price fluctuations. As I said, you might have exactly the same amount 
of goods available, but, if prices doubled, the value of the national in- 
come would also. 

What we have done is converted these figures into 1926 dollars and 
thrown out all changes caused by price fluctuations. 

(The chart referred to was marked "Exhibit No. 6" and appears on 
this page. The statistical data on which this chart is based are included 
in the appendix on p. 195.) 

Exhibit No. 6 

NATIONAL INCOME IN CONSTANT PRICES 



1926 = 100 



JOG 



60 



40 



120 



100 



40 



20 



1850 I860 1870 1880 1890 1900 1910 1920 1930 

SOURCE U SDEPftRTMENT OF COMMERCE, NATIONAL BUREAU Of ECOtAfIC RESEARCH. W.I KING. AND BUREAU Of LABOR STATISTICS 

Dr. LuBiN. You will note that there was a sharp rise, but despite 
that fact the changes were not as great as appeared on the preceding 
chart. In other words, between 1910 and 1919 the increase in the 
national income in terms of physical goods — we are omitting values — 
was about -10 percent. Between 1920 and 1929 it was 93 percent. 
In other words we almost doubled the amount of goods and products 
produced. Between 1930 and 1937 there was an increase of only 2 
percent. 

Representative Sumners. Dr. Lubin, do you have anything to in- 
dicate the relative amount of carry-over from year to year? I suppose 
you wouldn't. 

Dr. Lubin. I think there are some figures. We have some inven- 
tory figures for certain industries. 



IQ CONCENTRATION OF ECONOMIC POWER 

This chart gives you both curves. Tliis sohd one being the change 
in terms of the current price levels, the dotted one bemg in terms of 
actual physical units. 

(The chart referred to was marked "Exhibit No. 7" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 195.) 

Exhibit No. 7 

NATIONAL INCOME 



ADJUSTMENT FOR PRICE CHANGES 




1919 1920 1925 

SOURCE: NATIONAL BUREAU OF ECONOMIC RESEARCH 



Senator King. Wouldn't it be wise to identify your charts, the 
first one No. 1, and so on? 

Dr. LuBiN. I think this is "Exhibit No. 7". I will identify them; 
I have a list of them. 

After portraying the tremendous drop that took place in our na- 
tional income in contrast to the tremendous rise hi the last decade, 
it is interesting to see what the situation is in the United Srates as 
compared with other countries. The most recent authoritative data 
for other countries are for 1934-35, and they are only available for 
four countries. You will note the average income hi 1934 and 1935 
in the United States was $432, as compared to $401 in Elngland, $345 
in Germany, $321 in Sweden, and $267 in France. 

(The chart referred to was marked "P2xhibit No. 8" and appears on 
p. 11. The statistical data on which this chart is based are included 
m the appendix on p. 195.) 



CONCENTRATION OF ECONOMIC POWER 



11 



Dr. LuBiN. In other words, despite the marked decline in the 
amount of goods and services available to our. people over the past 
9 years we are still in a far better position than many of these foreign 
countries. 

Senator King. Wouldn't you strike out the word "many" and say 
"all"? 

Dr. LuBiN. I think these are the four most important countries. 

Mr. Oliphant. Has the price factor been eliminated? 

Dr. LuBiN. They are adjusted. In other words, we have adjusted 
our relative price levels between the different countries. We adjust 
them on the basis of the exchange rates prevailing at the time. 

The Chairman. How accurate are the figures for the other coun- 
tries? 

Exhibit No. S 

PER CAPITA NATIONAL INCOME. 1934-5 



UNITED STATES 432 

ENGLAND 40! ^^HB^^HBH^^^B^H^H^^^a 

GERMANY 345 ^^^^^^^^^^^^^^H^H^H 

SWEDEN 321 |HH|H^^|H^^BBH 

FRANCE 267 ^^^^^^^^|H|||H|H 

SOURCE - TAX SYSTEMS Of THE WORLD 

Dr. LuBiN. We don't know. All we can say, they are the most 
authoritative figures we can get, some based upon Government esti- 
mates, and some on estimates by private individuals. 

Senator King. The statistical organization under the League of 
Nations has made a survey of the wages and salaries and compensa- 
tion in many countries so that that would be a rather reliable source. 

Dr. Lubin. They leave out so many other factors. You could get 
your wages; I doubt whether you could get dividends; I doubt whether 
you could get rents. 

The Chairman. In other words, they are not computed on the 
same basis as our estimate of national income. 

Dr. Lubin. No ; they are not. 



12 CONCENTRATION OF ECONOMIC POWER 

Mr. Henderson. Isn't it true that the German per capita income 
there has got to be quaUfied a bit because it is computed in terms of 
the German official exchange rate? 

Dr. LuBiN. Yes. 

Mr. Henderson. It is higher there. 

Dr. LuBiN. Yes. 

Senator Borah. It reduces itself down to the fact that these com- 
parisons with other countries are not very instructive. 

Dr. LuBiN. They are instructive in this sense, Senator: they show 
that as far as the United States is concerned, our national per capita 
income is still relatively higher. Allowing for most of the bugs that 
might get into it, no matter how you calculate it, we do come out in 
terms of a larger per capita income in the United States, despite the 
depression years, than other countries. 

WASTED RESOURCES 

Dr. LuBiN. Now, the question arises as to the effect of our chang- 
ing natiojial income upon the various groups in the community. I 
want to point first to the effect of the decline in national income upon 
the wage and salaried workers of the country. 

(The chart referred to was marked "Exhibit No. 9" and appears 
on p. 13. The statistical data on which this chart is based are 
included in the appendix on p. 196.) 

Dr. LuBiN. This chart shows the amount of employment that was 
lost in each year since 1929 on the assumption that the 1929 level 
of employment could have been maintained. The figures make no 
allowance for the fact that the population has increased. They are 
minimum estimates and assume . that the total number of people 
available for work has been exactly the same as it was in 1929. 

The extent of the underestimate is shown by the fact that the 
number of people, who are now of gainfully employable age, is approxi- 
mately 6,000,000 greater than it was at that time. 

Assuming a working population of the size of 1929, you will note 
that if you add the employment lost in '30, '31, '32, up to 1938, the 
total number of man-years lost during that period of time was 
43,435,000. Or, to put it in other words, if everybody who had worked 
in 1929 continued their employment during the past 9 years, all of 
us who were working could take a vacation for a year and 2 months 
and the loss in national income would be no greater than it has 
actually been. 

There has been a large amount of discussion in the press regarding 
our armament program. If we had employed everybody who was 
working in 1929 constantly during the last 9 years, we could all stop 
our regular work and all the gainfully employed wage and salaried 
workers could go to work on armaments for a year and 2 months 
and the net effect on the national income would be just about the 
same as took place during the period from 1930 to 1938. 

Representative Sumners. Dr. Lubin, was there a greater loss in the 
relative total of people who worked and the people who farmed, or 
any other group of that sort? 



CONCENTRATION OF ECONOMIC POWER 13 

Dr. LuBiN. I am going to come to that right now, Judge Sumners. 
Now, what does this loss of employment mean in terms of wages and 
salaries? 

Exhibit No. 9 

EMPLOYMENT LOST IN DEPRESSION 



IN NON-AGRICULTURAL OCCUPATIONS 



.T 



40 



30 



QLL 



I EMPLOYMENT 

I EMPLOYMENT LOST 






40 



IJM 



10 



1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 



TOTAL LOSS 
1930-38 



. BUREau OF LABOR STATISTICS 



(The chart referred to was marked "Exhibit No. 10" ana appears 
on p. 14. The statistical data on which this chart is based are 
included in the appendix on p. 196.) 

Dr. LuBiN. That picture is portrayed here. Assuming that the 
total amount of salaries and wages paid out in 1929 had remained 
imchanged and these losses had not occurred, the total amount th«t 
would have been paid out in dollars to our wage and salaried worl.t r? 
would have been $119,000,000,000 more than it actually was 



14 



CONCENTRATION OF ECONOMIC POWER 



The Chai^ an (interposing). How much? 

Dr. LuB. iJl 19,000,000,000. In other words, our loss during 
these years was 240 percent of the actual amount that was paid out 
in salaries and wages in 1929. That loss was 50 percent greater than 
the total national income paid to farmers and merchants and business 
men and labor and everybody else in 1929. 

Exhibit No. 10 

SALARIES I WAGES LOST IN DEPRESSION 



IN NON-AGRICULTURAL OCCUPATIONS 



SALARIES AND WAGES 
SALARIES AND WAGES LOST 



50 



40 



I 



mn 



■ni 



120 



90 



80 



70 



40 



30 



1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 TOTAL LOSS 

1930-38 

-,'y^='Ci - U S CEPADTMEUT OF COMMEHi^t 

The Chairman. Let me ask it this way: What was the total 
national income in 1929? 

Dr. LuBiN. Approximately $81,000,000,000. 



CONCENTRATION OF ECONOMIC POWER 



15 



The Chairman. And what is this total of the lost income? 

Dr. LuBiN. One hundred and nineteen biUion for wage and salaried 
workers alone. 

The Chairman. So it is one hundred and nineteen billion compared 
with eighty billion, you say? 

Dr. LuBiN. Eightj^-one billion for ever>^body. 

The Chairman. Eighty-one bilhon, the largest single year in the 
history of the country. 

Dr. LuBiN. Exactly; and this is the loss only to wage earners and 
salaried workers. 

Now, in terms of losses to investoi-s, assuming again you could have 
maintained your 1929 level of dividends paid out, the cumulative 
loss is $20,100,000,000, whi6h is three times the amount that was 
actually paid out in 1929, the peak year of dividend disbursements. 

(The chart referred to was marked "Exhibit No. 11" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 196.) 

Exhibit No. 11 

DIVIDENDS LOST IN DEPRESSION 




Dr. LuBiN. If we turn to the farmers, the total loss in the gross 
income that went to them, as compared to what they got in 1929, was 
thirty-eight bilUon four hundred milhons, which is three times the 
amount that all the farmers got for everything they sold in the year 
1929. In other words, the net loss over this period of years is equal 
to thi'ec times the amount they actually got in 1929. 

(The chart referred to was marked "Exhibit No. 12" and appears on 
p. 16. The statistical data on which this chart is based are included 
in the appendix on p. 197.) 

Representative Sumners. It doesn't look as though anybody is 
doing very well. 



16 



CONCENTRATION OF ECONOMIC POWER 



affected, and these arJ^tCflLo.^ ''''^ ^^^^^^^ '^^out the groups 
laborers and farmers What T -"- f}^'''\^-''^ gr«^P«> the invlstoS, 
relative loss to each'f thYse^liergrolps"^*"^ '' ^' '' '' ^^^^ ^^^ 

Jup ^?h"tro\?r^;7L'rramp\^'Se l^"^"^^ 'W'^'' '' ^^^ 
as compared with the loss incurrThv w. ' incurred by investors 

the loss incurred by farmers? ^ ^^^ ^^'''^''' ^' ^^^P^^ed mth 

toi^[he^""we"rem air' ' ^'^^^' '"^ ^ ^^^^^ -^^^ ^dd them 
The Chairman. It could easily be read from these charts? 

Exhibit No. 12 



GROSS FARM INCOME LOST IN DEPRESSION 




1930 1931 1932 1933 

S KRWTKEXT Of aOmCULTURE 



'934 ,935 ,936 ,937 ,938 TOTAL r5ir 

1930-38 



the Wrto^agTL" Iture'^'tL Ws to T 'T""''' '^^-^^^^^ ^« ^^bor, 
that we could haTmkintaS^ 

$133,000,000,000 as cZparTtih a .ir-^'S^^-^^' '^ ^.°^«^^*^ ^^ 
$81,000,000,000. IncidSv ir/i^ie ^^*">^/l income in 1929 of 
effect of price changes; ^ot/erw^^^^^^ I am hLi "^' elimmated the 
physical units of goods SnIZt%LT.t^^^ ^'''' ."^ ^^"^ ^^ 
income as arose froL price cCgef^ '""'^ '^^^^^^ "^ *b« ^^^io^al 
(Ihe chart referred to was marked "Exhibit Nn iq" ^ 

incomf for^l928?''- ^'^ ^"''^' ''''™ y°" "^o f'^™ i"""™ or agricultural 
Dr. Ldbin. Yes, right here, sir. 



CONCENTRATION OF ECONOMIC POWER 



17 



Senator King. That last answer you made I didn't quite under- 
stand . Did you take into account in determining these prices the 
fact that we had changed our dollar? 

Dr. LuBiN. I did here, yes, definitely. This is a stable dollar, the 
1929 dollar, in terms of the purchasing power of the 1929 dollar. 

The Chairman. Now you are referring to the chart entitled "Na- 
tional Income Lost in Depression"? 

Dr. LuBiN. Yes. 

Senator King. Taldng into account that the gold dollar had a 
certain quantity? It has been inflated so that $35 is paid for an ounce 
of gold. 

Dr. LuBiN. This takes into account the purchasing value of the 
dollar at 1929 prices. 

Exhibit No. 13 

NATIONAL INCOME LOST IN DEPRESSION 




Representative Sumners. Dr. Lubin, in using the figures for 1929 
as a base, were those prices and incomes and figures for 1929 above 
normal, considering the general situation? 

Dr. LuBiN. ^Yeli, of course I wouldn't want to discuss the concept 
of normal; they were higher relatively than they had been. 

Representative Sumners. Would you permit a clarifying state- 
ment? If as a matter of fact in 1929 prices were stimulated beyond 
where they ought to be, would it be a structural base upon which to 
calculate these other changes? 

Dr. LuBiN. It doesn't make much difference, Congressman, which 
year you pick as long as you keep the level constant. In other words, 
we could have taken 1926 and the result would be the same, or 1923 
or 1921. The idea is to convert them all into the price level of a 
single year. 



18 CONCENTRATION OF ECONOMIC POWER 

Senator King. Your figures are not based upon the quantity of 
production, but upon prices. 

Dr. LuBiN. This is tlirowing out all price changes; this is a quanti- 
tative and not a value measure. 

Senator Borah, in reply to your question, the gross farm income of 

1928 was $11,741,000,000; in 1929 it was $11,941,000,000; in 1930 it 
was $9,800,000,000, so that in 1928 and 1929 they were about on a 
par. In 1930 the first drop came. 

Senator Borah. The point is, if you permit me, that in 1928 and 

1929 the income of agriculture was not sufficient for agriculture to 
maintain itself. 

Dr. LuBiN. Exactly so. In other words, you have what some con- 
sider to be a double loss. You have a loss that existed in 1928 and 
1929 in the sense, as you say, that there wasn't sufficient income to 
maintain the whole agricultural population, plus a further loss that 
took place because of the loss in gross income that arose in later years. 

Senator King. I suppose you haven't attempted to determine — it 
probably would be beyond the scope of your activities— the contribut- 
ing factor to the decline in agriculture resulting from diminution in 
our foreign market. 

Dr. LuBiN. That question, Senator, will probably be discussed later 
on in the hearings. I am not attempting to explain why these changes 
occurred. All I am trying to do is to show what actually did happen. 

Senator King. Speaking objectively. 

Dr. LuBiN. Getting back to this chart,' as I said, the total national 
income in 1929 was $81,000,000,000. The loss in national income 
accumulated over this period of years was $133,000,000,000, which 
means you have an accumulated loss which was about 164 percent of 
the 1929 income. However, I want to point one thing out. In 1937 
we almost got back to the 1929 level, in terms of physical goods and 
services. 

Senator King. Is that volume of production or prices? 

Dr. LuBiN. This is volume, taking the prices out. If you convert 
this loss into the amount of goods available to the people of this 
country, it is equal to a thousand dollars over the last 9 years for 
every man, woman, and child in the country. In other words, if this 
amount of income in terms of ph3'sical goods had not been lost there 
would have been available, as a present to every man, woman, and 
child, if we wanted to give it to them a thousand dollars more than 
was actually available. 

Representative Sumners. Would it interrupt you to ask this ques- 
tion, whether or not you have a chart or study that would indicate 
the relationship between the breaking down of the purchasing power 
of one group and the general effect upon the whole group for the total? 

Dr. Lubin. We do have the relationship between the amount paid 
out to workers in factories and gross farm income. I haven't brought 
it with me but there is a chart that has been put out by the Depart- 
ment of Agriculture which shows a very close correlation. The lag is 
in agriculture; in other words, as pay rolls go down, a decline in agri- 
cultural income starts. As pay rolls go up, agricultural income starts 
going up. The reason is simple. Our primary market for agricultural 
products is the United States, and since the largest single group in- 

' Exhibit No. 13, supra, p. 17. 



CONCENTRATION OF ECONOMIC POWER IQ 

the United States are wage and salary workers, and since they buy 
more farm products as their incomes go up because of more work and 
more income, the farm situation improves. 

Representative Sumners. Isn't the farmer's economic condition, 
though, determined perhaps as much by price as by quantity? 

Dr. LuBiN. It is, and of course the prices of some of bis products 
are determined in the world markets. On the other hand, prices of 
other types of commodities, vegetables, millv, and dairy products, and 
other commodities of that sort are very little affected by world 
conditions. 

Representative Sumners. But the vicinity which produces for agri- 
cultural export, ma}" swing to dairy and truck farmuig and that sort 
of thing. I don't want to get into any argument about it, but it 
makes it practically standard. I don't v.'ant to lead you too much 
into that. 

Dr. LuBiN. The important thing is that in terms of dollars that are 
available to farmers they do move up and down with the number of 
dollars available to wage earners, which gives you some idea of the 
part the domestic market plays in our economy. 

Senator King. I don't want to interrupt, but isn't it a fact, however, 
going back for many, many years prior to the discovery of gold, for 
instance, in California, when there was a great output of gold and 
precious metals, that prices had gone up and down and there had been 
radical and material changes in not only the volume of production 
but in the price of the commodities? So there is no static situation 
where the wages are the same and the volume of production the same. 

Dr. LuBiN. No; there isn't. You can, however, throw out those 
fluctuations in prices and convert your national mcome, as we have 
on this chart, into terms of physical units. That is what I have done. 

Senator King. Isn't it a fact that the monetary situation, the mon- 
etary status, hasn't much to do with prices? 

Dr. LuBiN. I am not going to speak as an authority on prices. 

Senator King. It is obvious if you have inflation your prices will 
go up. 

Dr. LuBiN. Yes; that is what inflation is. 

Mr. Oliphant. I should like to get a httle further information on 
the basis of comparison. You mentioned the fact that you could 
have eliminated the price factor by choosing any other year. Isn't 
it true from the standpoint of those primary industries with the 
largest volume, 1929 is very significant because in that year we came 
nearest to capacity? 

Dr. LuBiN. It was the peak year in terms of using our resources, 
both human and physical. 

Representative Sumners. One point I wish you would put in the 
record, or have somebody put in the record, I believe— it is my 
opinion — that historically it is a fact that the prices of agricultural 
commodities broke first, and when those prices broke, they broke so 
low that they paralyzed the buying power of the farmers, they just 
couldn't buj^. It was a paralysis of the economic circulatory system, 
beginning with the paralysis of the buying power of the farmer. It 
seems to me you might at some point, if you mil be good enough, put 
something in of that nature. , 

Dr. LuBiN. As a matter of fact, we have available, have prepared 
for the committee, a whole series of charts and tables dealing with 



20 



CONCENTRATION OF ECONOMIC POWER 



what has happened to prices during the last hundred years, and par- 
ticularly in the period from 1920 to date, and I understand that at 
a later date. Judge, we shall discuss the whole course of prices. 

Representative Sumners. I hope you will pardon me for anticipating 
that discussion. 



Exhibit No. l^A 



DISTRIBUTION OF NATIONAL INCOME 
BY TYPE OF PAYMENT 

(EXCLUDING 60VERNMENT) 




1919 20 21 22 23 24 25 26 27 28 '29 30 '81 32 33 '34 '35 36 '37 '38 '39 1940 



tumutt, miiKoiPOMrio msimmis, mm tntu, (tc. 



Dr. LuBiN. Now the question was raised by Senator O'Mahoney 
as to what proportion of our income goes to the different groups. 

(The chart referred to was marked "Exhibit No. 13-A" and appears 
on this page. The statistical data on which this chart is based are 
includea in the appendix on p. 197.) 



CONCENTRATION OF ECONOMIC POWER 



21 



Dr. LuBiN. You will notice there has been a very marked shift 
over a period of years in the total portion of the national income that 
is going to different groups. 

The Chairman. May I interrupt you just to make a suggestion, 
that when you refer to a new chart, it would be well to identify the 
chart so that it will appear in the record what particular chart you 
are referring to. 

Senator King. That is the reason I asked that they be numbered. 

Dr. LuBiN. This chart shows the monthly income payments from 
1929 to date: In other words, indexes of the actual amount paid out 

ExHiBrr No. 14 

MONTHLY INCOME PAYMENTS 



INDFX NUMBER 1929 • 100 (Adjusted for Seasonal Variation) 




1929 1930 1931 

SOURCE: U S. DEPT. OF COMMERCE 



each month to labor, to farmers, businessmen and country mer- 
chants; amount paid out in interest; amount paid out as direct relief; 
and the amount paid out to veterans by the Government. Back in 
1929, 66 percent of the total amount went to labor. 

(The chart referred to was marked "Exhibit No.. 14" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 198.) 

The Chairman. In other words, this is an analysis of the distribu- 
tion of income payments during the years from 1929 to 1938 among the 
various groups? 



22 



CONCENTRATION OF ECONOMIC POWER 



Dr. LuBiN. Yes. In 1937 it is estimated to be 67 percent for labor. 
The next group, the entrepreneurial group, includes, as I have said, 
businessmen, farmers, and so forth. This group got 12 bilHon in 1929, 
including agriculture.^ In 1937 they got about 10.4 billion. The 
people who received dividends and interest received about 11.3 billion 
in 1929, and last year they got about 9.6 billion. The balance, you 
will note, is relief and payments to veterans. The significant thing 
is that the amount going to labor decreased from 51.5 to 46.7 billions; 
businessmen and farmers, from 12 to 10.4; dividends and interest, 
11.3 to 9.6, wliich is less than a sixth of the total; and the amount 
paid out in direct relief, of course, growing larger over the later years, 
although you note there was an item of relief — private and other- 
wise — in the earlier years. 

Senator King. I didn't quite understand your statement as to the 
percentage received in wages and salaries for 1935. Did you give that? 

Dr. LuBiN. No; it was 66.5 percent. In 1929 labor got 51.5 billion 
dollars; in 1938, October, the rate was "about 44 billion a year. 

Senator King. In percentage, would not wages and salaries reach 
74 percent of the total income? 

Dr. LuBiN. In 1937 it was 67.4 percent and that is the highest year, 
according to our figures. 

Senator King. The figures which I have here were 70 percent, 70.2. 

Dr. LuBiN. Senator, the latest figures on the percentage distribution 
of income payments, compiled and published by the United States 
Department of Commerce, are as follows: 





1929 


1930 


1931 


1932 


1933 


1934 


1935 


19.36 


1937 


National income paid out 
(in dollars) 


78, 556 


73, 200 


62, 032 


40, 024 


15,317 


51,510 


55, 137 


62, 586 


69, 330 


Percent diMributicn of this 
total 1 

5. Total compensation of 
employees 


65.6 
64.4 


64.9 
63.5 


64.7 
63.0 


64.4 
62.2 


C5.3 

61.7 
1.5 


66,1 

61.5 
2.9 


66.5 

62.1 
2.6 


66.9 

60.8 
3.9 

.6 
1.7 

14.2 
6.8 
7.4 

15.3 
3.6 


67.4 


(a) Total salaries and 
wa?es 

(h) Work-relief wares'.. 

(c) Social Security con- 
tributions of em- 


61.8 
2.7 

1.3 


(d) Other labor income. 
2. Total dividends and in- 


1.2 

14.4 
7.6 
6,6 

15.6 
4.4 


1.4 

15.5 
7.9 
7.4 

15.8 
3.8 


1.7 

16.0 
7.0 
8.5 

15.9 


2.2 

IG. 3 
5.6 
10.2 

16.1 
3.2 


2.1 

15.7 
4.9 
10.4 

15.9 
3.1 


1.7 

15.0 
5.4 
9.4 

15.6 
3.3 


1.8 

14.2 
5.5 
8.6 

15.8 
3.5 


1.6 
13. S 


(n) Dividends 

(ft) Interest 


7.2 
6.7 


3. Entrepreneurial with- 

drawals... ..- 

4. Net rents and royalties... 


15.1 
3.7 



I Net savings of business concerns, sometimes positive and sometimes negative, are not included in this 
total. They affect primarily the value of the equity of stockholders and entrepreneurs. 

' Includes pay roll and maintenance of Civilian Conservation Corps enroUees and pay rolls of Civil Works 
Administration, Federal Emergency Relief Administration, and the Federal Works Program projects, plus 
administrative pay rolls outside of Washington, D. C, for all e.\cept the Federal Work« program. Area 
office employees and pay rolls under the Federal Works Program are included with the regular Go^•e^nment 
employment and pay-roll figures. 

' Includes also net balance of international flow of property incomes. 



in determining the percentages, you 
Kaznuts, and others. I have them 



Senator King. I wonder if, 
used the figures of Dr. King, 
here. 

Dr. LuBiN. Our figures come from the United States Department 
of Commerce. 



CONCENTRATION OF ECONOMIC POV, ^H 23 

The Chairman. Dr. Lubin, may I ask whether you would prefer 
to go through without interruptioE in the development of your state- 
ments and then submit to questioning later? 

Dr. Lubin. Frankly, it makes no di;ference. If there is anything 
that ought to be clarified at a given moment, I would prefer to do so. 
It makes no difl^erence to me. 

Senator Borah. I suspect it would be better clarified if you would 
go ahead and make your statement. Of course, questions can be asked 
afterward. 

It seems to me there ought to be a continuity of statement from his 
viewpoint. 

Exhibit No. 15 

NATIONAL INCOME BY TYPE OF INDUSTRY 



100 




1919 20 "21 "22 '23 "24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 '36 '37 



SOURCE ■ NATIONAL BWSAU Of ECONOMIC RESEARCH 



The Chairman. If there is no objection, we will permit Dr. Lubin 
to proceed without interruption unless it should be for some really 
serious questions. 

Dr. Lubin. With the decline in national income, with the change 
in amount of goods that have been available to our people, has come 
a very definite shift in certain parts of our economy. This chart 
which shows national income by , type of industry gives us a very 
good picture of the relative importance of the industries that produce 
goods and services. . 

(The chart referred to was marked "Exhibit No. 15" and appe^-rs 
oil this page. The statistical data on which this chart is based are 
included in the appendix on p. 200.) 

124491—39 — pt, 1 3 



24 CONCENTRATION OF ECONOMIC POWER 

Dr. LuBiN. You will notice that in 1919 about half of the value of 
things produced in the United States were produced by factories, 
farms, and other organizations that produced physical goods. About 
half of the value was contributed by the so-called service industries 
of the country, the retail distributor, wholesale distributor, and things 
of that sort. 

By 1929, this part contributed by the producers of physical goods 
had fallen to 42 percent, and the noncommodity-producing groups 
had increased their proportion of the output to 58 percent. By 1932^ 
the value contributed to our national economy by the commodity- 
producing industries had fallen to 29 percent of the total; whereas, 
the value of the things produced in the so-called service industries 
constituted over 70 percent of the total. In other words, the latter 
have become proportionately greater contributors to the national 
income of the country. 

One thing should be borne in mind. When you have a depression^ 
factories curtail their output faster than other businesses. People still 
use electricity; they still use gas, and the result is you get a situation 
where proportionately these industries become much more important. 

On the other hand, there is also a price factor there that must be 
borne in mind. Public-utility rates don't go down as quickly as other 
prices. A lot of other service prices do not go down as quickly as 
commodity prices, and the result is that the total value of the prod- 
ucts of the noncommodity-producing industries becomes greater 
relatively to the total. 

Now I would like to compare on this chart the production of our 
industries, on a total and a per-capita basis. 

(The chart referred to was marked "Exhibit No. 16" and appears 
on p, 25. The statistical data on which this chart is based are 
included in the appendix on p. 200.) 

PRODUCTION OF COMMODITIES IN PROSPERITY AND DEPRESSION 

Dr. LuBiN. Our industries, mining, manufacturing, and so forth — 
this is industrial production only and omits agriculture — our indus- 
tries produced a relatively small proportion of the total income in 
1936 as compared to the year 1899; yet there was a very marked 
increase in the growth of manufacturing and mining in that interval 
of time. As a matter of fact, the increase in the total goods produced 
by our industries was from about 100 in 1899 to 167 in 1910, whereas 
the per capita output of our industries increased from 100 to 135. In 
other words, the output of our factories and mines was growing at a 
rate much faster than our population, with the result that in 1910 
every consumer in this country was using about 35 percent more 
goods than in 1899. In other words, the amount of goods available 
to the individuals of this country was 35 percent greater, at least in 
terms of products of mines and factories, than it had been in 1899. 
The answer of course is that industry was growing at a much more 
rapid rate than population with the result that you had gotten to the 
point where each person had more goods. 

In 1929 our manufacturing industries were producing approximately 
three times as much as they had been in 1899, and despite the increase 
in our population, the per capita production also increased. The 
result was that twice as much goods were being produced for each 



CONCENTRATION OF ECONOMIC POWER 



25 



person in the year 1929 as had been produced for each consumer in 
1899. 

In 1932, however, our total Production fell back to 171, which put 
us back to just about where we had been in 1914. In per capita 
terms the amount of production fell from 197 in 1929 to 102 in 1932, 



Exhibit No. 16 



UNITED STATES INDUSTRIAL PRODUOION 



1899 = 100- 



INDEX 












TOTAL 














INDEX 


300 
























U ^ 


300 


250 






















r 


f 


m 


250 
200 
150 


150 


















N 


^ 


1 


V 


y 




100 
50- 






.^ 


f^ 


^ 


r^ 


^ 


/ 










i . 


100 
50 


■ 

o"- 


"f^ 


.....1 






















1 








PER CAPJTA 




I863'65 '70 75 '80 85 "90 95 1900 05 10 '15 20 25 "30 '35 



so that in terms of the products of our factories and our mines, the 
average citizen in this country had about as much available as he did 
in 1899. In other words, we were set back exactly 33 years in terms 
of the production of our mines and factories and the goods produced 
that were available to each of our people. We reached 167 last 



26 



CONCENTKATION OF ECONOMIC POWER 



year — and at the present time we are down to about 128, which puts 
us back at the level of about 1905 on a per capita basis. 

In this chart on the physical volume of industrial production I have 
attempted to repeat the preceding chart, but in more simple form in 
order that you may see more clearly the tremendous declines that 
have taken place during the last 20 years. 

(The chart referred to was marked "Exliibit No. 17" and appears on 
this page. The statistical data on which this chart is based are included 
in the appendix on p. 201.) 




CONCENTRATION OF ECONOMIC POWER 27 

Dr. Lui3iN. If you start with 1919, you will notice that our physical 
production rose in 1920, folloM ed by "the depression of 1921. It rose 
again in 1922 and by 1929 we were producing 25 percent more goods 
than in 1922 and 1923. However, this 25 percent more output soon 
thereafter declined to 42 percent below where it had been in the 1923- 
25 period. By December 1936 however, we had regained virtually 
all of the loss since 1929 and we were within 3 percent of the peak of 
1929. Then followed another decline in physical production during 
which the actual amount produced fell to approximately the level of 
1922 and for 1938 we estimate that the level will run about 86. 

As a matter of fact, it is estimated that last month we produced 
101 percent of what we did during the 3-year base period, 1923-25. 
Senator King. Physical production? 
Dr. LuBiN. Physical production. 

Now, the question to be answered is: Just where in our economy 
did these declines occur? 

(The chart referred to was marked "Exhibit No. 18" and appears 
on p. 28. The statistical data on which this chart is based are includiBd 
in the appendix on p. 201.) 

Dr. LuRiN. I have attempted to break down the output of our 
factories and our mines in terms of the relative importance to the 
American economy of so-called durable goods and so-called non- 
durable goods. 

Durable goods, as we define them are any goods that are consumed 
over a period of years or period of time; in other words, automobiles, 
refrigerators, ■ locomotives, machinery, buildings and things of that 
sort. Houses, of course, are the most important of these goods. 
Some are used directly by consumers, some are used in producing 
other goods. 

I think it is rather important that we note the relative increasing 
importance of the so-called durable goods in the American economy. 
You will note that between 1879 and 1929, the importance of durable 
^oods industries which contributed 31 percent of our industrial output 
m 79, had risen to the point where they were almost half of our out- 
put, 44 percent. By 1933, however, their part in the economy had 
fallen markedly. 

I might say for the record, Mr. Chairman, that this is not a chart 
based on Government figures. It was prepared by the National 
Bureau of Economic Research in New York, and made available to 
us by its director, Dr. Wesley C. Mitchell. I feel they should get 
credit for the chart. 

Here is a chart showing total manufacturing output. 
(The chart referred to was marked "Exhibit No. 19" and appears 
on p. 29. The statistical data on which this chart is based are 
included in the appendix on p. 202.) 

Dr. LuBiN. You will note that nouvlurable-goods production varied 
very little throughout this whole period of time. However, every 
break in this index (total manufacturing) was primarily caused by a 
break in the durable goods industries. 

Compare this break (durable) to that (nondurable), and you can 
see the importance the break in durable had in this total drop from" 
1929-32. 

Similarly during the rise of the past few years you will note that 
nondurables remained virtually static while durables went up. They 
accounted for the major part of the total rise. Apparently the modern 



28 



CONCENTRATION OF ECONOMIC POWER 



depression is a durable-goods depression; that is, housing and refrig- 
erators and automobiles are among the first things that people appar- 
ently stop buying, plus the fact that industries stop investing in new 
equipment and plant. 

Exhibit No. 18 

OUTPUT OF COMMODITIES 




NATIONAL BURf »IJ Of ECONOMIC RtSEASCH 



^ NON-DURABLE COMMOaTIES 
^ DURABLE COMMODITIES 



If we compare the line of the output of our factories and mines with 
the line which shows the output of agriculture, we see that farmers 
don't stop producing when other people stop producing. 

(The chart referred to was marked "Exhibit No. 20" and appears 
on p. 30. The statistical data on which this chart is based arQ in- 
cluded in the appendix on p. 204.) 



CONCENTRATION OF ECONOMIC POWER 



29 




30 CONCENTRATION OF ECONOMIC POWER 

Dr. LuBiN. As a matter of fact there has been a steady increase in 
the total agricultural production, with relatively small declines here 
and there, seldom amounting to more than 10 percent. There was 
a drop during the period 1934, '35, '36, but soon another increase 
occurred. The total output in 1937 was higher than in any previous 
year. 

Senator King. This is still volume? 

Dr. LuBiN. Yes. 

Representative Reece. Is it your intention to explain what causes 
the demand for goods? For instance, the cause that gives demand 
for agricultural goods you mentionied, and those that give demand for 
other commodities. 

Exhibit No. 20 

UNITED STATES AGRICULTURAL PRODUCTION 

I923-25-I00 



P^^^ 



Dr. LuBiN. I do not intend to explain it today but I think some- 
time in the course of the hearings that question will be brought into 
the picture. All I am attempting to do is to show how the economy 
has failed to produce the goods that we ought to have to maintain 
our standard of living, and I have attempted to point out the weak 
spots in the system in terms of factory pi'oduction, agriculture, and 
so forth. 

Representative Reece. It seems important that Agriculture has 
produced too much and industry has produced too little. In other 
words, whether the legitimate demand for goods has been over sup- 
plied or under supplied. 

Dr. LuBiN. I don't know whether one could answer that specifi- 
cally. The reason agriculture may appear to have produced too much 
is because other folks are producing too little, or vice versa. I don't 
know that one can say that at any time too much is produced because 
there is always a possibility of increasing the standard of living. 
Of course, there may be a maximum limit to certain types of goods 
that people will consume, but I don't think we, in the United States, 
have ever reached that stage, even in cotton, wheat, or any other 
products; that is on the basis of what we could consume if we were 
going to maintain what we think of as an American standard of 
living. 



CONCENTRATION OF ECONOMIC POWER 31 

Mr. Oliphant. 1 have a question on this, a further word of explana- 
tion on the significance of the chart headed "Federal Reserve Index 
of Manufacturing Production." ^ Are there particular nondurable 
goods, the volume of which follow the pattern of the lower one and 
also particular durable goods which follow the pattern of the other 
line? 

Dr. LuBiN. I am going to break that down in a few minutes into 
individual commodities so you can see what their course has been. 

Mr. Oliphant. That is, th'e difference there is a rough and ready 
difference. 

Dr. LuBiN. Yes. 

Senator King. If I may be pardoned, having referred to agricul- 
tural production, did you discover in your investigation the fact 
that the exports of agricultural commodities such as cotton, wheat, 
corn, beef and lard, and so on, had been reduced during the past 8 
or 10 years? 

Dr. LuBiN. Very definitely. The Secretary says that Dr. Thorp 
is going to deal with the export and import problem. 

The Chairman. Have you made a chart showing the per capita 
production of agricultural commodities? 

Dr. LuBiN. We have the figures. I haven't a chart of them. I 
could put them in the record. 

The Chairman. Don't you think that would be an interesting 
thing to show in the record? 

Dr. LuniN. Yes; they %vill be shown in the appendix with figures 
for "Exhibit No. 20".^ 

Mr. Oliphant raised the question as to various types of industries 
and whether their pattern follows the pattern of the manufacturing 
industries as a whole. Here is the pattern of building construction 
for the last 20 years; you will note that the peak was in '25, while 
the peak in manufacturing was in '29. 

(The chart referred to was marked "Exhibit No. 21" and appears 
on p. 32. The statistical data on which this chart is based are 
included in the appendix on p. 205. 

> Exhibit No. 19, supra, p. 29. 
» Infra, p. 204. 



32 



CONCENTRATION OP ECONOMIC POWER 

Exhibit No. 21 

VALUE OF ALL CONSTRUCTION 





/■ 


^.. 








/ 


\ 




/ 




y. 


\ 


\ , 


/ 








\y 










V.-^ 



















""* ■ ^RES.I)£NT1.L 








/ 


\ 






^ 






^^ ^ 







■ J 












^^^ — " 


^\ 


Pl»lV»Tt NON-RtSIMNTIAL 


/ 



















^■^'^f'MK.yZy^ 


^ 




' 











1920 
SOURCE: NATIONAL BUREAU OF ECONOMIC RESEARCH 

Dr. LuBiN. You will note that the low point in construction was 
reached in 1933-34, while the low point in industrial production was 
reached in 1932. You will note further that the peak of residential 
building was reached at about the same time as the peak in total 
building, whereas the peak in private nonresidential, which means 
factories, office buildings and so forth was not reached until 4 years 
later. The peak in pubhc works wasn't reached until 1936. In other 
words, even in the building industry you have a varying pattern of 
output. 

If you take the figure of residential construction, which, after all, 
is the most significant factor in the American building industry, you 
will note.some rather significant things. 

(The chart referred to was marked "Exhibit No. 22" and appears 
on p. 33. The statistical data on which this chart is based are 
included in the appendix on p. 205.) 



CONCENTRATION OF ECONOMIC POWER 



33 



8 



15 

e 9 



1 


1 § i ! 


o 


J 

s 




■ 


\ 




/ 


) 




i 


/" 


y 




s. 




V 




N 


$ 


^ ^ 


i 


? 1 


1 *'• 





i 


> o 






\ 


< 

1 




)- 


1 

/ 


/ 




\ 


\ 


\ 



I I i 




If 

is 


i 










1 1 




1 







^ 


«. • 








^ 




\ 




^1 -V— ^ 




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ji \l 








•=^i— V- 




s 


















f/t 


% 






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■^ i - 

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V 




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:::^ 


n 


% 


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i 








i 


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> 



34 



CONCENTRATION OF ECONOMIC POWER 



Dr. LuBiN. You will note that the actual number of residences 
that were built fell from 937,000 units in 1925 to 54,000 in 1933. 
Industrial production, of course, never changed at such terrific rates. 
Even in 1937 the number of dwelling units erected wafe only up to 
294,000. In terms of one-family units, we are just about back to 
the point where we shall produce 250,000 units this year. 

On the other hand, the number of two-family houses being built in 
the United States is still virtually zero. 

As a matter of fact, the actual number of two-family houses built 
in 1934 was 3,000. The actual number of apartments built in 1932 
was only 7,000, whereas one-family houses never fell below 39,000 
units and in 1937 aggregated iti excess of 233,000. 

It is interesting to compare the trend of housmg in various parts 
of the country. You will note that the Northeast got far above the 
rest of the country, fell to approximately 18,000 units per year, and 
now is gradually going up. You will notice, on the other hand, that 
-the South is moving up relatively much faster than the Northeast, 
The North Central States come in some pla-ce between the Northeast 
and the South. In terms of the speed of development the South is 
moving faster in new housing than any other part of the United 
States. 

Coming back again to the question of the trend of production in 
various industries as compared with industry as a whole, you will 
note, Mr. Oliphant, the curve of production from 1910 in cement. 

(The chart referred to was marked "Exhibit No. 23" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 206.) 

Exhibit No. 23 



PRODUCTION AND CAPACITY OF PORTLAND 
CEMENT MILLS - 1910-1^3? 




1910 1915 1920 1925 I'W 

SOURCF: BUREAU OF MINES. U. S. DEPT. OF INTERIOR 



Dr. LuBiN. You will note that starting out with the capacity of 
approximately a hundred million barrels a year, capacity kept in- 
creasing steadily up through 1932, when it was 225,000,000 barrels 
a year. Production, on the other hand, reached its peak in 1928, 
went down, and has not come back as far as industry as a whole has 
come back. The situation of pig iron is similar. 



CONCENTRATION OF ECONOMIC POWER 



35 



(The chart referred to was marked "Exhibit No. 24" and appears 
on this page. The statistical data on which this chart is based are 
inckided in the appendix on p. 207.) 

Dr. Lubin. Capacity kept increasing and then flattened out. Pro- 
duction mov^d up and down, reached a peak of 42,000,000 gross tons 
in 1929, and fell to 9,000,000 in 1932. It was back to 37,000,000 tons 
last year. 

The Chairman. Dr. Lubin, what is your explanation of the fact 
that this chart would indicate that some time in 1916 or '17 production 
exceeded capacity? 

Dr. Lubin. War orders. You had a tremendous demand for steel, 
and capacity was stepped up to take care of them. The industry 
opened blast furnaces that had been shut down for years in order to 
fill the orders. 

Exhibit No. 24 



PIG IRON PRODUCTION AND CAPACITY OF 
BLAST FURNACES - I^JO-I^^T 



MrUIONS OF GROSS TONS 




190 19(5 I9Z0 1925 

SOURCE: AMERICAN IRON AND STEEL INSTITUTE 



Senator King. There were demands from abroad, from the warring 
nations, and then we took it on ourselves. 

The Chairman. My thought was, how could production exceed 
capacity to produce? 

Dr. Lubin. We are talking about "practical" capacity — in other 
words, efficient capacity. 

The Chairman. I see. I couldn't see the word "practical" from 
this point. 

Dr. Lubin. You find the same thing true of automobiles, rising from 
less than 2,000,000 in 1919 to 5,350,000 in 1929, falling to 1,370,#00 
in 1932, which was less than they produced even in 1919, 13 years 
previously, and back again in 1937 to 4,800,000. 

(The chart referred to was marked "Exhibit No. 25" and appears 
on p. 36. The statistical data on which this chart is based are 
included in the appendix on p. 207.) 

Senator King. Those two charts show a close relation between the 
production of pig iron and the increase in the production of auto- 
mobiles. 



36 CONCENTRATION OF ECONOMIC POWER 

Dr. LuBiN. There isn't really a close correlation for the simple 
reason that during periods of high activity the demand for steel is 
caused not only by automobiles but by building construction, rail- 
roads, and other big users of steel. The production of automobiles 
has moved at a much faster rate, relatively, than the demand for the 
other products, so although the automobile industry is now becoming 
increasingly important as a factor in steel production, there was a 
long period when other industries played a tremendously important 
part as consumers of steel. If these other industries get back to the 

Exhibit No. 25 

ANNUAL PRODUCTION OF AUTOMOBILES 




1919 "20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 



SOURCC - BUREAU OF CENSUS INCLUDES 
RSSSENGER CARS AND COMMEROAL VEHiaES 



levels of previous years, the relative effect of automobiles will be even 
less than it is at the present time. 

You see the same thing, of course, in the case of bituminous coal. 

(The chart referred to was marked "Exhibit No. 26" and appears 
on p. 37. The statistical data on which this chart is based are 
included in the appendix on'p. 207.) 

Dr. LuBiN. In 1923 we produced 564,000,000 tons of coal. In 
1929, when industrial activity was far greater than in 1923, we pro- 
duced 30,000,000 tons less, in spite of the fact that industry was 
producing something like 20 percent more goods. Of course the 
answer is competition of other fuels, water power, oil, and things of 
that sort. In 1932 the production of bituminous coal fell to 310,000,- 
000, which is slightlv more than half of what it had been; in 1937 it 
was 440,000,000, and we estimate about 300,000,000 for 1938. 

The significant thing is that physical production has been going up 
during the period from 1933 to 1937, but the increase in coal produc- 
tion has not moved at anywhere near that same rate. 



CONCENTRATION OF ECONOMIC POWER 



37 



One other factor should be mentioned; the efficiency of coal utiliza- 
tion has gone up tremendously. It takes a lot less coal to do a given 
amount of work than it formerly did. 



Exhibit No. 26 



ANNUAL PRODUCTION OF BITUMINOUS COAL 



600 




500- 


- 


400 




- 


300 




- 


200 




- 


JOO 

oL -■-■. 


lilHIiilli 





- 100 



1919 '20 '21 "22 '23 '24 -25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 1937 '38 "39 '40. 



-BUREAU Of MiNES 



Here is the lumber industry, which has also shown tremendous 
changes. 

(The chart referred to was marked "Exhibit No. 27" and appears 
on p. 38. The statistical data on which this chart is based are 
included in the appendix on p. 208.) 

Dr. LuBiN. Forty-one billion feet of lumber were produced in 1925. 
Production fell to 10,000,000,000 feet, a drop of 75 percent, in 1932, 
and in 1937 we were not even back to the 1921 level. There is still 
a marked distance to go to get back to former levels, despite the fact 
that industry as a whole has made marked gains in the meantime. 
Of course, building is the big factor in lumber production. There is 
the other factor that substitutes for wood are being increasingly 
used, particularly in cartons, which have almost entirely displaced 
wood boxes. 

In contrast to the industries I have been showing you, which produce 
for the most part durable goods, look at the shoe industry, which 
produced far more shoes in 1936 and 1937 than were produced in 
1929. 

(The chart referred to was marked "Exhibit No. 28" and appears 
on p. 38. The statistical data on which this chart is based are 
included in the appendix on p. 208.) 



38 CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 27 

ANNUAL PRODUCTION OF LUMBER 




1919 '20 '21 '22 '23 '24 '25 '26 '27 '28 "29 "30 '31 "32 '33 '34 "35 "361937 "ZS "39 '40 



SOURCE -FEDERAL RESERVE BOARD AND BUREAU OF THE CENSUS 



Exhibit No. 28 

ANNUAL PRODUCTION OF SHOES 




1919 '20 '21 '22 '23 24 '25 ^ee '27 '28 '29 "30 -SI "32 "33 '34 '35 ^Se 1937 '38 "39 '40 



SOUMCE - BUREAU V THE CENSUS INCLUDES 
B0OTS.9CES.AN0 SLPPERS OnCR THIN RunCR 



COXCENTIJATIOX OF ECONOMIC POWER 39 

Dr. LuBiN. Here we have nondurable' consumer goods, something 
that wears out relatively fast, plus the fact that there has been, a 
very marked style change in the industry. If you want people to 
wear out shoes fast, change the style that women use frequently, and 
you automatically create a new demand. There has also been a 
tremendous change in the technique of shoemaking. 

Mr. Oliphant. Do you know of any durable goods that will follow 
that line? 

Senator King. There is less leather used in the manufacture of 
shoes than 10 years ago. 

Mr. Henderson. I think if youhad a refrigerator chart, that would 
be inclined to be comparable in consumer durable goods. 

Dr. LuBiN. Yes. It is a new product coming into the market. 

Senator Borah. What are the figures there on importations? 

Dr. LuBiN. This is 1936 and 1937. I don't know the exact figures 
but I know in 1937, when they were holding- hearings on the wage- 
and-hour bill, the question of shoe importations was raised, and I 
think that at that time we were importing about 1,000,000 pairs 
per year, while we were producing something in excess qf 400,000,000 
pairs in the United States. 

Senator King. And it has been reduced during the past year, on 
imports from Czechoslovakia, particularly. 

Dr. LuBiN. Here is the case of cotton, another nondurable goods., 
We consumed more cotton in the year 1937 in our factories than in 
any other year in our history, despite the fact that at the same time 
silk was going up and rayon was taking a tremendous jump here, and 
wool consumption also was expanding. 

(The chart referred to was marked "Exhibit N-o. 29" and appears 
on this page. The statistical data on which this chart is based 
are included in the appendix on p. 208.) 

■Exhibit No. 29 

TEXTILE FIBRE CONSUMPTION 
BY U. S. MANUFACTURERS I8TO-I937 „,„,^^3 




I9Z0 w i?>o 



124491— 39— pt. 1- 



40 CONCENTRATION OF ECONOMIC POWER 

Representative Sumners. May I ask you, please, have you any 
figures to show whether or not tluit increase of production in any of 
those years added to the carry-over, added to the surplus? 

Dr. LuBiN. There were surplus inventories in textiles, very defi- 
nitely, this past fall. 

Representative Sumners. I am afraid I didn't ask my question 
properly. Is there any way to show what percentage of those in- 
creases added to the surplus? Do you show whether there gets to be 
a momentum of production so that you run your surplus up beyond 
what your consumption is over a given period. 

Dr. LuBiN. I think very definitely that happened in cotton in 1937. 
We were not absorbing our production. I think it was also partly 
true in wool. 

Now, I would like to turn to one more consumer goods, namely, 
cigarettes. 

(The chart referred to was marked ''Exhibit No, 30" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 210.) 

. Exhibit No. 30 

ANNUAL PRODUCTION OF CIGARETTES 



MILLIONS Of POUNDS 




' 1919 '20 '21 '22 '23 '24 '25 '26 "27 "28 '29 "30 "31 "32 "^3 '34 "35 "36 "37 "38 "39 40 



SOURCE - BUREAU OF INTERNAL REVENUE 



Dr. LuBiN. Here you have an astounding situation. In 1929 we 
consumed 119,000,000 pounds of tobacco in making cigarettes. We 
consumed the same amount in 1930. Last year we used 163,000,000 
pounds. There was a slight drop in 3 years shown on tliis chart but 
other\^'ise cigarette consumption has followed a perfectly straight line. 
1 know of no more nondurable consumer goods than cigarettes. 

Finally, in contrast with what happened in the manufacturing in- 
dustries, we have this chart, with tremendous ups and downs, showing 
department-store sales. 



CONCENTRATION OF ECONOMIC POWER 



41 



(The chart referred to was marked "Exhibit No. 31" and appears 
•on this page. The statistical data on which this chart is based are 
included in the appendix on p. 210.) 

The Chairman. You are now refening to the chart on department- 
rstore sales? 

Dr. LuBiN. Yes. You will note that we have never gotten back to 
the levels of 1926, 1927, and 1928 in our department-store sales. As 
a matter of fact, at the present time we are doing about 16 percent 
less in terms of volume of sales, based on dollar volume, than the 
1923-25 average. However, that does not mean we are selUng that 
much less goods, because there has -been a change in the retail price 
level. 

Senator King. Where do you draw the line between department 
stores and semidepartment stores, if I may use that expression, or 
•other stores selling the same articles? 

Exhibit No. 31 



DEPARTMENT STORE SALES 

F R. INDEX. BASED ON DOLUUt VOUfliE. I923-2»>K>0 



200 








































1 


200 


180 








































1 










































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160 






















































































140 






















































































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— ADJUSTED FOR aE«»UL VMUnON 
















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WITHOUT seAKMAL ADJU»Tl«eilT 












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Dr. LuBiN. The Board of Governors of the Federal Reserve System 
lias a list of representative department stores in cities throughout the 
•country, and this chart is made from their reports. 

Senator King. Would that include chain stores? 

Dr. LuBiN. No, nor mail order. It would not include Sears. 

The Chairman. As I understand it, that chart was prepared by the 
federal Reserve System and it is rather a typical chart than an attempt 
to survey the entire merchandising structure. 

Representative Reece. I didn't hear all the questions. This may 
have been asked by one of the other members. Does the chart 
include sales by 5-and-lO-cent stores and drug stores, the activities 
•of which appear to have been widened very greatly in the last few 
years? 

Dr. LuBiN. No, it does not. There are statistics available, not 
going back very far, showing chain-store sales and also showing mail 
order sales. These are only department stores in selected cities in the 
country which have been reporting over a period of years to the 
Federal Reserve System. 



42 



CONCENTRATION OF ECONOMIC POWER 



Kepresentative Reece. The sales of these stores have a very im- 
portant relationship, however, to the total sales. 

Dr. LuBiN. You have here an industry sharply affected by durable- 
goods production. 

(The chart referred to was marked "Exhibit No. 32" and appears 
on this page. The statistical data on wliich this chart is based ara 
included in the appendix on p. 211.) 

Exhibit No. 32 

INDEX OF FREIGHT-CAR LOADINGS 




1919 '20 "21 '22 23 "24 '25 '26 "27 "28 29 '30 "31 "32 "33 "34 "35 '36 "37 '38 "39 '40 

sauna - board of covcrnors of federal reserve soaro 

Dr. LuBiN. The bulk of transportation on rails is heavy stuff. Of 
course, the percentage going over rails has been getting less and less, 
but the effect of the importance of the durable goods industry upon 
the railroads is shown here very definitely, where the drop is almost 
proportionate to the drop in the heavy goods industries, with the rise 
following pretty closely the rise in the heavy goods industry. WHiether 
or not we ever get back to the point where we will be carrying as much 
freight in terms of carloads as we were before 1929, due to the road 
situation of this country and the trucks, of course, is a question. 

The Chairman. If it is convenient to you. Dr. Lubin, we will take 
a recess at this time until 2 o'clock. 

(Whereupon, at 12 o'clock noon, a recess was taken until 2 p. m. of 
the same day.) 

AFTERNOON SESSION 

The committee reconvened at 2 p. m. in the Caucus Room, Senate 
Office Building, on the expiration of the recess. 



CONCENTRATION OF ECONOMIC POWER 43 

TESTIMONY OF ISADOR LUBIN, COMMISSIONER OF LABOR 
STATISTICS, DEPARTMENT OF LABOR, WASHINGTON, D. C— 
Resumed 

The Chairman. The meeting will please come to order. We are 
ready to begin, Dr. Lubin. 

Dr. Lubin. Mr. Chairman, if I may sum up this morning's discus- 
sion, I would like to emphasize the fact that my purpose thus far has 
been to show what the loss has been to the American people as a result 
of the failure of our economic system to function smoothly. As I 
pointed out, the total cumulative loss in national income over the 
period of 9 years adjusted to a fixed price level, was $133,000,000,000. 
I would like to point out further that if you make no allowance for 
the change in price level that figure becomes $225,000,000,000. In 
other words, if you took the total losses for each year and added them 
together, and did not adjust them for changes in price level, you would 
get the latter figure. 

The Chairman. What was that sum, without the adjustment? 

Dr. Lubin. It was $225,000,000,000. 

I attempted to point further to the segments of the economy that 
failed to function, and attempted to point out further how the loss 
was divided among the wage and salaried workers of the country, the 
farmers and the mvestors. I pohited out further that in' the manu- 
facturing industries the great losses occurred m the durable goods 
industries, namely, those that produce the commodities that are 
slowly consumed as for example, machinery, plant equipment, re- 
frigerators, automobiles, and thmgs of that sort. 

EMPLOYMENT AND PAY ROLLS IN DEPRESSION 

Dr. Lubin. The effect of these shifts in the economy is shown in 
this chart, called "Nonagricultural employment in the United States." 

(The chart referred to was marked "Exhibit No. 33" and appears 
on p. 44. The statistical data on which this chart is based are included 
in the appendix on p. 211.) 

Dr. Lubin. This chart depicts the number of people employed in 
the manufactui-iug, minhig, construction, transportation, and public- 
utility industries. You will note that there was a decline m employ- 
ment up to 1933. Then an upturn took place, followed by a fall, so 
that by 1938 we have 12,802,000 people employed in manufacturing, 
mining, construction, etc., as compared with nearly 17,000,000 in 
these hidustries in 1929. 

On the other hand the number of people employed in trade, finance, 
services, and the government, was almost the same in 1929 as it is 
today. The actual figure in September, 1929 was about 13,000,000, 
and the figure today is about 12,500,000. 

The number of proprietors^ self-employed and casual workers, 
actually increased as compared with 1929. 

The Chairman. May I ask, before you leave that, whether you 
have made any break-down of the middle group, namely trade, finance, 
and government? The question I have in mind is whether or 
not there has been a large increase in the numbers employed by 
government. 



44 



COiN 



TRATION OF ECONOMIC POWER 



Dr; LuBiN. We havc he actual figures of the numbers employed. 
There has been a perceptible increase in the number employed by 
governnient, but the increase in government employment as com- 
pared with the total rise of all employment has been relatively small. 
We have the exact figures.* 

Senator King. Isn't it a fact that there are more than 2,000,000 
permanent employees on the Government pay rolls today, to say 
nothing of the enormous number in W. P. A. and the other organiza- 
tions, so that the increase in the number of persons on the Government 
pay roil or paid out of the Public Treasury is very much greater than 
it was in 1929 or any preceding period? 

Exhibit No. 3? 



NON-AGRICULTURAL EMPLOYMENT 



IN THE UNITED STATES 




/92S /$30 /S3/ 1932 1333 1934 /SSJ /S36 1937 /933 1939 



Dr. LuBiN. These figures do not include W. P. A. or C. C. C. They 
include regular Government employees on the regular pay rolls of the 



See the following table: 



Gorernmenl employment {included in total nonagricultural employment estimate) 
[In thousands] 





Septem- 
ber 1929 


March 
1933 


Septem- 
ber 1937 


July 
1938 


October 
1938 


Regular government service ' 


2,558 
783 


2,530 
533 


2,890 
705 


2,925 
670 


2,913 


Oovernment construction ' ' 


735 






Total 


3,341 


3,063 


3,585 


3,595 


3,648 



' Federal, State and local, including education. 
Source: Bureau of Labor Statistics. 



' Including P. W. A 



CONCENTRATION OF ECONOMIC POWER 



45 



Government, and city governments, State governments, county, 
municipal, and others. They do not include those on relief projects. 

Mr. Arnold. Your point is that it takes the same number of 
people to get that particular job done. 

Representative Reece. What does "casual workers" mean? 

Dr. LuBiN. Longshoremen, domestic servants, and so forth, people 
who do not have steady employment in the sense that they work 
month after month in the same industry. 

The Chairman. How about the construction industry? A good 
deal of that work is casual. 

Dr. LuBiN. Some of that is included here. 

(The chart referred to was marked "Exhibit No. 34" and appears on 
this page. The statistical data on which this chart is based are 
included in the appendix on p. 213.) 

Exhibit No. 34 



EMPLOYMENT 5 PAY ROLLS 
ALL MANUFACTURING INDUSTRIES 

J«,i«r NuMiers 1923-25=100 MfrVumtm 


120 
100 
80 
60 
40 
20 


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80 
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im isx isii V22 im is;4 1925 me m7mB ^29 ffss mi 1932 1911 m< ms me 1337 im 1339 /340 





Dr. LuBiN. I want to deal, next, with what has happened to employ- 
ment in the manufacturing industries during recent years. For the 
sake of comparison we have taken the average of 3 years, 1923, 1924, and 
1925, as our base. I should like to point out that despite the fact that 
our index of physical production rose very perceptibly, by 25 percent, 
during the decade of the twenties, the total number of people employed 
in the manufacturing industries hardly rose at all. As a matter of 
fact, with the exception of a short period in 1929, the manufacturing 
industries of the country employed just about the same number 
throughout the decade, although for a short period they reached a 
point where they were employing 10 percent more workers than 
thev did in the base years. 



46 



CONCENTRATION OF ECONOMIC POWER 



(The cliart referred to was marked "Exhibit No. 35" and appears 
on this page. The statistical data on- which this chart is based are 
inchided in the appendix on p. 214.) 

The Chairman.. In otlier words, there was a constantly decreasing 
number of persons necessary to produce a constant output. 

Dr. LuBiN. Exactly. 

Senator King. That constant output, and any improvement in it 
was the result in part of new technology. 

Dr. LuBiN. New technology, new methods of doing tilings. 

Senator King. Greater use of machinery. 

Dr. LuBiN. And changes in management procedure; not neces- 
sarily putting in new machines, but reorganizing the flow of goods 
and processes and things of that sort. 

Senator King. Better distribution. 

Exhibit No. 35 



EMPLOYMENT AND PAY ROLLS 
DURABLE GOODS 

1923-25 = 100 







































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/92J 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 J935 1936 1937 1938 1939 1940 



The Chairman. In other words, what you are demonstrating is 
that both the capacity to produce and efficiency of production have 
been increased. 

Dr. LuBiN. Exactly. 

Now, the question arises how to account for the employment situa- 
tion during this period of time when production was going up, em- 
ployment in the manufacturing industries remained more or less 
stable, at the same time that we were adding to our labor supply — 
we W'ere adding the net of something like 600,000 people every year. 

Senator King. In part, women? 

Dr. LuBiN. Proportionately about the same number of women as 
in the previous decade. These figures show the net growth in the 
number of people of working age who normally go to work after they 
roach a certain age. 

The Ch.virman. How many per year? 

Dr. LuBiN. Approximately 600,000. 

Tlie Chairman. Tliat is a net increase? 



CONCENTRATION OF ECONOMIC POWER 47 

Dr. LuBiN. Net increase. These new workers went into garages, 
beauty parlors, hotels, laundries, dyeing and cleaning establishments, 
and other service trades. We developed a series of services which 
added to our standard of living during that period and furnished the 
labor supply for them through the workers that were entering the 
labor market each year. 

Senator King. Isn't it contended that there were about 18 new 
industries developed during the past few years which have absorbed 
several million employees? 

Dr. LuBiN. I would say over the last decade and a half, yes. 

The Chairman. Has the expansion of the service group of activities 
absorbed this increased available labor population? 

Dr. LuBiN. It did at a pretty good rate up until 1929. vSince 1929 
it has not been doing so. 

If I may point for a moment ^ to what happened to the employ- 
ment situation after 1929, so we may follow it through, it reached a 
peak of 110 in 1929. It fell to 61 at the bottom of tlie depression in 
1932. In other words, for every 110 people who had jobs in factories 
in 1929, only 61 had jobs at the bottom of the depression. By 1937 
most of those workers were absorbed. Last year we were employing 
in our factories almost as many people as we employed at the peak 
of 1929. In other words, the manufacturing industries of the country 
had returned to the point where they were doing as well in terms of 
employment as they had been doing in 1929. Pay rolls, on the other 
hand, which had reached a point in 1929 where they were 14 percent 
above the average period, 1923-25, fell to 38 percent of 1923-2.5 in 
1932. Our factories were paying out 38 cents each week for every 
dollar that they were paying out in the early part of the decade. As 
far as the wage earners were concerned, they wci'e getting, in actual 
pay rolls each week, approximately 62 percent less th.'iu they had 
been getting in the 1923-25 period. 

The Ch.\irman. In other words, the compensation of industrial 
workers, factory workers, dropped to a much greater extent than the 
number of persons employed. 

Dr. LuBiN. Yes. That, of course, was due in part to wage slashe-s, 
but also to irregular employment. Many workers had a job only 
1 or 2 days a week where formerly they worked 6. 

The Chairman. Apparently from that chart the compensation 
remained far below the employment level for several years. 

Dr. LuBiN. Yes; very definitely. As a matter of fact, it remained 
below it until early in 1937. 

Senator King. You are speaking of the aggregate number of em- 
ployees, rather than the compensation per unit? 

Dr; LuBiN. Yes. As I have said, factory employment did return 
to the 1929 level. Pay rolls also rose to just about where they had 
been in 1929. Last October they both dropped. Today we are 
back to where we are employing 86 people for every 100 we formerly 
employed (1923-25), and we are paying out 70 cents to 

Representative Reece. (interposing) Doesyour employment curve 
include only those regularly employed, or does it also include those 
intermittently employed, 1, 2, or 3 days a week? 

Dr. LuBiN. If they are on the pay roll at all, they are included. 

1 Referring to exhibit No. 34, supra, p. ifi. 



48 CONCENTRATION OF ECONOMIC POWER 

Representative Reece. Does your pay-roll line show the hourly 
or daily wage, or the total sum paid for labor? 

Dr. LuBiN. This shows the total sum paid out each month for 
labor, all of the dollars paid out by all the factory employers. 

Representative Reece. The two curves, then, paint a slightly differ- 
ent picture, do they not under those circumstances? 

Dr. LuBiN. What the curve attempts to show is that the number of 
people who actually had jobs — some people may have had only 2 or 
3 days of work a week — fell to the point where we were employing only 
61 people for every 110 form.erly employed whereas the amount that 
was paid out to those people who were working was decreased to the 
point where for every $1.14 that had been paid out in wages, only 38 
cents was being paid out. 

Representative Reece. I understand, but still I am wondering if 
your pay-roll line bears the proper relationship to the employment line, 
since the employment line includes those intermittently employed, 
employed on a part-time basis, whereas your pay-roll Une includes the 
total wages paid, and therefore would have a tendency to indicate that 
probably the daily wage was less than it actually was. 

Dr. LuBiN. As I attempted to make clear, Congressman Reece, the 
reason why pay rolls were so much lower than employment is partly 
due to a cut in wage rate. But the inajor reason was the fact that the 
people who were working were working part time, whereas earlier 
they were worldng full time, so that at the end of the'week the amount 
they earned was considerably less than would have been true had they 
had fuller employment. 

Senator King. May I interrupt you? I have before me Kiiznet's 
tables, upon wdiich you have largely based your calculations. Lfind 
that in 1919 the entire wages and salaries paid was approximately 
$38,821,000,000 and in 1935 it is $38,755,000,000, and this table shows 
the payments in dollars during each of the succeeding years between 
1919 and 1935, and along in the twenties, sometime, it was less than 
the amount paid in wages in 1935. 

Dr. LuBiN. That included all wages and salaries, sir. These figures 
include only factory workers. Tliis chart refers only to manufacturing 
industries. 

Senator King. Take employees' compensation; the amount is 
$41,631,000,000. 

Dr. LuBiN. That is the total paid out in a year. 

Senator King. And the total income for the year — have you those 
figures here? 

Dr. LuBiN. Yes. Did you say 1935? 

Senator King. So that $41,631,000,000 was paid in wages and 
salaries out of fifty-five billion. 

Dr. LuBiN. I don't know what figures you are referring to when you 
say employees' compensation was forty-one billion ; the gross national 
income was fifty- three billion. 

Senator King. That is what I indicated, so that nearly 80 or 90 
percent of the entire national income was paid in wages. I am not a 
mathematician. 

Dr. Lubin. Sixty-six percent, approximately. 

Representative Sumners. Doctor, have you anything, if I may ask 
you, to indicate how much the development of labor saving devices is 
reflected in those relative volumes of production and wages? • 



CONCENTRATION OF ECONOMIC POWER 49 

Dr. LuBiN. I would say they were a very significant factor. We 
do have materials available dealing with specific industries. Some 
industries progressed at a very fast rate. Other industries on the 
other hand changed very little in their output per man-hour. One 
can't generalize. Labor-saving devices were an important influence 
on what happened to the output on railroads per man-hour, bitu- 
minous coal mining per man-hour, and anthracite mining per man-hour, 
and manufacturing 'per man-hour. 

For instance, in the textile industry over a period of 20 years a very 
marked increase in output per man took place. That didn't mean 
that every plant in the industry had increased its output. The 
plants that had modernized and put in more efficient equipment were 
the ones that accounted for the change. 

We had found that if you took a plant in the cotton-textile industry 
in 1906, which was equipped with the best machinery known in those 
days, and compared it with a plant in 1936, 30 years later, equipped 
with the best macliinery known in 1936, you could get almost 60 
percent more out of each worker per hour than you could 30 years 
previously, but that will vary from plant to plant. 

The tremendous drop in factory employment and pay rolls becomes 
particularly significant, if you break this line up into the two important 
groups of m.anufacturing industries, namely, the durable group and the 
nondurable group. That I shall do next (referring to exhibit No. 35 ^). 

You will note that employment fell to the point where 61 people 
were employed for every 100 that had been employed in 1923-25. 
If you take the durable-goods industry, yoti will find only 47 out of 
100 were employed in 1932, and pay rolls fell to the point where only 
26 cents was being paid out in the durable-goods industries as com- 
pared with 38 cents for all manufacturing. 

If ypu compare these figures with those for the nondurable-goods 
industries you will note that employment fell by approximately 28 
percent as compared to a drop in durable goods of 53 percent f re m the 
1923-25 level. You will note, also, that pay rolls in nondurable 
goods dropped to the point of just abt>ut half what they had been. 
Pay rolls in durable goods on the other hand fell to about a quarter 
of what they had been. Again emphasizing the part the durable- 
goods industries played in keeping the economic machine working. 

(The chart referred to was marked "Exhibit No. 36" and appears 
on p. 50. The statistical data on which this chart is based are 
included in the appendix on p. 216.) 

The Chairman. Don't you think it would be well to give a list of 
exactly what you call durable goods? You have mentioned three or 
four different types. You have mentioned automobiles, radios, and 
machinery. 

Dr. LuBiN. It includes all of the metals and materials that go into 
making machines, all transportation equipment, all housing; iron and 
steel and steel products like hardware, and so forth; lumber and allied 
products, including furniture; machinery, including agricultural, 
electrical, engines, foundries, and so forth; stone, clay, glass, brick, 
and tile; transportation equipment, including not only railroads, 
but also automobiles. 

And among the nondurable ypu have food, baking, slaughtering, 
leather, boots and shoes, paper, pulp, rubber products, textiles, 
tobacco, things of that sort. 

' Supra, p. 46. 



50 



CONCENTRATION OF ECONOMIC POWER 



The Chairman. In the nondurable group go all of the necessities 
of life, and in the durable group go practically all the luxuries? 

Dr. LuBiN. I won't agree that furniture and automobiles or electric 
refrigerators are luxuries, but in terms of past history, things which 
in the past have been considered luxuries and are now considered 
necessities, would fit that definition. 

The Chairman. I gave it as a question and not as a statement. 

Dr. LuniN. I want to point out one further fact. In May of 1937 
the durable goods industries were employing about the same number of 
people as in 1929 and their pay rolls were almost the same as in 1929. 

However, in the nondurable goods industries you will note that by 
August 1936, we were back to where we were at the peak of 1929 and 
that in August of 1937 we were above the 1929 level in the employ- 
ment of people that make so-called nondurable goods. 



Exhibit No. 36 



EMPLOYMENT AND PAY ROLLS 
NONDURABLE GOODS 



1923-25 = 100 











' 
















r 


1 ' 


f^ 


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^ 


X^ 


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1 PAY ROLUS^ 


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! 




1 
i 










i ! 


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1 1 






1 ^ i 1 1 ! : 



1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 :936 1937 1938 1939 1940 



However, we never got back to tlie point where we paid out as many 
dollars in pay rolls in these industries as we did in 1929, when the 
index was 114. At the peak of 1937 the index was lOo. This is a 
significant factor in the sense that it rellects something with regard 
to wage rates. The wage rates increased fastest in the durable goods 
industries in 1936 and 1937. 

The Chairman. The figures you have furnished us so far seem to 
demonstrate that, as I recall it, production in the nondurable indus- 
tries has maintained a fairl}^ constant level. Production in the durable 
industries has shown a very great decline. Now 3'ou are giving us 
this difference between the wages and the employment in the two 
industries. That appears to demonstrate that in the nondurable 
industries, wages are still fai- beloVr, or still below, not far below, 
employment, whereas in the durable goods group wages have been 
above employjucnt or at ](>ast j'aiily constant with it. Does that 
lead to the conclusion that to take up the slack of unemployment it is 
essentia] primarily to stimulate the durable goods industries? 

Dr. LuHiN. Definitely. 

Senator King. One question, if I may. Is it not a fact that in the 
nondurable goods, and for that matter in the durable goods, there are 



CONCENTRATION OF ECONOMIC POWER ^l 

some particular branches or industries where the wages fluctuate 
more than in others, so that while there might be, adding them all 
together, a reduction, say, of 10 percent, in some of the industries 
there would be no reduction at all? There would be fluctuations in 
various industries so you couldn't generalize with respect to all indus- 
tries and say that a certain extent of reduction or decrease in wages 
applied to all industries. 

Dr. LtJBiN. All one can say is, taking the group as a whole, the 
number of dollars paid out has fallen by a certain amount. The 
locomotive industry is a case in point. 

(The chart referred to was marked ''Exhibit No. 37" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 218.) 

Exhibit No. 37 



InOei 


EMPLOYMENT AND PAY ROLLS 
LOCOMOTIVES 

■i^mbe,^ 1923-25.100 lnde.Numb«, 


180 
160 
140 
120 
100 
80 
60 
40 


— I 




































180 
160 
140 
120 
100 
80 
60 
40 
20 










































































































































L. 




^ 






























n 


Li 




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Ok. 






















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PAY ROL 


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MPU 


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. ^ 


V 

























Nj-^S^v^y 


\ 






1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 





Dr. LuBiN. This chart shows that employment did not get back 
to what it was in 1929. Compare that with the chart for sawmills 
where employment rose to about two-thirds of what it had been. 

(The chart referred to was marked "Exhibit No. 38" and appears 
on p. 52. The statistical data on which this chart is based are in- 
cluded in the appendix on p. 218.) 

Dr. LuBiN. Then, there is cement, where employment never got 
abo\ne three-fourths of the 1923-25 average. In contrast, here is 
cotton goods, where employment was above the 1929 level for several 
months in 1934, and again' in 1936-37. 

(The charts referred to were marked "Exhibits Nos. 39 and 40" 
and appear on pp. 52 and 53. The statistical data on which these 
■charts are based are included in the appendix on pp. 219 and 220.) 

Dr. LuBiN. Here also are additional employm.ent and pay-roll charts 
for cigars and cigarettes, and woolen and worsted goods. 

(The charts referred to were m.arked "Exhibits Nos. 41 and 42" 
and appear on pp. 53 and 54. The statistical data on which these 
charts are based are included in the appendix on pp. 220 and 221.) 



62 



CONCENTRATION OF ECONOMIC POWER 



Exhibit No. 38 





EMPLOYMENT AND PAY ROLLS 
LUMBER-SAWMILLS 

Mumtxn 1923 25-100 irde. /* 




ISO 
100 
80 
60 
40 
20 






































40 
20 


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_!iJ_ 


1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 





Exhibit No. 39 





EMPLOYMENT AND PAY ROLLS 
CEMENT 

v,^«.s 1923-25- 100 "■«- A/^ 


vien 




120 
100 
80 
60 
40 
20 







































120 
100 
80 
60 






A 


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1923 1924 1925 1926 1927 S28 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 

eul>t»U OF L.BOR STiTISTlCS 





CONCENTRATION OF ECONOMIC POWER 



53 



Exhibit No. 40 



MtM 


EMPLOYMENT AND PAY ROLL? 
COTTON GOODS 

Numfrs 1923-25-100 //>«'« 


' I60 
140 
120 
100 
80 
60 
40 
20 



,40 
ISO 
100 

eo 

60 

40 

20 












































































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1 


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1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1931 1934 1935 1936 1937 1938 1939 1940 



Exhibit No. 41 





EMPLOYMENT AND PAY ROLLS 
CIGARS AND CIGARETTES 

Sumter, 1923-25-100 '«*'*' 


mders 


120 
100 
80 
60 
40 
20 






































120 
100 
80 
60 
40 
20 


H 


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OYMENT 


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1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 I940 

o^sni^M OF L.eoB smisTics 





54 



COXC'KXTIiA'JUON OF ECONOMIC POWER 



Dr. LuBiN. Here is "Woolen and worsteds" where, throughout the 
period from 1935 until the middle of 1937, em.ployment was as high 
or higher than it had been in 1929. 

Senator King. Isn't it true, however, that it isn't fair to compare 
locom.otives, and the diminution in their production with the other 
industries, because they belong to a very sick industry, our trans- 
portation industry? 

Dr. LuBiN. That is the thing I am trying to bring out, that the 
variations have a definite relationship to specific problems of the 
economy. The reason the cement figure did not go up is because 
we never got back to our previous building levels. As a matter of 
fact, in 1935 every other bag of cement in the United States was pur- 
chase either by .the Government or by a contractor engaged in Gov- 
ernment construction. 

Senator Borah. Did the price of cem.ent change significantly? 

Exhibit No. 42 





EMPLOYMENT AND PAY ROLLS 
WOOLEN AND WORSTED GOODS 

'Vumters 1923-25 = 100 «<*^/v 


mbtrs 


ISO 

too 

80 
60 
40 
20 






































,20 
KM 
80 
60 
40 
20 



^ 


1/ 


\ 


































V 


\ 


\J 


V 


¥ 


^ 


EM 


PLOY 


MENT 


-h 




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1923 1924 1925 1926 1927 1928 1929 1930-1931 1932 1933 1934 1935 1936 1937 ,938 ,939 ,940 

BURE«U OF L»BOH StjTlSTlCS 



Dr. LuBiN. Mr. Oliphant, 1 think, can tell you more about that. 

The Chairman. What is the answer to the Senator's question? 

Dr. LuBiN. It didn't change. 

The Chairman. Isn't it a fact that a very large proportion of the 
output of cement is now being used in the construction of roads? 

Dr. LuBiN. The Public Works Program and W. P. A. program are 
big consumers of cement even today. 

The Chairman. So that "Extiibit No. 39" * on cement should not be 
taken to indicate that construction has come back to the extent that 
the use of cement has come back? 

' Dr. LuBiN. We want to bear in mind that public construction, 
State, Federal, and municipal, has always been a relatively small 
portion of the total, but at the moment it is a very important one. 

The final contrast, Senator, is cigar and cigarette employment. 
(Referring to "Exhibit No. 41 ".2) 

I have already shown you what happened to cigarette production. 
Here is employment. It has never returned to its 1931 level, despite 

' Supra, p. 51. 
> Supra, p. 53. 



CONCENTRATION OF ECONOMIC POWER 



55 



the fact that output has been going up. Some of this is accounted 
for by cigars going from hand work to machine work. 

Mr. Henderson. You have, Dr. Lubin, the chart on production 
of cigarettes? 

Senator King. That is the most concentrated of all industries, 
isn't it? Nearly 99 percent of the production is in the hands of six 
or seven big producers. 

Dr. Lubin. Here is the production curve and here is employmr it 
and pay rolls. 

Mr. Arnold. Have prices dropped on cigarettes? 

Dr. Lubin. Retail prices have. • I don't know about wholesale 
prices. The two-for-a-quarter price went into effect some time ago 
and has stayed in effect in a good many parts of the country. 

Senator King. I might say the Government gets nearly $600,000,000 
in taxes out of the tobacco industry through the tax on cigarettes each 
year. 

Dr. Lubin. The pay-roll level has never gone back to where it 
was. Indeed it has kept consistently below past levels. 

Now, if we move from these specific industries back to the whole 
econom' --^nrr gain, we might look at these figures of employrnent 
wiis in terms of the amount of work that wage earners Have 
had, aiiu their hours of employment. 

(The chart referred to was marked "Exhibit No. 43" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 222.) 

Exhibit No. 43 



EMPLOYMENT AND AVERAGE WEEKLY HOURS 
IN MANUFACTURING, MINING AND STEAM RAILROADS 









1914 = 100 








INDEX INDEX 


120 




^ 


1 

AVERAGE NUMBER 
^OS WAGE EARNERS 




120 


>^ 


■****~*~*~^ 




/ 


100 


^fi 




\^ -•*^ 




/ 


100 


MEMGE W 


:ekly hours "^ 








80 










/ 








TOTAL MAN- 


HOURS A ^ 


^ 




60 








\ / 


60 












40 












40 



1914 



1919 



1924 



1929 



1934 



1938 



S euREAU OF LieOR STATISTICS 



124491— 39— pt, 1- 



56 CONCENTRATION OF ECONOMIC POWER 

Dr. LuBiN. It is rather significant that the number of wage earners 
in the United States in manufacturing, in mining, and steam railroads 
combined, increased between 1914 and 1919 by 26 percent. Then it 
fell during the post-war boom. It never returned to its former peak. 
Manufacturing, mining, and steam railroads combined never got 
back to the employment levels of 1920. The closest they approached 
it was m 1929. 

Senator King. That was because of the war and the post-war 
problem? 

Dr. LuBiN. Yes. Similarly the number of hours worked by all of 
their people put together has never returned to that peak level. The 
length of the average workweek has fallen by 26 percept during this 
period from 1914 to 1937. 

Senator King. From 56 hours down, as a maximum? 

Dr. LuBiN. This shortening of hours work per week isn't accounted 
for entirely by the fact that people voluntarily agreed to a cut in 
hours. The amount of work available was such that in some weeks 
there were only 36 hours of work available; in other weeks 32, and in 
other weeks 40. You wiU notice that between 1934 and 1937 there 
was an increase in the hours worked per week due to the fact that 
there was more work to be done, with the result that the men worked 
longer hours. 

The next chart translates the hours worked and average hourly 
earnings into weekly earnings. 

(The chart referred to was marked "Exhibit No. 44" and appears 
on p. 57. The statistical data on which this chart is based are in- 
cluded in the appendix on p. 222.) 

Senator King. Doubtless your reports show the fact that the oil 
industry fluctuates. A field will be worked out, like the Signal Peak. 
There will be a great boom and when the reservoir has been drained 
dry, they cease to operate, and many will be destroyed, and the work- 
ers will go to other fields which raay open up, and efforts wiU be made 
to revive the industry by securing greater production in Texas or 
elsewhere. So you would expect to find, in view of the uncertainty in 
oil production, the diminution and finally the drying up of the reser- 
voirs, that there would be great fluctuation, not only in production 
but wages and number of hours worked. 

Dr. LuBiN. That is true of all industries dealing with a waning 
resoui'ce. The same is true of lumber and mining. In mining the 
best ore gets worked out first. You know that only too well. Senator. 

The first thing I want to point out on "Exhibit No. 44" is that at the 
low point of the depression the people in our factories were averaging 
about 38 hours of work a week; today they are averaging 37 hours a 
week. They averaged 41a year ago last spring when industry was 
moving at a fast rate. This means that the decrease in hours was 
primarily affected by the amount of work available, because, when 
there was work available last year they worked as much as 41 hours 
a week on the average in the manufacturing industries as a whole. 
Many of these industries were paying time and one-half for overtime 
over 40 hours, whereas in the earlier days they weren't doing that. 
The change in the number of hours worked, plus the increase in the 
wage rate from less than 50 cents an hour on the average in 1932 to 
67 cents on the average last year, at the high point of production — it 
has fallen to 63 cents since — affected the weekly income of our wage 



CONCENTRATION OF ECONOMIC POWER 



57 



earners to the extent that whereas they had fallen to $15.70 a week 
during the depression, they rose to approximately $26 at the peak of 
last year, and are now to $23.32. 

Senator King. Where do you draw the line between wage earners, 
entrepreneurs, representatives, directors who are taking part in the 
activities of the day's work? 

Dr. LuBiN. We have to leave that up to the employer himself. 
We ask the employers to give us the number of people actually on 
their pay roll as wage earners, and omit certain types of supervisory 
forces. We have to trust their judgment as to whom they think is a 
wage earner or supervisory ofl5cial. 

Exhibit No. 44 



ALL MANUFACTURING INDUSTRIES 

AVERAGE WEEKLY EARNINGS 





! 


- 1 i 


to 


^4^-f- 


^Hi^ 




1 ' 


! 1 



AVERAGE HOURS WORKED PER WEEK 



1 1 1 1 i 




*i>^ 




1 


^.. 








J 




i 




1 






1 




1 





ao 




AVERAGE HOURLY EARNINGS 




%■ 


1 








1 














^- 














JT^ 






"s: 




-^ 




' 


1 1 


<0 




^ 








! 


w 






1 














1 















































1931 



1934 193! 



Senator King. Have your investigations demonstrated that that 
classification has been generally fair? 

Dr. LuBiN. Yes. Every now and then we try to get extra data on 
salaried workers. 

Senator King. You don't include salaried workers in the figures 
you have just been giving? 

Dr. LuBiN. These are wage earners only. 

How has it become possible to pay the higher wage rates per hour? 
The answer is revealed in what has happened to the amount of goods 
people turn out in industry. 



58 CONCENTRATION OP ECONOMIC POWER 

(The chart referred to was marked "Exhibit No. 45" and appears 
on this page. The statistical data on which this chart is based are in- 
cluded in the appendix on p. 223.) 

Dr. LuBiN. You will notice on exhibit No. 45 that in manufactur- 
ing as a whole the output per man has increased from 60 to 140, 
which is an increase of 130 percent between the years 1909 and 1936. 
In 27 years the output per man had more than doubled. It had in- 
creased 130 percent. In 1937 it was down a bit to 137, but still 
much greater than it was during the earlier periods. 

_ In bituminous coal, output increased from 67 to 122. In anthra- 
cite it increased from 85 to 158. I want to qualify these figures. 
One reason why these men are turning out more per hour than they 

Exhibit No. 45 



OUTPUT PER MAN-HOUR 



INDEX 




1909 
1914 
1923 
1929 
1932 
1936 
1937 



1909 
1914 
1923 
1929 
1932 
1936 
1937 



1909 
1914 
1923 
1929 
1932 
1936 
1937 



1914 
1923 
1929 
1932 
1936 
1937 



1923 25 '100 

MANUFACTURING 
40 60 80 100 



BITUMINOUS-COAL MINING 



ANTHRACITE MINING 



STEAM RAILROADS 



I) S BUREAU OF LABOR STATISTICS 



did in former years is because more and more of the poorer mines 
have been shut down and, particularly in anthracite, the only ones 
operating to any large extent are the best rhines. Output is being 
concentrated in the better mines, and the output per man auto- 
matically goes up. That is true in part of bitummous coal. 

Senator King. Before you leave that, isn't the fact of the greater 
production in part due to the new methods of mining coal? They 
have the cutthig machines, and the loading machines, so that , whereas 
a few years^ ago the work was done largely by hand, or a great deal of 
it, now it is done largely by machinery. 

Dr. LuBiN. Particularly in bituminous coal. In the anthracite 
you have the situation where the poorer collieries have been shut 



CONCENTRATION OP ECONOMIC POWER 59 

down and they have only operated the better mines. Of course, 
they also use more efficient methods. Each man is actually turning 
out more things per hour than he did formerly. 

Similarly on railroads 

Representative Sumners (interposing). May I ask one question? 
The figures of 1936 and 1937 indicate production per man. Does 
tliat chart have figured into those relative lines any change in the 
number of hours of work a day? 

Dr. LuBiN. This is per man-hour. 

On railroads, output increased from 75 in 1914 to 143 in 1937, 
which is an increase of slightly more than 90 percent. There, 01 
course, you have the same proposition — longer freight trains, 
heavier engines, more efficient engines, and things of that sort. 

Senator King. Better tracks. 

Dr. LuBiN. And everything else that goes with it. 

Senator King. Isn't it in part due to a number of consolidations 
which have made for economies, getting rid of railroads that were 
inefficient and didn't serve any useful purpose, indeed were a liability 
rather than an asset to the general public. 

Dr. LuBiN. The actual amount of abandoned lines has been rather 
large, but in terms of the amount left over, I don't know how large 
it would be proportionately. 

If you look at the figures showing what the wage earners of this 
country received in these industries, that is, manufacturing, mining, 
and railroads, you will find that in 1914 the average weekly wage 
was $11.60; that it jumped to $25.65 in 1929, and fell to a little less 
than $24 in 1937. 

(The chart referred to was marked "Exhibit No. 46" and appears 
on p. 60. The statistical data on which this chart is based are 
included in the appendix on p. 223.) 

Senator King. You are speaking only of manufacturing? 

Dr. LuBiN. Manufacturing, mining, and steam railroads, combined. 
This appears to be a great increase — from $12 in 1914 to more than 
$25 in 1929. However, if you consider what these doUars will buy — 
the actual increase in terms of what the workers received for their 
dollars — ^you will note that although wages jumped from $12 to about 
$25, the exact figure being $25.65 in 1929, prices went up so much 
faster that in terms of the goods they could buy their income per 
week in 1929 was only $15 as compared with $11.60 in 1914. 

The Chairman. Does this chart represent weekly wages? 

Dr. LuBiN. These are real weekly wages. In other words, wages 
did go up faster than prices, but not very much faster, because as I 
have said in terms of the goods they could .buy, wages were worth 
only $15 as compared to the $11.60 they formerly .were getting. la 
terms of dollars, their checks read $25.65. 

The Chairman. Do I read this chart on real wages correctly? It 
seems to indicate that in 1914 the average cash wages, weekly, re- 
ceived in all manufacturing, mining, and steam railroads, amounted 
to less than $12, and that that went up until in 1919 it reached $22 
a week, and in 1929, $25 a week, but that the real wages during this 
same period increased from $11 per week to $15 in 1929? 

Dr. LuBiN. And is now $16.46 in real wages as compared with less 
than $24 in nominal wages. These $24 will buy about $16.46 worth 
of goods as compared to what $11 would have bought in 1914. 



60 



CONCENTRATION OF ECONOMIC POWER 



Senator BoRah. In other words, the power, however it is exercised, 
bought that much? 

Dr. LuBiN. They received the difference between $15 and $25.65. 
Of course, the folks who made these goods had to pay higher prices 
for the things they bought, too. 

Senator Borah. They very likely did. 

Exhibit No. 46 

REAL WAGES 

IN MANUFACTURING, MININC&STEAM RAILROADS 



26 



22 





J^ 


y^ 


\ ' 






xT^WEEKLY 


:ash wages 


\ 


/ 






\ 




1 


/ 










1 i 


/ 










V 


/ 






^ 


^ 


V 


/ 




.^^'^ 


\ ^ 




^'^WEEKLY RE 


AL WAGES 


V 


f 

















24 



22 



20 



1934 



1939 



J S BUREAU Of LABOR STATISTICS 



Senator King. Dr. Lubin, have you compared the prices of a con- 
siderable number of commodities that the ordinary household buys 
now with the prices for a number of years back, on the base hne which 
you have taken? 



CONCENTRATION OF ECONOMIC POWER 



61 



Dr. LuBiN. Yes. This is based upon the actual cost of living. We 
take what a dollar will buy in terms of food, clothing, health, recrea- 
tion, education, and things of that sort, today, as comparedwith 1914. 

Senator King. Would not that statement mean that commodities 
now were two or three or four times as high in price as they were in 
1909? 

Dr. LuBiN. It means that what $12 would buy in 1914 would cost 
$16.50 today. 

Mr. Arnold. No, no. 

Dr. LuBiN. The difference between weekly cash wages and weekly 
real wages represents price increases. To put it in another way, 
$1.44 is required today to buy what $1.00 would buy in 1914. 

Mr. Henderson. Point out the significance, however, that for, the 
person who does have a weekly wage now, the real wages are higher 
than they have been in any period. 

Dr. LuBiN. Yes, he can get more with his weekly wages now than 
he could before. The actual increase in the cost of living has been 
44.8 percent. _ ^ 

Senator King. I wish you could furnish, if you do have them in 
the office, a number of articles ; take the various forms of textile and 
cotton goods and shoes and clothing and articles and commodities 
til at enter into our daily Hves and give the prices for a number of 
years back. 

Dr. LuBiN. We will break it down in terms of clothing, food, rents, 
and things of that sort. 

(The tabulation referred to was marked "Exhibit No. 47" and 
appears on this page.) 

Exhibit No. 47 

Esiimated annual average -indexes of cost of goods purchased by wage earners and 
lower-salaried workers in 32 large cities combined, 1913 through 1937 

[Average 1923-25=100] 



Year 


All items 


Food 


Clothing 


Rent 


Fuel and 
light 


House- 
furnish- 
ing goods 


Miscel- 
laneous 


1913 


57.4 
58.2 
58.8 
63.2 
74.4 
87.2 
101.1 
11G.2 
103.6 
97.2 
99.0 
99.2 
101.8 
102.6 
100.6 
99.5 

97^0 

n.% 

75.8 
78.6 
80.7 
81.6 
84.3 


63.1 
64.6 
63.9 
71.7 
92.4 
106.2 
120.2 
133.1 
101.6 
95.0 
97.9 
97.0 
105.0 
108.5 
104.5 
103.3 
104.7 
99.6 
82.0 
68.3 
66.4 
74.1 
80.5 
82.1 
85.1 


55.7 
56.1 
57.4 
62.9 
75.6 
102.6 
135.7 
161.6 
124.4 
101.0 
101.2 
100.4 
98.4 
97.0 
95.1 
93.7 
92.7 
90.7 
82.7 
73.2 
70.9 
77.5 
77.9 
78.7 
82.4 


61.4 
61.4 
61.9 
62.6 
02.1 
63.2 

IS;1 

92.4 
95.1 
97.5 
101.0 
101.5 
100.5 
98.9 
96.5 
94.3 
91.7 
86.9 
78.0 
67.2 
62.9 
62.9 
64.2 
67.4 


53.9 
54.3 
64.5 
56.6 
63.0 
73.3 
79.4 
93.1 
99.3 
98.6 
100.3 
99.1 
100.6 
102.2 
100.6 
98.9 
98.2 
97.2 
95.1 
90.4 
87.4 
88.6 
87.6 
87.5 
86.6 


47.7 
49.0 
51.3 
67.2 
66.9 
85.9 
108.2 
132.8 
111.8 
94.8 
101.8 
100.1 
08.1 
95.9 
93.6 
91.3 
90.2 
87.9 
79.2 
68.9 
68.0 
74.9 
76.4 
77.8 
84.9 


50.1 


1914 


61.2 




62 8 


1916 


65.5 


1917 


64.2 


1918 


73.7 


1919 


86.3 


1920 


99.1 


1921 


102.8 


1922 


99.7 


1923 


99.3 


1924 


99.9 


.1925 


100.8 


1926 


101.1 


1927 


101.7 


1928 


102.3 


1929 


103.1 


1930 


103.5 


1931 


102.7 


1932.. 


100.2 


1933 . ... 


97.0 


1934 


96.7 


1935 


98.7 


1936 


66.6 


1937 


97.8 







52 CONCENTRATION OF ECONOMIC POWER 

Senator King, it seems to me in many commodities the prices now 
are as low or nearly as low as they were ye&Ts ago. 

Dr. LuBiN. There has been a considerable decline. The decline 
has been from 173 to 144. That is quite a decline, but if you wanted 
to get back to 1914, before the price rise in the war period occurred 
prices would have to drop by an additional 44 percent. 

The Chairman. Now, Dr. Lubin, to summarize what you have 
shown thus far, if I understand these charts correctly, you demon- 
strated that the average weekly earnings is up, that the average 
hourly rate of pay is up, but that the av^erage number of hours per 
week is slightly down. You have also shown that real wages and 
cash wages are also — well, real wages are up, cash wages are below 
what they were in 1929. And while you have been showing this 
you have also indicated that production is greatly off in all of the 
durable, or practically all of the durable industries, so that makes 
employment down while these rates have been going up. 

Dr. Lubin. Yes. And, to qualify that further, Mr. Senator, this 
$16.46 is the weekly earnings of the fellow who has the job, in real 
wages. Twenty-iour dollars are the weekly cash earnings of the man 
who has the job. The average does not include the unemployed. 

Representative Sumners. Dr. Lubin, will you have any figures to 
indicate, for instance, the relative price of agricultural commodities 
in this break-down? 

Dr. Lubin. Oh, yes; we can do that. 

Mr. Henderson. I hope we will have a whole hearing devoted to 
the subject of prices, Mr. Chairman and Judge Sumners. 
- Dr. Lubin. We can do that. The fact is, we do break them down 
into foods, clothing, etc., and in our wholesale prices we break foods 
down into processed and nonprocessed foods. 

Representative Sumners. In the agricultural break-down, of course, 
there will be not only the question of price but a restriction on the 
amount of production which is now being allowed the farmers of the 
country. _ ^ . ^ 

Dr. Lubin. The significant thing is that despite that restric- 
tion, if you take all agricultural products together, the sum total 
produced all together, hasn't come down much. The fact is, this year 
will probably show thp biggest output we ever have had in terms of 
physical units. Of course, in value our output is down. _ 

Representative Reece. In arriving at your real weight, do you 
give a commodity the same relative weight in the considerations which 
make up the real weight as it bears to the cost of living, that is, say 
50 percent of one's wages goes for rent and food. Is rent and food 
given a 50 percent relative importance in your real v eighto? 

Dr. Lubin. Yes. Rent gets a weight, food gets a weight, recreation 
gets a weight, church activities and educational activities get a 
weight. We rate everything in the terms of its importance. 

Mr. Henderson. Was it your opinion this morning as expressed 
that w^e have never produced too much cotton to satisfy our real 
needs? 

Dr. Lubin. The question was raised as to whether there was too 
much agricultural production or too little industrial production. I 
Baid that so far as I was concerned I couldn't conceive of too much 
of anything being produced so long as there was a portion of the 
population that wasn't gettine enough of those things. 



CONCENTRATION OF ECONOMIC POWER 63 

Representative Reece. This is beside the particular phase of the 
question which you are now discussing, but is it your intention to 
include in your discussion any figures to indicate the percentage of 
employment that is so occasioned by the large corporations compared 
to the smaller corporations? Take, for instance, the number of 
people employed by corporations who have a net income of less than 
a hundred thousand dollars, is that question going to be covered? 

Dr. LuBiN. Yes; it is not going to be covered in the introductory 
hearings, but that is coming into the picture definitely. 

Now, if you add these factors together and ask what they mean in 
terms of loss of national income, in terms of loss of employment, and 
so forth, you naturally come to the question as to what effect they 
have upon the people of this country, particularly in terms of the 
number of unemployed people. 

(The chart referred to was marked "Exhibit No. 48" and appears on 
p. 64. The statistical data on which this chart is based are included in 
the appendix on p. 224.) 

Dr. LuBiN. In this chart I have attempted to show the number of 
unemployed as revealed by the census of unemployment last Novem- 
ber. It not only shows the number of unemployed, but of ages that 
have been most hit by the falling off in production. I think it is 
rather significant that in this group of 15-19 

The Chairman (interposing). That is the age group 15-19? 

Dr. LuBiN. Yes; and males. There are in this group approxi- 
mately 1,100,000 people who are unemployed. 

In the 20-24 age group among the males, the number is slightly 
larger, 1,250,000: Then you have a Httle over 800,000 males between 
25-29, and you will notice the number in each 5-year age group 
remains just about the same between 30 and 54, and then the number 
becomes smaller as the age group goes up. You can expect it to be 
smaller because of the fact that there are fewer people in the older 
age groups in the population. 

Senator Borah. What about age 60? 

Dr. LuBiN. Between 55 and 64, 835,000 males and 194,000 females. 

Senator King. In that lower line, 15 and above, do you include the 
children who are working on the farm, or do you exclude those? 

Dr. LuBiN. Those are people who actually came and registered as 
unemployed when the census was taken. They include people in agri- 
cultural areas as well as industrial if they registered as unemployed. 

Senator King. Were there many registered as unemployed between 
15 and 16, say? 

Dr. LuBiN. A relatively small number in this total of 1,100,000 of 
males. 

Senator King. Is there any indication as to their habitat, whether 
they were in urban or suburban districts? 

Dr. LuBiN. We have data by States as well as counties. 

The Chairman. This chart is prepared from the statistics of the 
unemployment census? 

Dr. LuBiN. Yes. Now, that raises a question as to what this all 
has meant in terms of the part that Government plays in helping our 
people to maintain themselves. 

The Chairman. Before you go to that other chart, may I ask. Dr. 
Lubin, if it isn't a fact that there is a larger percentage of our people 
over 60 years of age now than at any time in our history? 



64 



CONCENTRATION OF ECONOMIC POWER 



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^* a 



CONCENTRATION OF ECONOMIC POWER 55 

Dr. LuBiN. Yes, and the number is going to keep increasing steadily 
for the next 20 years, so that by 1960 it is estimated they will con- 
stitute about one-seventh of the population. The estimate made 
by the Social Security Board shows that number is increasing definitely 
because of greater longevity. 

The Chairman. What is the fact with respect to the lower age 
group below 20? 

Dr. LuBiN. That number is getting gradually smaller because of 
the fact that the birth rate has been falling steadily and the number 
of people becoming 15 each year is smaller. 

The Chairman. So that the problem of finding employment for 
those, say, above 40 is constantly growing greater. 

Dr. LuBiN. In a sense, yes. On the other hand, with fewer and 
fewer people coming into the labor market to take their jobs away, 
you ease the pressure. In my personal opinion, the significant prob- 
lem lies among the young folks, between 15 and 25, who are going to 
be our future citizens. They are the folks whose morale we have to 
maintain. 

The Chairman. An effort is being made, of course, to provide edu- 
cation for those in the group under 20, and irrespective of any effort 
upon the part of Government, isn't it true that a much larger propor- 
tion of young people go to school today than did 10 years ago? 

Dr. LuBiN. Definitely so. If you had maintained the same rate that 
you had 20 years ago, there would be more unemploj-ed today. 

The Chairman. So that the real question of unemployment begins 
with the 20-year group rather than with the 15-year group. 

Dr. LuBiN. No. I would say it began at 16, because even though 
more of them are going to school than in the past, there are still 
plenty of them who need work. I might state it this way: The problem 
is not as bad as it would have been had the Government not made it 
possible for more young folks to stay in school. 

Senator King. Has your Department made any inquiry or any sur- 
vey as to the number of women, if an3% who liave taken the place of 
males, and to that extent have placed on the list of unemployed a 
larger number of males than otherwise would have been in that cate- 
gory? 

Dr. LuBiN. Such data as arc available from the census show that 
the rate of increase of women in industry during the past decade, up 
to 1930, v/as not much greater than in earlier decades. 

In other words, although more women were working, there were 
more women in the country to go to work. In proportion to the 
number of men in industry the increase wasn't any greater in recent 
decades. 

The fact is that the percentage of females at work in 1930, as shown 
by the census, was actually smaller than in 1910. In 1910 it was 
23.4 percent, in 1920 it was 21.1 percent, and in 1930 it was 22 percent. 
We won't know Avhat has happened in the last 6 or 7 years until we 
get our census for 1940. 

Senator King. There are new fields of employment — I will call it 
industry — open now to women which did not exist 10, 15, or 20 years 
ago. You mentioned this morning the beauty parlors, cosmetology, 
stenography and typing, and so ©n. 

Dr. LuBiN. On the other hand, we ought to bear in mind that 
during the war we had a host of opportunities for women which later 



gg CONCENTRATION OF ECONOMIC POWER 

disappeared. They were doing all kinds of work that women never 
did before. Some stayed on but others disappeared. We used to 
have women as streetcar conductors, and things of that sort. 

Senator King. Many women were actively employed in conducting 
railroad stations. 

Kepresentative Summers. Dr. Lubin, does the disposition or policy 
of employers of large groups of people to discharge employees after 
they get along about 45 or 50 years old have anything to do with 
those figures? I am afraid I am asking my question wrong. What 
I mean to ask is, Is there any increase in the disposition of employers 
to discharge their employees when they get along about 45 or 50? 

T>T. Lubin. We are right now in the midst of a study of that very 
problem. We have surveyed a group of industrial centers in New 
England and we have had the cooperation of employers in getting 
their employment records to see who is first fired during periods of 
lay-off, and who is hired first during periods of increasing employment. 

Some time between now and the end of these hearings we will have 
that study shaped up and we will know the facts on the basis of 
authoritative information. There is very little authoritative informa- 
tion available now. Incidentally, Senator King, you raised a question 
about these 15-year-old youngsters. There were about eight times 
as many at 19 years of age as there were at 15 in that group. 

Senator Kin^g. May I interrupt again, in view of the question of 
Judge Sumners. When the social security bill was under consider- 
ation, a number of employers of labor, as well as some of the employees, 
brought the attention of the Committee on Finance to the fact that 
they did not approve of, or rather they preferred to permit the man- 
ufacturing companies, the employers, to continue their policies under 
which they had large reserves, which were held by the leading insur- 
ance companies and other trustees, so that when persons got old, 
there was a pension or retirement privilege for them. Some of those 
who came before us represented that provisions were made so that 
they would get $156 a month under the pension plans that were set 
up by a large number of employers, and that they opposed the social 
security because they would only get for the same kind of work, $69 
to $75 a month. I was wondering if your organization had any data 
showing the number of employers who did have provision for 
retirement of their employees. 

Dr. Lubin. Yes, there has been a study made by the man who is 
now head of the Railroad Retirement Board for the Industrial Rela- 
tions Councilors who are industrial advisers. The only answer one 
can give to an employer when he says, "I am giving more than anyone 
else," is, "Keep on giving it. If you say it is going to cost too much, 
curtail your plan by an amount equal to what you are giving to the 
Government. But don't cut the total." 

Senator King. But when he refuses to do that, we stated if they 
continued their plan, they would have to continue to make their 
payment to the Government. 

Dr. Lubin. True, but with a difference in their payment, they 
could still continue. If they were paying $2 a week and they now are 
paying the Government a dollar a week, they could still continue 
paying that extra dollar. There is nothing to stop them from con- 
tinuing iti 



CONCENTRATION OF ECONOMIC POWER 67 

Senator King. The Government policy, as I recall (it has been a 
year or two since we had the matter before the Finance Committee) 
our plan was hostile to theirs, and they felt they could not assume 
both responsibilities. 

Dr. LuBiN. They could continue to assume part of it. Some firms 
did. 

COST OF DEPRESSION TO GOVERNMENT 

Dr. LuBiN. The question I should like to turn to now is: What has 
the failure of our system to work efficiently cost our Government? 

(The chart referred to was marked "Exhibit No. 49" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 224.) 

Exhibit No. 49 



ESTIMATED NET TOTAL NUMBER OF HOUSEHOLDS AND PERSONS 
RECEIVING RELIEE WORK PROGRAM EMPLOYMENT 

AND EMERGENCY EMPLOYMENT MILLIONS 

OF HOUSEHOLDS 

12 




Dr. LuBiN. This chart shows the number of households and persons 
who are receiving aid under the works program and emergency relief. 
You will note it is estimated that approximately 6,990,000 households 
are at the present time affected by either the works program, emer- 
gency program, or direct relief. That many families are getting 
some income in one or the other of these three categories at the present 
time. In terms of the number of persons affected, it is estimated 
that approximately 22,230,000 people are affected. 



6g CONCENTRATION OF ECONOMIC POWER 

The Chairman. What was that figure again? 

Dr. LuBiN. Twenty-two million two hundred and thirty thousand. 

Senator King. That includes those who would get social relief. 

Dr. LuBiN. These do not include widows, mothers, and unemploy- 
ment insurance recipients. Public assistance under the Social Security 
Act does come into this picture. 

The Chairman. May I interrupt? On tliis side of the chart are 
the figures, millions of households, but that applies only to the lower 
line. Is that correct? 

Dr. LuBiN. Exactly. 

The Chairman. And the figures on the other side refer to millions 
of persons, and they apply to the upper line? 

Dr. LuBiN. Yes. 

The Chairman. So that you are telling us that while there are 
about six and a half million of households directly affected by some 
phase of the emergency program, there are in excess of 22,000,000 
persons benefiting directly by that program. 

Dr. Lubin. That is right. 

The Chairman. May I ask what relation does that 22,000,000 of 
persons affected there have to the number of unemployed? When we 
speak 'of the number of unemployed, we are speaking of wage earners, 
chiefly. 

Dr. Lubin. That are looking for work. 

The Chairman. Available for work, and when we are speaking of 
the number of persons who are directly affected by relief to house- 
holds, we are referring not alone to the wage earners, but all the 
members of their families. 

Dr. Lubin. Yes, everybody in the family, including the baby. 

The Chairman. Of course, you are not referring to pensions which 
are paid to ex-soldiers. 

Dr. Lubin. No. 

Senator King. Going back for many, many years, and for other 
forms of relief that are given that do not fall under the term of 
"emergency relief?" 

Dr. Lubin. It doesn't include any of the private relief. 

The estimated cost of these programs is $5,638,000,000 for 1938. 
Incidentally, this figure includes all State, Federal, and local money 
that is used either for direct assistance, which is the upper line, or 
for the works program, or for public works which includes not only 
the ^. W. A. but also such public work as is undertaken directly by 
the Federal Government. 

The significant thing in this chart is that we reached our peak of 
public works in 1936. It came down in 1937 and it just about held 
its own in 1938. On the other hand, in terms of the work programs, 
we were spending in 1936 about two and two-thirds billion dollars, 
and in 1938 we were spending just about the same, whereas in 1937 
it was somewhat less. 

(The chart referred to was marked "Exhibit No. 50" and appears 
on p. 69. The statistical data on which this chart is based are 
included in the appendix on p. 225.) 

Dr. Lubin. The way that money has been spent for the most part 
is shown by this chart. 

(The chart referred to was marked "Exhibit No. 51" and appears 
on p. 70. The statistical data on which this chart is based are in- 
cluded in the appendix on p. 225.) 



CONCENTRATION OF ECONOMIC POWER QQ 

Dr. LuBiN. This chart ^ includes employment from, not only expendi- 
tures on emergency relief, P. W. A., W. P. A., but also all Federal 
expenditures such as the Army and Navy, civil employes, construction 
from regular Federal funds, C. W. A., C. C. C, and emergency relief. 
Back in 1934 we had the C. W. A. Its place was later taken in part 
by work relief. That was later changed into W. P. A. and other 
works programs. A very marked decline took place from the early 
part of 1936 to the fall of 1937 and in 1938 it increased again. The 
total number of persons estimated to be affected today is 4,946,000, 
which includes, of course, aU the activities financed in whole or in 
part by the Federal government. 

Exhibit No. 50 



ESTIMATED TOTAL FUNDS USED FOR RELIEF 
AND WORK PROGRAMS. BY MAJOR PROGRAMS 

(CALENDAR YEARS) 



BILLIONS 
OF DOLLARS 
6.0 



I 1 0//iecr Assamce 

^MWoRK Programs - 

^^PUBUC WORKS 



BILLIONS 
OF DOLLARS 
6.0 




"CtuOU rtoCRAL, 5TATC MO UOCAL 



WORKS Pft06AC&S 



Senator King. I imderstood you to say that the figures which you 
have given include appropriations or allotments made by the States 
and their political subdivisions. 

Dr. LuBiN. I did on the other chart.^ 

Senator King. Would that include the amount which has been 
appropriated, for instance, by New York City? They have a special 
tax there, as I recall, and a considerable sum which is used to supple- 
ment the appropriations of the State and made by the Federal Gov- 
ernment. 



' Referring to exhibit No. 51, p. 70. 
» See exhibit No. 



70 



CONCENTRATION OF ECONOMIC POWER 



Dr. LuBiN. Yes. 

Senator King. It includes that? 

Dr. LuBiN. Yes. 



Exhibit No. 51 



PERSONS EMPLOYED BY THE FEDERAL GOVERNMENT 
AND ON WORK PROGRAMS 




CONSTRUCTION FROM 



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imm 


Imilitary^^^^^^^^^^^^^^^B 



Senator King. So you have communicated directly or indirectly 
with the municipalities, counties and States and obtained from them 
all the expenditures they have made for relief purposes? 

Dr. LuBiN. These are Works Progress Administration figures. 

The ChaIRMan. Dr. Lubin, is there an apparent discrepancy be- 
tween the figures indicated on the lower line of the chart entitled 



CONCENTRATION OF ECONOMIC POWER 7J^ 

"Estimated Net Total Number of Households and Persons, etc.," * 
and that indicated in the chart entitled "Persons Employed by tha 
Federal Government and on Works Programs" ^ for the year 1938? 

Dr. LuBiN. Yes; there is a difference between those two. I 
think there are various reasons for it. This figure here, 4,946,000, 
gives the number of people employed in all activities, including mili- 
tary and the civil. They show the actual number of individuals. 
On the other hand, it is possible for one individual to help two or 
three households — he helps his father and mother as well as his wife 
and children. Moreover, one chart does not include direct relief, 
cash payments made by cities. States, and so forth, and the other does. 

The Chairman. This includes payments made by cities and States 
and direct cash relief by all agencies, and this covers actual employ- 
ment financed in whole or in part by the Federal Government.' 

Dr. LuBiN. Yes. 

Senator King. Would these figures include the amount which the 
chest obtains? 

Dr. LuBiN. No. 

Senator King. For instance, this city is seeking to mise oyer 
$2,000,000 for relief. Your figures would not include what it has 
raised. 

Dr. LuBiN. No. 

The Chairman. Dr. Lubin, might I ask you to have one of your 
assistants bring forward the chart that you used this morning on 
monthly income payments? * 

Representative Sxjmners. I would like to ask a question before we 
leave this chart. Dr. Lubin, you put a little explanatory statement 
there, 1934. Take these two charts together.^ In 1934 there were 
about 27,000,000 people being benefited, and moving over to this 
other line, at less than $4,000,000,000, whereas in 1938 there are about 
22,000,000 persons and the expense is almost $6,000,000,000. Would 
you put some explanation in? 

Dr. Lubin. According to the Works Progress Administration there 
are a number of reasons for the increase after 1934 in expenditure for 
relief and Work programs per person aided. 

For one thing, the comparison should be with the average number 
aided throughout 1934 rather than the peak figure of 27,000,000 which 
you have cited. After the CiS'il Works Administration was discon- 
tinued early in 1934, the number aided fell off substantially. 

Secondly, the relief problem was not being met on an adequate 
basis in the early years of the period, in terms of the number of needy 
families aided, or the amount of assistance they received. Direct relief 
was provided on a budgetary deficiency basis in 1934, while employees 
on the present works program are paid standard monthly wages for 
the work they perform. 

Many families are now receiving more adequate aid under the public 
assistance programs of the Social Security Board than they received 
under the direct relief program in 1934. 

Also these data include not only Federal expenditures but State and 
local expenditures as well, and the States and localities have greatly 

' Exhibit No. 49, supia, p. 67. 

> Exhibit No. 61, supra, p. 70. 

•Ibid. 

« Exhibit No. 14, Fupra. p. 21. 

» Exh bits Nos. 49 and 50, supra, pp. 67 and 69. 

124491— 39— pt. 1 6 



72 CONCENTRATION OF ECONOMIC POWER 

increased their participation in all the programs for assisting destitute 
workers. 

Senator King. The fact is they are paying some of them very much 
more than they did a short time ago on the ground they are experts 
or, well, various other reasons assigned or unassigned. 

The Chairman. Now, then, Doctor, if I may call your attention 
to this other chart,* I was impressed by your discussion of the chart 
entitled "Persons employed by the Federal Government and on 
Works programs,"^ and then it reminded me of this chart * which you 
discussed this morning, which shows in terms of the entire monthly 
income payments the proportion which Government expenditures for 
income payments under relief and otherwise bears to the total amount 
of income payments. Do you think it would be a reasonable thing 
to say, upon the basis of these two charts, that they indicate the 
supreme importance of so stimulating the income payments by private 
industry, to take up tliis slack if we are ever going to solve the question 
of unemployment? 

Dr. LuBiN. I think it is very significant that although the amount 
of Federal expenditures for relief is increasing, it is still small as com- 
pared to the total income of private industry. In other words, the 
percentage of the total national income payments that went to direct 
relief, payments to veterans and things of that sort, has been rela- 
tively small. 

The Chairman. In other words, aU that the Federal Government 
has expended by way of work relief and P. W. A. and payments to 
veterans, is actually but a drop in the bucket compared with the 
national income which we need to restore even the 1929 degree of 
prosperity. 

Senator King. Isn't it a fact that if you should make a proper 
appraisal of the amount which is coming out of the Federal Treasuiy 
directly for relief through the P. W. A. and the Works Progress and 
through cities and counties and States, and then further appropri- 
ations by the Federal Government for the Army and for the Navy 
and for increased shipyards, and what not, it would be a very large 
part of the national income? 

Dr. LuBiN. Well, of course "large" is a relative term. It is a 
significant amount, very definitely. The question is, not only how 
significant is it in terms of dollars but also how significant is it in 
creating jobs, and profits and dividends. That to me is the measure 
of its real significance. If it has a stimulating effect and helps keep 
things going, then I would say that the amount isn't so very great, 
if, as a result of every dollar you spend, you increase the income of 
our workers two or three times. I think that is the only criterion 
we can use in judging whether or not these expenditures should be 
made. 

Senator King. If you adopt a policy under the terms of which 
30 to 40 percent of the gross income of all the people of the United 
States is taken by the Government, to be expended as Congress and 
the Executive may determine, is it not a fact — I don't want to be 
argumentative — that you are drying up the fountains of private 
industry which would give employment to a larger number of people? 

> Exhibit No. 14, supra, p. 21. 
'Exhibit No. 51, suprn, p. 70. 



CONCENTRATION OF ECONOMIC POWER 73 

Dr. LuBiN. I will say this: If by spending 30 billion dollars you 
increase the national income by 40 billions, you've made a swell 
investment. 

Senator King. You think by the Federal Government spending 
50 billion it would have to take it away from the people? 

Dr. LuBiN. I said if by spending 30 billions you could increase the 
national income by 40, it is a swell investment. In other words, if 
by spending 30 of Government money you added 40 to the total in 
the form of wages to workers and profits and dividends, then I would 
say it is a very good investment. I am not saying to what extent it 
will result that way, but I do say if it does work that way it is a good 
investment. 

Senator King. Do I understand you to mean the more the Federal 
Government takes from the people and spends, the better it is for 
the people? 

Dr. LuBiN. It depends on the conditions. If everybody is work- 
ing, and such expenditures mean that the Government comes in and 
competes with private industry for labor and materials, I would say 
no, but if there are people unemployed and the factories unused and 
if by spending money the Government can create jobs in those fac- 
tories so that not only will wages be more plentiful, but profits and 
dividends larger, I'd say yes. 

Senator King. You are not assuming that the larger the expendi- 
ture by the Federal Government, the larger will be the expenditure 
by entrepreneurs and by those who are engaged in manufacture? 

Dr. Lubin. It depends entirely upon what conditions are under 
which the expenditures are made, the extent to which you have 
unemployment, unused capacity, and things of that sort. 

Senator King. We are entering a field of speculation and argument 
now rather than objective study. 

The Chairman. Dr. Lubin, have you covered all the charts? 

Dr. liUBiN. I have covered all the charts and I would like 10 
minutes to sum up. 

The Chairman. I was going to suggest that you do that. I was 
going to ask if you wouldn't in a few moments give your idea of what 
all of this means in teims of living standards and industrial efiiciency 
and the general outlook for the future. 

Dr. Lubin. I am not going to prophesy. Senator. I am going to 
leave that to some other member of the committee. But I think 
the significant thing that must be brought out is, first, that we have 
reached the stage where our population is not going to keep increasing 
at a very rapid rate. 

Prior to the last decade, we had to keep produciiig more and more 
because of the fact we had more and more people to feed and more 
and more people to house and more and more people to clothe. That 
in itself was a pressure upon industry, created a market for industry, 
which is not going to exist 20 years hence. Consequently, we must 
look for our market, not in a growing population, but in a higher 
standard of hving for the people already here. 

Now, what does this mean in terms of employment in our indus- 
tries? Well, we have already seen that our durable-goods industries 
are the ones that have to be kept going. The non-durable-goods 
industries are not our important problem. 



74 CONCENTRATION OF ECONOMIC POWER 

The question then arises (referring to chart on "Residential Units 
Provided for in New Non-Farm Construction")' as to what industries 
we may look to as the stimulants to employment. I think the answer 
is in housing. You can see from the chart ' that housing has a tre- 
mendous distance to go yet to get anywhere near in line with the total 
industrial production in the United States. 

I think that as you increase the income of our workers, as our 
factory pay rolls increase, the opportunities for building, that is, 
selling and renting houses will rise with them. We can not expect 
the maintenance of the so-called housing boom which may be under 
way, unless we have some stability in the earnings of our wage 
earners, who constitute about half of the gainfully occupied in the 
country. Housing is still a big field that can be developed. 

NECESSITY FOR GREATER PRODUCTION 

Dr. LuBiN. There are other fields that can be developed, and I 
would like, Mr. Chairman, to sort of touch on those indirectly. I 
think the outstanding thing that everybody will accept and agree to 
is that American industry is geared to large-scale production. Because 
of that fact, it must depend upon markets that can consume the out- 
put of mass-production methods. 

American industry cannot profitably maintain itself from the pro- 
ceeds of sales to that portion of our families that has incomes of more 
than $5,000. That segment of our population numbers but 794,000 
families and constitutes but 2.7 percent of the total families of the 
Nation. I want to repeat that, if I may: 2.7 percent of families in 
this country have incomes of $5,000 or more, and American industry, 
geared to huge mass-production methods, cannot live on those 
794,000 families. Nor, indeed, can American industry maintain itself 
on the sales to the income group that receives $2,500 or more. The 
families in this group comprise less than 13 percent of all our families 
and in numbers constitute a population approximately equal to that 
of the State of New York. In other words, all of the families in the 
United States put together, who receive $2,500 or more, wouldn't 
aggregate a population any greater than the State of New York. 

It is evident that mass production can't depend upon those families 
for their existence. Even in the income group of $1,250 and above, 
we only touch approximately one-half of our families. Fifty-four 
percent, some 16,000,000, of a total of more than 29,000,000 of our 
families, fall below the $1,250 income level. In other words, half 
our market in this country for our industrial output lies in families 
that earn less than $1,250 a year. 

There were approximately 9,500,000 wage-earner families in the 
United States in 1935 arid 1936, and I am taking that period because 
that was when we asked American families how they were spending 
their money. 

If one asked himself the question: "What would happen to American 
industry if every wage-earner family that was not on relief in that 

Eeriod, and had $1,250 or less a year to spend, had its income increased 
y about $2.25 a working day or to about $1,500 for each family? In 
other words, if every one of these families could have that much more 
to spend each day, what would happen to American industry? 

« Exhibit No. 22, supra, p. 33. 



CONCENTRATION OF ECONOMIC POWBB 75 

On the basis of commodities that enter into the family budget, we 
find the main item to be food. The studies of the Bureau of Labor 
Statistics show that famiUes with incomes of $1,250 or less spend 
about 44 percent of their income for food, the actual dollars being 
$355 out of an average of $800. For the 5,200,000 families that I 
mentioned, that is, wage-earner families who have not been on rehef, 
whose incomes were $1,250 or less, an increase of approximately $2.25 
a day in income would mean a rise in food expenditures of approxi- 
mately $800,000,000 a year. They would buy that much more food 
if they had $2.25 or more per day in income. 

Based upon our survey of clothing expenditures, the average 
American wage-earner family that earns $1,250 or less spends approxi- 
mately $82 a year for clothing. An increase in their income of a 
little over $2 a day can be expected to raise their expenditures for 
this item to around $162 a year. In other words, their expenditures 
for clothing will jump from $82 to $162 a year if their income is in- 
creased by a little over $2 a day. 

If you took all of the families earning $1,250 or less and you gave 
each one of them a little over $2 a day, the actual increase in expendi- 
tures in a year for clothes would be $416,000,000. 

Senator King. You are giving them no credit for saving any money. 
You are assuming they are going to spend it all. 

Dr. LuBiN. We are going to let them save some, too. What I am 
saying is this: We have taken families earning $1,250 and less. If 
their income was raised to $1,500, how would they spend the addi- 
tional money? Some of it is saved. They will buy more clothes. 
They will increase their expenditures on food. There are other things 
on which they won't increase their expenditures. 

We could go down the whole list of essentials that constitute the 
basic items in the standard of living of the American wage-earner 
families. We can expect a rise of $613,000,000 in expenditures for 
rent. We can expect a rise of $213,000,000 in their expenditures for 
fuel, light, and refrigeration. We can expect a rise of $224,000,000, 
if the incomes increase a little over $2 a day, in household furnishings, 
equipment and things of that sort. 

The expenditures of the American wage-earner family that has an 
income of $1,250 or less is about $38 a year on transportation, and it 
is primarily automobile transportation, including repairs. That ex- 
penditure would rise to $112 a family if their incomes were increased 
$2 a day. This means an increase in expenditure on automobiles 
and other forms of transportation of $385,000,000. Expenditures for 
recreation, which now take $33 of the average wage-earner family's 
income, could be expected to rise to $78, with a net increase in annual 
expenditure for these families, to the suppliers of recreation of ap- 
proximately $234,000,000 a year. 

In the field of medical care, to which approximately $22 is con- 
tributed by the average wage-earner family today, one could expect 
almost a 200-percent increase in expenditures, the amount eoing to 
doctors and medicines increasing by $208,000,000. 

This briefly gives a rough conception of what industries might be 
expected to gain from a rise in the national income, which would in- 
crease the amounts available to wage-earner families in the $1,250 or 
less income group by slightly more than $2 a day. It might be worth 
while to show the probable effect of such an increase in income upon 
nroducers of specific items. 



76 CONCENTRATION OF ECONOMIC POWER 

An interesting case at point is oranges. The average American 
age-earner family in the $1,250 or less income group spends 75 cents 
a year on the average on oranges, the total expenditure for the group 
being approximately 4 millions. As family incomes increase, it is 
found that at the $1,500 level the amount expended on organges 
more than triples, the average being $2.89. With an increase of a 
little over $2 a day for these families, the amount spent for oranges 
will increase by $11,000,000 a year. 

Producers of cosmetics and toilet preparations can anticipate a rise 
in sales to such families from $1.57 per family to $4.16, a net increase 
in their business of approximately $13,500,000 a year. The motion 
picture industry could look forward to a tripling of admissions sold 
to this cla,ss of our population. "With a rise from $4.14 per family to 
$12.82 per family for movies, this would mean an increase in sale of 
tickets to movie houses of approximately $45,000,000. 

Distributors of silk and rayon dresses could look forw^ard to an 
increase of $22,000,000, and manufacturers of electric refrigerators 
could expect an increase of $47,000,000. Automobile distributors 
could anticipate increased sales aggregating $119,000,000. 

The relatively high increase that may be expected for oranges may 
be attributed to advertising campaigns and to the effectiveness of the 
spread of dietary knowledge. The two to threefold increase in ex- 
penditure for all of these items as family incomes rise from lower to 
intermediate levels is suggestive of the enormous potentialities of 
consumption in the United States, while high elasticity of expendi- 
tures for automobiles and wearing apparel is particularly apparent. 
Indeed, a comparison of the groups with incomes averaging around 
$1,500 with the wage-earning family with income of $2,850 shows the 
$2,850 wage-earning family spends six times as much on automobiles 
as the $1,500 family does; more than twice as much for medicine and 
doctors, more than two and a third times as much for movies, almost 
three and one-half times as much for men's clothes and silk and rayon 
dresses; and three times as much on electric refrigerators. 

Summarizing what effect an increase of $2.25 a day would have 
upon American industry, if this amount were made available to 
families now earning $1,250 or less, the picture would run something 
like this: They would buy $800,000,000 worth of food more than they 
buy now; they would increase their purchasing of clothing by 
$4i6, 000,000; they would increase their purchase of housing or rents 
by $613,000,000; they would spend $213,000,000 more on fuel, light, 
and refrigeration; they would spend $385,000,000 more on transporta- 
tion, automobiles, etc.; they would spend $73,000,000 more on 
personal care; they would spend $234,000,000 more on recreation; 
they would spend $208,000,000 more on medical care. 

The Chairman. One of our correspondents wants to know whether 
they would spend anything more on newspapers. 

Dr. LuBiN. As a matter of fact, 3'^es. We have the figures for all 
reading materials. I haven't them with me here. 

Senator King. Wliat newspapers? [Laughter.] 

Dr. LuPi \\ [ would want to know what paper he represents before 
I would answer that. 

Now it should be borne in mind that these estimates cover the 
effects of the change of incomes of only a limited number of our pop- 
ulation, only 5,200,000 families out of 25,000,000 nonrelief families m 



CONCENTRATION OF ECONOMIC POWER 77 

the country, and they do not inckide any of the 10,000,000 single 
mdividuals whose annual income aggregates in excess oi 11% billion 
dollars. 

I bring these things to your attention because this briefly outlines 
what would happen to American industry if these families had in- 
comes only of $2.25 more a working day. It would have a tremen- 
dous effect upon the output of industry and upon employment. I 
might go a step further and say that if there were moderate increases 
in the incomes of all families and single individuals receiving less than 
$2,500, you could reasonably expect that most of our surplus capacity 
in the tjnited States would disappear, and in many industries our 
present capacity would run far short of the demands by the popula- 
tion of this country. 

Senator King. The aggregate surplus capacity is about 20 percent, 
isn't it? 

Dr. LuBiN. At the peak, but today it wotild probably run more 
than a third. 

Senator King. There has been a great deal of obsolescence since 
the peak, you know. 

Dr. LuBiN. It is notable how suddenly obsolescence disappears 
when you get orders and you don't have time to put in new machines. 

Senator King. Mr. Ford had this on obsolescence — he scrapped 
several plants that cost 50 or 60 million dollars, and some of the 
other plants, smelters, and mills which we have in. the West get 
obsolete just as your clothes get obsolete. 

Dr. LuBiN. That is so. I think the important thing, Senator, is 
that you have that same problem when you consider the fitness of a 
worker for a job. "When business is good and you can make money, 
an inefficient worker is a good investment; when business is bad and 
profits are low you want the best possible workers, and even at that 
it is hard to make money. I think the same is true about obsolescence. 

Senator King. With the new technological development they 
would lose money. 

Dr. LuBiN. In 1929 certain parts of the steel industry that had 
been shut down since the war and never intended to be opened again 
got going and made money. 

Mr. Henderson. I have some figures on obsolescence which I will 
be glad to introduce at a later time in the hearmg. 

The Chairman. This survey wliich you have just given us is an 
indication of what might be expected if the salaries or wages paid 
to the lower-income groups were increased. 

Dr. LuBiN. I am talking only about those who have not been on 
rehef. 

The Chairman. What can you say to us with respect to what the 
trend is as indicated by the figures which you have presented here 
today? Are we moving toward that increased income for these 
particular groups or are we not? 

Dr. LuBiN. At the present moment we are moving in that direction. 
In other words, ever since this summer the trend has been toward 
increasing employment, something approximating a milhon people 
have found jobs in industry. Pay rolls are going up. The index of 
production will touch about 101 this month as compared to 77 this 
summer. That is a large increase. 



78 CONCENTRATION OF ECONOMIC POWER 

How long it is going to continue upwards I don't know and I 
wouldn't want to forecast. If I r^ight tie up that question with a 

feneral conclusion of what I am trying to bring out, I would say this: 
'he problem that we must face is one of economic security, and by 
economic security I don't mean only for workers; we must have it 
for the investor and for the farmer. I think that is the first problem 
we must face. The second problem is one of a rising standard of 
living. Our standard today, based upon per-capita income figures, 
shows that we have a considerable distance to go if we are going to 
get back to the point where the amount of goods and services avail- 
able for each man, woman, and child in this country is equal to what 
was available in former years. 

To get this economic security and to get this rise in standard of 
living, I think two things are involved. We must have more and 
morp production. We just have to produce more and more. Of 
course, production must be balanced so that you won't be overpro- 
ducing one type of commodity and underproducing another type of 
commodity. 

Second, and equally as important, if not more important, is some 
equitable distribution of that produced income which will permit us 
to absorb the products of agriculture and of industry. In other 
words, we must have a distribution of the national income which will 
keep moving the goods which we must produce more and more of if 
we are to have a higher standard of living. 

You can't have a higher standard of living unless you produce more 
and more goods. With fewer goods to go around you can't live a£ 
well, taking the Nation as a whole, as when there are more goods. 
Our national income must go up from $61,000,000,000 this year, to at 
least $75,000,000,000 if not $80,000,000,000, if our standard of living 
for thjB country as a whole, taking our increased population into con- 
sideration, is to be as high as it was in 1929. You^have niore people 
to feed, cloth, entertain and keep healthy. With our present popu- 
lation, if there were to be available in the country as much goods per 
capita and as much service as there was in 1929, we would have to 
increase our national income, as I said, from $61,000,000,000 to some- 
thing between $75,000,000,000 and $80,000,000,000. 

The Chairman. I have observed. Doctor, that throughout your 
testimony you have been referring to 1929 as a norm, as it were. 

Dr. LuBiN. I would rather not call it a norm. All I can say is that 
in 1929 we were using more of our labor and productive resources than 
in any year in history. What I have attempted to do today is sliow 
what we have been wasting. 

The Chairman. In 1929 we had reached our higliest peak of national 
income. We had more employment than at any time since. But isn't 
it a fact that in 1929 there was also a rather severe unemployment 
problem? 

Dr. LuBiN. It is estimated there were about a million eight hundred 
thousand people unemployed on the average in 1929. That to me is 
not an unemployment problem. 

The Chairman. But there were that number. How about the 
incomes of families at that time? 

Dr. LuBiN. That is why I say that we must not only produce more 
and more, but we must also distribute our production in a maimer 
that will, permit our families to consume these goods as they come 



CONCENTRATION OF ECONOMIC POWER 79 

out of factories, mines, and farms. If you are going to maintain an 
economic system such as ours with our factories and mines, you will 
require a labor supply of a million eight hundred thousand on the 
average to keep going, because no industry operates 52 weeks a year. 

The Chairman. What I am getting at is, would you regard as a 
scientific economist, the living standard of 1929 as adequate? 

Dr. LuBiN. No. The very fact that the machine broke down with 
the distribution we had then is to me evidence of the fact that distri- 
bution of income in 1929 was faulty. Perhaps I can summarize in this 
way: A more equitable distribution is more than an ethical problem. 
It is not only a question of having everybody in good health; there is 
more than that to the problem. 

To me it is a problem of keeping the gears of the economic machine 
constantly in mesh. I don't know any other way of keeping them 
in mesh than by so distributing our income that it will pull into our 
homes, through a higher standard of living, the goods, that is, the 
clothing, food, entertainment, education, and so forth, which our 
economic machine must turn out at a rate considerably higher than 
at the present time, even if we were to get back to a standard no higher 
than that of 1929. 

Senator King. I am in agreement with your statement. We have 
got to increase materially the productivity of mines, and farms, and 
our manufacturing institutions. I wanted to call your attention to 
one statement that I think might need a httle clarification. You 
state that the system broke down in 1929. That is a statement to 
which all of us would assent. There may come a calamity or catas- 
trophe to a nation where it has a good economic system. Tliere were 
then combinations of circumstances which tended to produce a halt 
in our economic progress. For instance, there was the world indebted- 
ness. Another reason, we were losing our export market. Those con- 
ditions materially contributed to a halt in our production, and, of 
course, in the economic development of our country, So I don't 
think that the system per se broke down, but there were conditions 
which arose that interrupted its progress. 

The Chairman. In other words, we had a crash but that wasn't a 
break-down. 

Senator King. Well, I don't know. If you want to know what was 
one of the principles of the crash, it was the folly of the American 
people in gambhng in the stock market throughout the United States 
and borrowing some $8,000,000,000 from the banks in order to buy 
stocks— farmers' and laborers' and shoe shiners' and everybody else's 
gambling propensities in part were the cause of the crash. 

Representative Sumneus. Dr. Lubin, in order that I may have a 
little additional information as to this economic picture, in '29 I had 
the impression that a great deal of our production was finding a market 
abroad, and I believe we were loaning a good deal of money to the 
people to buy with who never paid it back. 

Dr. Lubin. We were giving it away. 

Senator King. Two billion dollars each year. 

Dr. Lubin. My own feeling is we would have been better off if we 
had given it away to our own people rather than have loaned it abroad 
and never gotten it back. 



gQ CONCENTRATION OF ECONOMIC POWER 

Representative Sumners. That makes it a bit of an abnormal year 
in a sense. I withdraw that question because I want to hurry along. 

Dr. LuBiN. But let us not forget that we had been experiencing a 
steady upward trend in our production and national income. The 
year 1929 was abnormal in a sense but if we had kept going at a relative 
rate of increase 

Representative Sumners (interposing). I was going to withdraw 
the question. There is one thing, though, that I believe while the 
Doctor is on the stand the members of the committee ought to con- 
sider, and that is in the economic picture this expenditure by the 
Federal Government of money which we are not collecting. We speak 
of the national income, and we include in that national income houses 
and all other things which are not liquid. I mean you can't go to 
the tax collector and give him a house; you have got to, somehow or 
other, get the money out of all this business to go and give the tax 
collector. I haven't studied it out; I don't know but that we are 
spending money that we are expecting the next generation to pay. Is 
there anytliing to be suggested as to how we can raise this money and 
keep a little more economic soundness in the Federal organization or 
is the increase — I am asking this in all seriousness — of the Federal 
indebtedness a threat to the economic stability of the country? 

Dr. LuBiN. You are asking for a personal opinion. I think our 
committee is going to have to look into that whole question. 

Representative Sumners. I withdraw the question. I think so 
myself. 

The Chairman. Are there any other questions? If there are no 
other questions, the committee will recess until tomorrow morning at 
10:30. Dr. Thorp will appear at that time. 

(Whereupon, at 4:10 p. m., a recess was taken until Friday, De- 
cember 2, 1938, at 10:30 a. m.) 



INVESTIGATION OF CONCENTEATION OF ECONOMIC POWER 



FRIDAY, DECEMBER 2, 1938 

United States Senate, 
Temporary National Economic Committee, 

Washington, D. C. 

The Temporaiy National Economic Committee met pursuant to 
adjournment yesterday, at 10:30 a. m., in the caucus room of the 
Senate Office Building, Senator Joseph C. O'Mahoney presiding. 

Present: Senators O'Mahoney (chairman), King, Borah; Repre- 
sentatives Sumners, Reece, Eicher; Messrs. Lubin, liinrichs, Douglas, 
Frank, Patterson, Arnold, Berge, Ferguson, Davis, Oliphant, Peoples, 
Henderson. 

Present also: Directors of Studies Dr. Wiilard Thorp, Commerce; 
Mr. Hugh B. Cox, Justice; Mr. Willis J. Ballmger, Federal Trade 
Commission; Mr. Thomas C. Blaisdell, Securities and Exchange 
Commission; Mr. J. J. O'Connell, Treasury; Miss Aryness Joy, Labor. 

Present also: Senator John G. Townsend, Jr., of Delaware. 

The Chairman, The first witness this morning will be Dr. Wiilard 
Thorp, now associated with the Department of Commerce. I will 
ask Dr. Thorp to take the stand. 

Dr. Thorp, for the benefit of the record, will you give us 3^our name, 
please? 

Dr. Thorp. Wiilard L. Thorp. 

The Chairman. What is your background, briefly? 

Dr. Thorp. I was a member of the research staff of the National 
Bureau of Economic Research from 1923 to 1933; chief statistician 
of the New York St;^te Board of Housing, 1925-26; professor of 
economics at Amherst College, 1926 to 1933; Director of the Bureau 
of Foreign and Domestic Commerce, 1933-34; member of the Federal 
Alcohol Control Administration, 1933 to 1935; chairman of the Ad- 
visory Council in the N. R. A., 1934-35. Since thSn I have been 
Director of Economic Research and Editor of Dun's Review with 
Dun & Bradstreet Inc., and I am here as adviser of economic studies 
in the Department of Commerce. 

Senator King. I think he has demonstrated his qualifications. 

The Chairman. Thank you. Dr. Thorp. Dr. Thorp, you may 
proceed with your statement. Will you be good enough to do so? 

TESTIMONY OF WIILARD L. THORP. ADVISER ON ECONOMIC 
STUDIES IN THE DEPARTMENT OF COMMERCE, WASHINGTON, 
D. C. 

Dr. Thorp. Yesterdaj'- you heard evidence about the performance 
of our economic machine. Dr. Lubin reported on the actual flow of 
goods and services, the total produced, and the diflering achievements 

81 



82 CONCENTRATION OF ECONOMIC POWER 

of the various parts of the economy. He also discussed the meaning 
of this record in terms of economic loss for different classes of people. 

Now comes the question of what the economic structure is, the 
machinery through which and by which these processes operate. 
Such an analysis is basic because that is where economic problems 
come from. Our failure to maintain the past rate of advance in the 
standard of living is certainly not due to any lack of management 
ability, capital, labor, or natural resources. There is no such simple 
answer. 

My task today is to examine the organization and processes of 
operation of the factors in business enterprises and industries. No 
analysis would be necessary if this were a simj^le machine with many 
like parts. The fact is that it is exceedingly complicated with units 
varying from the roadside stand run by the farmer's daughter to the 
giant railway system. Variations appear because of differences in 
product, process, location, market, habits, and practices which have 
become the custom in this or that industry or trade. 

Furthermore, these basic sources of differences within the structure 
are continually changing. As we have carried specialization further 
and further, the amount of dependence of the parts upon each other 
has increased. Lack of adjustment in individual parts of the econ- 
omy to changing conditions can therefore affect areas far wider than 
that of the original difficulty, and may even spoil the rhythm of the 
whole machine. 

The character of the economic structure which I am to describe is 
continually changing. Advances in technology, for example, may 
create new industries and destroy long-established ones. The initia- 
tive of businessmen, individually and collectively, is itself a constant 
creator of change, w bile too much inertia, on the other hand, may also 
cause a maladjustment. Some situations have sufficient public im- 
portance to warrant government intervention of one kind or another. 
Under forces such as those, our economic pattern has changed greatlv 
in recent years, both within the structure itself and in the relationship 
of government to industry. 

It is of course impossible for me to present a complete picture of our 
economic machinery. Not only is there the time limitation, but at 
many points, authoritative information is lacking. Many of the re- 
search projects now under way will aid greatly in understanding the 
nature and location of our economic problems. 

It is not my purpose, in describing the economic structure, to offer 
any judgments. This is a blue print, only partially developed, of a 
very complicated machine. The plan of presentation moves from the 
specific to the general. That means starting with individual business 
enterprises, considering them in terms of their legal form of organiza- 
tion, their relative size, and their functional characteristics. Next 
will follow a discussion of industries and trades, their different pat- 
terns and problem?, the extent of cor.centrfjtior. and ether alternative 
forms of collective action, and interindustry relationships. Finally, 
we shall consider various broad factors which may also create problems 
of adjustment. 

THE BUSINESS POPULATION 

Dr. Thorp. So we start with the individual business enterprise, the 
basic unit in the system. Dr. Lubin started yesterday with the record 
of population. I want to start with the record of business population. 



CONCENTRATION OF ECONOMIC POWER §3 

His problem was much easier because when you are counting people, 
you have no question about what unit to use, but when you are trying 
to count business enterprises you have an entirely different problem. 

I could perfectly well and honestly say that there are 500,000 busi- 
ness enterprises in the country, or I could say there are 30,000,000 
business enterprises in the country. If I said 500,000, 1 would be con- 
sidering the corporations, the active corporations which are units es- 
tablished specifically for business purposes. 

If I said 30,000,000, I would be regarding each family in the United 
States as a business unit, and, of course, if one wanted to compare the 
development of economic activity today with the development 50 
years ago, he would have to take the family into accoimt because 
the family 50 years ago was the producer of bread, for example, and 
of clothing and of -many things which now have been transferred into 
what we more normally think of as the business system. 

We can find many different possible definitions in between; for 
instance, we could limit it to families which had employees. There 
are about 2,000,000 families which have domestic servants, so they 
in a sense are perhaps more properly business units than the others. 

There are 700,000 indi\ddual professional persons, lawyers, doctors, 
dentists, and people of that sort. Shall we regard them as units or 
not? Even if we arrive at some clear-cut definition we still have a 
number of problems that remain. Take, for example, the field of 
construction ; in construction a large number of the operators move in 
and out; one month the man will be doing work on a subcontract in 
which he is the businessman, the next month he will be working as 
an employed carpenter under some other contractor, so that you 
have a continual shift back and forth of the business population. 

Or, another question. What shall we do about subsidiaries? They 
are separate corporations. Are they to be regarded as separate mem- 
bers of the business population or not? 

Well, I am sorry to say that there are no Government figures 
available with regard to the number of business enterprises. Our 
censuses, as for example, the census of manufactures, are taken on 
the basis of plants — rather the term they use is "establishments" — 
and not in terms of enterprises or companies. And so in order to give 
you something of a consistent picture I will have to present a record 
compiled by Dun & Bradstreet, United States Business Population, 
over a period of years. This first chart is on United States business 
population. 

(The chart referred to was marked "Exhibit No. 52" and appears 
on p. 84. The statistical data on wliich this chart is based are 
included in the appendix on p. 227.) 

Dr. Thokp. The line which I want you to look at for the moment 
is this top line, the total number of listed concerns. That includes 
the enterprises which would ordinarily be thought of as coming in 
the fields of mining, manufacturing, wholesale trade, retail trade, 
and most of the service industries. It does not include financial 
organizations, railroads, professional persons, or farmers. It in- 
cludes utilities, but the utilities constitute a relatively small number 
of enterprises. Of course we have some 6,000,000 farmers, or farms, 
and if one included them they would dominate our picture of business 
enterprises. 



84 



CONCENTRATION OF ECONOMIC POWER 



The basis of this chart is sufficiently consistent for the period for 
our purposes. The country has been covered with about the same 
degree of uniformity. It is possible that in any given year there 
may be some minor errors, but the chances are that the errors are 
fairly constant, so that the picture of what has happened to our busi- 
ness population over time is, I think, an accurate one. 

One other point perhaps I should add as it occurs to me, and that 
is that an enterprise such as a chain-store system would count as one 
enterprise. These are business units, they are not operating units. 

BUSINESS POPULATION GROWTH 

Dr. Thorp. If we go back to 1900, you notice that there are about 
1,200,000 enterprises. There is a steady increase in the business popu- 
lation, halted temporarily in 1919, but rising to a peak in 1929 when 
there were 2,213,000 enterprises in this list. 

ExHiRiT No. 52 

UNITED STATES BUSINESS POPULATION 



THOUSANDS OF CONCERNS 

2.500 



ZOOO 



THOUSANDS OF CONCERNS 

2.500 



2j000 



1.500 




1.000 



1915 1920 1925 1930 1955 1940 



Froin 1929 there is a drop of about a quarter of a milhon in the- 
business population, and then the advance is resumed. The latest 
figure, which is July 1938, is 2,102,000 — all these figures for each 
year are for July. 

Senator King. Will you permit a question? There are more than 
1,300,000 of small shopkeepers, storekeepers in the country. Have 
you included those in that? 

Dr. Thorp. Yes. As a matter of fact, they are the bulk of this 
picture. Most of these enterprises are small and in the retail trade. 

The Chairman. This includes both corporate and uncorporate? 

Dr. Thorp. Yes, This includes all enterprises regardless of the 
form of organization. 

Representative Sumners. Do you have the figures which would 
influence that line? If you had those — I am not asking my question 



CONCENTRATION OF PXONOMIC POWER §5 

properly. The chain-store development has added a great many 
units under one organization. If they were listed as separate busi- 
ness organizations what effect do you think it would have on the line 
of your chart, after about 1925? 

Dr. Thorp. In 1929 it would increase the total number by an addi- 
tional figure which is around 145,000. The 1935 figure is 127,000. 
In other words chain stores according to the census of 1935 had 125,000 
stores. So that if you added these units it would increase the fine 
by about that number. Of course, that would be a steady increase 
over the period. 

I might point out that the increase in the number of concerns since 
1933 has one important factor, and that is the opening of many new 
liquor stores. There are about 2,800 alcohol producing enterprises, 
about 10,000 wholesalers, about 70,000 drinking places, and 8,000 
beer and liquor stores. Of course, we don't know how many of those 
wholesalers, for example, are wholesalers who already existed as 
wholesalers of groceries and have added alcohol distribution to their 
function. We have these figures because they are required under 
Federal statute to have a Hcense. 

So somewhere between 20,000 and 90,000 of this increase since 1933 
is attributed to the increase as a result of the repeal. 

Senator King. I suppose it takes into account the fact that there 
are nearly 18 new industries and businesses developed this past year. 

Dr. Thorp. Yes; all the way through, of course, that same thing 
has been happenmg. We have had new industries that have come 
into this picture, but the situation mentioned above is rather unusual. 
I don't believe any other industry ever came into existence, or shall 
we say was reincarnated quite so rapidly as that particular one. 

Representative Sumners. You had a little body to start with. 
[Laughter. 1 

Dr. Thorp. One other thing that is interesting to keep in mind in 
looking at this picture is the fact that this rise from 1900 to 1930, at 
any rate, was more rapid than the rise in population so that, whereas 
in 1900 there were about 65 people for every business enterprise, by 
1930 we had 56 people for every business enterprise. 

One aspect of this record that is particularly interesting 

Representative Sumners (interposing). Dr. Thorp, would you make 
some explanation, if there is any explanation in your judgment, as to 
the decrease in the number of persons per enterprise during that period 
of increase? 

Dr. Thorp. I think the decrease in — or perhaps we should put it, 
the more rapid increase in the number of enterprises than in the popu- 
lation is probably due to certain new activities which have come in. 
A very large part of it is probably attributable to the automobile in- 
dustry, and especially the development of filling stations. Then we 
have a good many specialized shops which never existed before, arising 
out of electric appliances and things of that kind. 

Mr. Oliphant. Over how long a period did that relative increase 
take place? 

Dr. Thorp. From 1900 to 1930 this increase in business population 
shows a straight-line trend. The increase in personal population was 
flattening out, so it may be, if one took 1900 to 1910, they would be 
n\ore closely together. Of course, during the period since 1930 it 
should be pointed out that personal population has kept on increasing 
while the business population is somewhat lower. 



gg CONCENTRATION OF ECONOMIC POWER 

Representative Sumners. Doctor, there is one point in there that 
seems to me to have some importance, and that is the figures which 
you have given pursuing the relative decrease in number of persons 
connected with individual businesses. Would you account for that 
in the reduction of growing businesses or the relatively larger number 
of smaller businesses established in that period? 

Dr. Thorp. I don't believe I explained those figures clearly to you, 
because that is not a figure of the number of persons attached to a 
given enterprise, but a comparison of the number of enterprises with 
the total population in the country. 

Representative Sumners. Oh, I beg your pardon; I didn't get the 
figures; I am sorry. 

BUSINESS BIRTHS AND DEATHS 

Dr. Thorp. Now, I should like to call your attention to these two 
lines at the bottom of the chart, because in the process of keeping 
track of this population, it is possible to see how many new enter- 
prises are formed and how many disappear from the record each 
year. According to the latest figures, those for 1937, 400,000 new 
enterprises were opened, and 351,000 discontinued their operation. 

That means that for each working day in this country, 1,300 new 
enterprises open their doors, and 1,150 disappear. Of course those 
are, as you all know, very small enterprises, and very largely in the 
retail trade, but I do want to point out this extraordinary turn-over 
which takes place in the business population ; as one follows it through 
the period of time each year about one-fifth of the business population 
disappears, but is replaced by an even larger number. 

You will notice that except for one year, in 1917 and for the period 
1930 to '33, we have had more new enterprises than we liave had 
disappearing enterprises. 

Senator King. Did some of those disappearing enterprises merge 
with the new enterprises, or were they amalgamations? 

Dr. Thorp. The problem of deciding what is a new enterprise is 
an extremely interesting one. For instance, suppose that a partner- 
ship was in existence and one partner dropped out so that a new 
partnership was formed, is that or is it not a new enterprise? That 
IS like the old logical problem of a new blade in a knife, is it a new 
knife or not? 

For tliis purpose, an enterprise is not regarded as a new enterprise 
if it changes its name or it changes its location within the community, 
but this does include changes in the form of organization. For 
instance, when a partnership is incorporated, it is counted as a new 
enterprise. And it is really a new enterprise for certain purposes. 
For example, for purposes of taxation, it is shifted from one type of 
tax to another, or for the purpose of the extension of credit, its re- 
sponsibility as a debtor is different when it becomes a corporation. 

Senator King. Have you any figures indicating the number of 
those new organizations to which you have referred, whether they 
are partnerships or corporations? 

Dr. Thorp. I have those and plan to introduce them. Senator. 
But one thing about this, a rough estimate which I have made is 
that about two-fifths of these cases of new enterprises and discontinued 
enterprises represent mere replacements of one form or another. Mr. 



CONCENTKATIOX OF ECONOMIC POWER 



87 



Jones has sold out to Mr. Smith and Mr. Smith carries on the same 
enterprise. 

The Chairman. Suppose you had a line on that chart which in- 
dicated the number of failures in each of these years. How different 
would it be from the line showmg the discontmuances? 

Dr. Thorp. I can only answer that in terms of individual groups. 
In manufacturing, about 20 enterprises discontinue for every one case 
that disappears through court actions by the use of the bankruptcy 
procedure. In retailing, 45 cases close for every one which uses bank- 
ruptcy. In other words, most of these are cases where the doors are 
closed, presumably the bills are paid or they are not large enough to 
concern anyone, and there is no legal problem involved. 

Senator King. Voluntary liquidation. 

Dr. Thorp. They are voluntary liquidations. 

One other thing is important. The bankruptcies show much wider 
changes from year to year. You see even here in our worst year, 1932, 
we had something like 300,000 new enterprises starting, but the num- 
ber of bankruptcies in that year was almost at an unprecedented peak. 

SURVIVAL QF NEW ENTERPRISES 

Dr. Thorp. I should like to call your attention now to this chart. 
This is introduced as an illustration. It happens to introduce some 
evidence on a subject about which our knowledge is rather limited and' 
on which further studies may modify the exact figures. 

This is a .chart entitled, "Length of survival of business concerns, 
Poughkeepsie, N. Y., 1843-192G," and it is a study of the changes in 
business in Poughkeepsie from 1843 to 1926. In ^liis case, changes in 
the form of ownership were not included. 

(The chart referred to was marked "Exhibit No. 53" and appears on 
this page.) 

Exhibit No. 53 

LENGTH OF SURVIN^L OF BUSINESS CONCERNS 
POUGHKEEPSIE, N.Y. I843H926 

NOT COUNTING CHANGES IN PROPRIETORSHIP 



KIND OF BUSINESS 


L 
OVER 3 YEARS 
PERC 


NGTH OF SURVIVAL 

OVER 10 XFARS 
INTAGE OF LONGER 


OVER 20 YEARS 


MANHJFACTURING 


53.1 

46.8 
44.9 
44.9 


25.3 
31.2 
21.8 
20 9 
18.8 


12 6 


WHOLESALE. 
RETAIL 


167 
9 9 


CRAFT 


9 2 


SERVICE 


8 1 






TOTAL 


46.9 


21.4 


V 9 7 







SOURCE . R G AND A.R. HUTCHINSON AND MABLS NEWCOMEH 

]2;40i— .".y— pt. ]■ T 



88 CONCENTRATION OF ECONOMIC POWER 

Dr. Thorp. You will notice, of the enterprises which started in the 
manufacturing field, 53 out of each 100 lasted over 3 years; 25 out of 
each 100 lasted 10 years; and 12.6 out of each 100 lasted 20 years. 

Wholesale concerns showed a better record of survival. In retail 
trade, on the other hand, less than half survived 3 years; less than 
22 percent, more than 10 years; and less than 10 percent, more than 
20 years. 

The crafts in this case, including such groups as barbers and tailors, 
showed even a lower percentage of survival, and the service industries, 
restaurants and such, also showed a relatively low survival. Taking 
all types of business, 46.9 percent lasted more than 3 years; 21.4 per 
cent, more than 10 years; and 9.7 percefit, 20 years or more. 

I might say that similar studies have been made not covering quite 
so wide a field for other areas. The McGarry study for Buffalo and 
the Boer study for Pittsburgh both show a much higher rate of mor- 
tality than is shown here. So I think that if anything these figures 
for Poughkeepsie, which is probably a relatively stable community, 
at least economically speaking, would be a conservative picture of 
mortality. 

Dr. LuBiN. Mr. Thorp, in essence this means that more than one 
out of two firms that started in that city died within 3 years. 

Dr. Thorp. That is correct. 

Senator King. Is that a manufacturing center or largely dependent 
upon agricultural surroundings? 

Dr. Thorp. It is a fairly diversified center. It has some manu- 
facturing industries. I should say, if anything, it has more than the 
average for a community of its size. Its population is about 40,000. 

The Chairman. But I don't regard it as typical of the country at 
large. 

Dr. Thorp. I don't know any community that is typical of the 
country at large except Middletown. I do regard this chart as typical, 
and it perhaps shows a longer survival than would be true for the 
country at large. There are studies that show, for example, that in 
certain communities in the survival. of grocery stores only half of the 
grocery stores will survive 1 year. Our records at Dun & Bradstreet 
show that in Los Angeles for example there is a turn-over in total 
business enterprises of about 100 percent per year. 

The Chairman. This chart in other words presents an miusually 
good record of survival. 

Dr. Thorp. Yes, sir; I think this is probably an unusually good 
record of survival. 

FREEDOM OP BUSINESS OPPORTUNITY 

Dr. Thorp. This raises a problem that I would like to discuss 
briefly for a moment before we come to our next main topic. This 
evidence certainly shows that there is in the countiy a continual flow 
of enthusiastic and hopeful individuals starting out into business; that 
from the point of view of freedom of opportunity this is a demon- 
stration of the fact that at least 400,000 people feel that they have an 
opportunity in the business world, and they start out each year. 

The record also shows that in most cases they were somewhat too 
optimistic, that when their working capital and all the working capital 



CONCENTRATION OF ECONOMIC POWER §g 

available from all their relatives is exhausted, the doors are shut and 
and they return to some other kind of occupation. 

I don't think it would be fair to leave the picture there. At the 
otliOT extreme there are certain situations in which it is virtually im- 
possible for a new enterprise to appear. For example, the natural 
resources required in many industries are now largely held by existing 
enterprises. We haven't any completed studies on the holding of 
reserves, but I think for our purposes it is sufficient to indicate that 
in certain types of industries it would be very difficult to enter because 
existing reserves are already generally held. 

In other cases, patent situations may be an effective bar to entering 
a particular type of business activity. 

Then in the third case there are many situations where outlets are 
controlled, or there has been built up such a consumer acceptance by 
existing enterprises that it is difficult, at least, for a new enterprise tc> 
break into the market. 

I am not saying that it can't be done, but as against a product which 
has existed for many years, which is vigorous in its advertising, which 
is sold throughout the country and widely known, obviously it is 
difficult for a new enterprise, particularly if it is producing virtually 
an identical commodity, to enter into that activity. 

The Chairman. In this sense, the phrase "new enterprise" refers 
solely to a new concern dealing in an old industry or an old activity. 
You don't mean to indicate that there is any obstacle to the starting 
of an industry or a business which has never been undertaken before? 

Dr. Thorp. No ; I have no intention of indicating that, although I 
do think that, to the degree to which new enterprises and new indus- 
tries may grow up on the basis of technological development, patent 
controls may tend to limit the number of people who can, at least for a 
period of time, participate in the development of that new industry. 
Now, in between these two groups 

Mr. Oliphant (interposing). Looking over a period of time, do 
you notice any difference in that mortaUty rate of failures? Take, 
for instance, the retail grocery outlet. Is there any difference in the 
mortality rate with the development of chain stores? 

Dr. Thorp. On the basis of the Poughkeepsie record, which was 
broken down into three 30-year periods of time, there was a different 
rate. The rate of survival was better in the period 1874-1903 than 
it was in the first 30-year period (1844-73) or in the latest period 
(1904-33). These comparisons suggest that the different rates of 
survival are related in considerable measure to local changes in popula- 
tion growth, changes in business conditions, etc. 

The authors of this study state that the length of life of grocery 
stores has apparently not been reduced by chain store competition. 

Mr. Oliphant. Suppose we concentrate on the retail field for a 
moment. Have there been studies of the mortality rate in the retail 
field? 

Dr. Thorp. There are studies for individual communities. The 
complication about that is that the mortahty rate is very largely a 
function of the birth rate. The main part of deaths in ^ any year 
depends upon how many businesses were started in that year or the 
year before, or the year before that. 

Mr. Oliphant, Is the converse equally true? 



go CONC'ENTKATION OF ECONOMIC POWER 

Dr. Thorp. I suppose the converse is partially true. The diffi- 
culty seems to be that people decide to go into business and persist 
in that, and regardless of whether it is 1933 or what year it is, they 
start in whenever they fee] ready to do so. 

Mr. Oliphant. Generally speaking, then you would say we have 
no figures on whether or not the chains 

Dr. Thorp (interposing). I would say we have no satisfactory 
figures. Some evidence I am going to present a little later on trends 
in retail outlets will have some bearing, I think, on the problem. 

Mr. Oliphant. That may answer my question. 

LARGE CAPITAL REQUIREMENTS A BARRIER 

Dr. Thorp. I have spoken of what I might describe as the tno 
extremes in freedom of opportunity. Another situation that is be- 
coming increasingly important involves the cases which are controlled 
chiefly by the importance of research and the costliness of develop- 
ment. .This sort of situation necessarily places the development in 
the hands of those who can command capital. In many lines the old 
and relativelj^ successful firm is able to add products and processes 
where a newcomer in the field would find it extremely difficult if not 
impossible to obtain the large sums of capital which are required. 
This restricts certain types of opportunities, by and large, to the 
larger enterprises. 

For example; the Tarifi" Commission records state that an average 
blast furnace costs $2,500,000 to construct, that in 1937 tliree con- 
tinuous mills for hot^rolled products were completed, costing more 
than $20,000,000 each. 

. For further illustrations one merely needs to turn to current busi- 
ness reports. For example, consider just the synthetic textile field. 
The Industrial Ra^^on Corporation had a new plant with a new con- 
tinuous spinning process, estimated cost, $11,000,000. Of course, 
particularly exciting is the announcement of the Du Pont Co. of its 
new product, Nylon, described as an oiganic textile fiber, prepared 
from raw material from the mineral kingdom — made of coal, water, 
air, and other substances. Thev" announce a projected plant expendi- 
ture of $8,000,000. Tliis, of course, does not include the millions 
which must have gone into research in past years. 

Almost simultaneously the Celanese Corporation has announced a 
project for spending $10,000,000 on a new plant to produce an en- 
tirely new synthetic yarn. 

These three illustrations I think serve to point out the fact that in 
cases where large sums of capital are required, where research over a 
period of time is required, our present pattern frequently — in fact, 
usually — is for an established enterprise in the field to be able to 
make the type of expansion that is called for. 

Senator King. You would include in that, would you not, the mecha- 
nisms required for the production of ores, some of the great smelters 
and ore-reducing plants costing several millions of dollars, so a small 
mining man would be unable to build the necessary plant for the 
reduction of his ores? 

; Dr. Thorp. Our mining and metal treatment industries are among 
our industries that require large sums of capital. 



CONCE^■TRATIOX OF ECONOMIC POWER QJ 

Kepresentative Sumners. Doctor, are you going to discuss any- 
where the question as to whether or not, in the public economy, it 
may be possible for a people to advance their mechanical and scientific 
developments by patent, and so forth, m.ore rapidly than they can 
take care of the consequences of such development and really bring 
about a battle between machinery and human beings? 

Dr. Thorp. I think that is a very important problem, but my own 
feeling is that it is so important that we will not have time to discuss 
it today. The whole problem of the effect of patents on our economy 
is a tremendous one. I am going to introduce some evidence about 
the degree to which patents are issued and in general the part that 
technology plays but I think it calls for more elaborate discussion 
than I can give as to its social significance. 

Senator King. Couldn't you state the generalization that the 
mechanization to which we have been subjected during the past few 
years has increased jobs to a larger extent than it has put men out 
of employment? For instance, the automobile industry has destroyed, 
perhaps, the old wagon and some of the means of transportation of 
earlier days, but it has given employment to millions of people in 
direct emplo3'ment, and then in the production of gasoline and its 
consumption through the various filling stations. 

Dr. Thorp. I. think the problem about the absorption of the tech- 
nologically unemployed depends on the length of time you are gomg 
to use for a measure. For example, over the last hundred years 
it would be difficult to demonstrate teclmological unemployment, 
because in that case there would be no employed. Certainly the 
displacement by machinery has far exceeded the total population over a 
period of that length. 

On the other hand, over as short a time as the last half dozen years, 
in which workers have not been absorbed readily, it is perfectly con- 
ceivable that any teclmological advances, unless they are very quickly 
reflected in prices, may temporarily result in increased unemployment. 

Representative Reece. Doctor, do you think the chart to which 
you have just referred has any significance in eur competitive system, 
or the degree to which our competitive system might be interfered 
with by certain practices wdiich have groum up? 

Dr. Thorp. I am not sure that I get the exact focus of your ques- 
tion, but it suggests at least two things to me that I should like to add 
to this discussion. The first is that inasmuch as a competitive system 
is supposed to adjust itself by the entrance and exit of firms, one could 
perhaps ma]i:e the simple conclusion that this was an excellent demon- 
stration of the competitive .system at work. 

However, one would need to make further studies to determine 
whether it was the efficient concerns, the desirable concerns, which 
survived or not before one could tell whether it was working eflBciently. 

I might say that this problem has become sufficiently disturbing m^ 
some industries and areas that there are beginning to appear in certain 
States forms of State control which endeavor to deal with it. For 
example, Wisconsin now has a requirement of automobile dealers 
that they must obtain a certificate from the State government before 
they can engage in that occupation — a definite attempt, you see, to 
limit the turn-over and control that particular industry. 



92 CONCENTRATION OF ECONOMIC POWER 

THE BASIC DILEMMA 

Representative Sumners. Doctor, do you think it is valuable to 
try to protect a man against the chance of going broke? 

Dr. Thorp. I think that is one of our basic dilemmas. Oftentimes 
one can visualize a greater efficiency at the moment if you could plan 
the situation, but the very meaning of planning is that the individual 
is no longer left as free as he was before. 

This freedom of opportunity certainly does mean that people are 
left free to lose their own and their mother-in-law's savings if they so 
desire. 

Senator Borah. The public is concerned about how he loses it, 
whether somebody forces him to lose it by improper practice. 

Dr. Thorp. That is right. There is a social problem that is in- 
volved here which requires a great deal more knowledge than we now 
have as to why he loses it. 

Our evidence is not very good, and it is very difficult to secure such 
evidence because usually the case is a composite of m.any factors. 
Whether it is the individual's owti incompetence, or the fact that this 
wasn't a really good business opportunity, or whether it is the behavior 
of his competitors, or perhaps his creditors have been too hard on 
him — one finds so many factors mixed up that from the point of view 
of analysis, it is not a simple problem, and we don't have enough 
detailed information to know the answers in any convincing way as 
to why most people are not able to survive longer. 

The Chairman. Of course, you do know that most of these factors 
which you just mentioned are generally operative. 

Dr. Thorp. That is right. We can list a lot of factors, that is true. 

The Chairman. With some factors no provisions can be made by 
the public. We can't make provision against the incompetence of 
any particular individual. 

Dr. Thorp. I am not so sure. After all, we try to do that through 
our educational system. 

The Chairman. That is merely training competence. If the com- 
petence isn't there in the first place, the education won't bring it about. 

Senator Borah. If we would take care of those where we know how 
they were put out of business, we would do a very good job. 

Senator King. Hope is the mainspring of many of these business 
enterprises, isn't it? That is, a man has hopes he will succeed, and 
enters into a business enterprise which is foredoomed to failure, based 
upon his optimistic attitude. 

Senator Borah. He also has hopes that the Government will en- 
act laws which will enable him to live an honest life himself and make 
the other fellows do the same. 

Senator King. I think that self-government is very important in a 
democratic government. 

Senator Borah. It isn't a democratic government when half a 
dozen men run it. 

Senator King. I haven't discovered that, except in Germany and 
in Russia, and I don't want totalitarian government introduced here. 



CONCENTRATION OF ECONOMIC POWER 
RISE OP CORPORATIONS 



93 



Dr. Thorp. I want to turn now to the different characteristics of 
these enterprises, and first I want to look at them from the point of 
view of their legal form. 

Exhibit No. 54 

NUMBER OF CORPORATIONS 
AND PARTNERSHIPS 



THOUSANDS OF ENTERPRISES 


THOUSANDS OF ENTERPRISES 


3^0 




J rr- 


5bU 


500 







y'T^v^ 




500 




! / 












1/ 






450 


4>0 






J 






Anr\ 




' y^' 






400 


4UL' 




1 / \ 










! f CORPORAr/OA/S 






3^0 




J ! i 




350 




y\ f 




500 


/^ 


^ /\ i 




300 


/ 


1 / V 1 




Z30 
ZOO 




[ /=>Afi{rr^ef?SH/PS 






Z50 

ZOO 




V,- 






1 ' 

! 1 i 
















150 




/ ' 






150 




/ 1 ' 








/ i ^ 






100 




/ i ' 




100 




1 ' i • 




50 




/_j J _ 






50 




/ i 









! 1 1 1 ' 


:,,,,:,,. j ;., , 


. 1 : . 


: • 1 1 






m 



1915 1920 1925 !950 1935 1940 



SOURCE ; BURtAU OF IMTtRNAL BEVENUt 

Note. — Data for this chart are based on the number of tax returns filed with the 
Bureau of Internal Revenue. The year to year variations are not strictly comparable 
in all instances, because of changes in the methods of reporting. Data for partnerships 
in 1917 represent only those partnerships subject to war excess-profits tax. 

I introduce a chart on the number of corporations and partnerships. 

(The chart referred to was marked "Exhibit No. 54" and appears 
on this page. The statistical data on which this chart is based 
are included in the appendix on p. 228.) 



94 CONCENTRATION OF ECONOxMIC POWER 

Dr. Thorp. This is based on the records of the Bureau of Internal 
Revenue. Perhaps I should exphiin one or two things about this 
chart. In the first place, it should be noted that corporations are 
included, regardless of whether they are subsidiaries or not, since 
1934; that in earlier years there were consolidated returns, and, 
therefore, in 1934 what had been 7,000 returns were replaced by 27,000 
returns. That is a modification in the figures. 

Then I should like to point out the fact that of these corporations, 
about 10 percent are inactive. They hav.^ no income whatsoever in 
the 3^ear. That is a fairly constant figure throughout the whole 
period of time — 10 or 11 percent. 

With regard to the partnership figure, this is an interesting illus- 
tration of where perfect statistics may be misleading. These are the 
records as the Bureau of Internal Revenue has them of the partner- 
ships, but in this earlier period only partnerships with incomes of 
$6,000 had to file, and I 

Senator King (interposing). Wfis that gr-oss income or net income? 
You said $6,000. 

Dr. TijoRP. They are domestic partnerships having a net income of 
$6,000 or more without deducting salaries or interest paid to partners. 

In the partnership chart probably one should disregard the figures 
prior to this point, 1924. This reflects changes in the system under 
which the records were collected rather than changes in the trend of 
partnerships. 

Now, as to this growth of corporations, we reach a point of some- 
where around 550,000 corporations at the present time, since 1910 — 
from 1910 to 1930, I should say, corporations have increased by 90 
percent, while the number of firms which I showed you before in- 
creased about 45 percent. The number of corporations has increased 
just about twice as fast as our business population. 

It is important to remember that the corporation population is in 
part affected by the tax structure cind changes in the tax structure. 
Under one revenue act it may be somewhat more desirable to be a 
partnership than a corporation at a certain income level, and vice 
versa. 

Senator King. Of the 500,000, 139-odd thousand showed a deficit, 
did they not? 

Dr. Thorp. That is substantially correct. Over a period of years 
one finds some years in which more corporations made a profit than 
have a deficit, and other years, particularly during the depression, in 
which a high proportion of them show a deficit. 

The Chairman. Dr. Thorp, referring to exhibit No. 54, to what do 
you attribute the very rapid increase in the number of partnerships in 
the period from 1917 to 1920? 

Dr. Thorp. This is a statistical misconception, Senator. These 
are the records of partnerships from the Treasury Department, but 
the conditions of partnerships reporting were so different in 1917 than 
in 1924, that the number of partnerships on their records showed that 
increase. I do not believe that one can regard that as the picture 
at all, and perhaps it would have been better if we had not put it on 
the chart. This should not be taken as a picture of the growth of 
partnerships. 

The Chairman. The internal revenue law has been changed from 
time to time during the period covered by this chart, and those 
changes in the law would necessarily affect the number of returns. 



CONC'ENTKATION OF ECO.NOMIC POWER 95 

Dr. Thorp. That is right. It was not until the middle of the 1920's 
that one could feel certain that all partnerships were reported. 

The Chairman. So that actually tliis chart is not to be interpreted 
&s showing any reasonable accuracy with respect to the relation be- 
tween partnerships and corporations prior to 1920. 

Dr. Thorp. I should say even prior to 1924. 

Mr. Oliphant. From 1925 is your partnership line significant? 

Dr. Thorp. Yes; from 1925 on the partnership line is fairly accurate 
and shows a decrease in the use of the partnership method at the 
same time that the number of corporations was increasing. 

Mr. Oliphant. Did you mean to make any observations on the 
causes of that decrease in relation to the increase of corporations? 

Dr. Thorp. I don't believe I have any observations that would be 
significant. 

Senator King. You woidd know whether Ihe declining line there 
was the rp^ult of partnership for voluntary liquidation or whether 
they ha*^^ merged into corporations. 

Dr. Thorp. I can introduce a little evidence right here that will 
perhaps show what has been happening. We made a study at Dun & 
Bradstreet for the first half of 1936, of 77,000 cases where the owner- 
ship changed in an enterprise. 

In most of those cases the same legal form was continued; in other 
words, if the enterprise had been an individual proprietorship the new 
one was an individual proprietorship with some other individual 
owner; if it had been a partnership the new one was a partnership. 

Nevertlieless, as those 77,000 enterprises went through the process' 
of change, tliis is what happened to the percentage of the total that 
was incorporated: In manufacturing, 23 percent had been corpora- 
tions before the change and 38 percent were corporations afterward. 
In other words, there was a decided movement from proprietorships 
and partnerships to corporations. In wholesaling it was from 22 
percent to 37 percent; in retaihng from 7 percent to 8 percent. Of 
course, in retailing the proprietorship continues to be the dominant 
type of enterprise. 

Senator King. Each of those organizations continued, though, in 
one form or another, did it? 

Dr. Thorp. Yes; each one Of those continued in one form or 
another. 

EXTENT OF CORPORATE ACTIVITY 

Dr. Thorp. In this chart we have endeavored to estimate the im- 
portance of corporate activity by branches of industry in 1937, and I 
must say at once that these are estimates in most cases. We have 
done the best we can and have built up figures which we hope are fairly 
accurate. One might misread this chart. I should like to explain 
that the column entitled "Percent of National Income" is merely 
there to show how important each of these groups is in the national 
income. This is not a column indicating what percentage of the 
national income is done by corporations. Tliis should be read that 
8.9 percent of the national income is attributed to agriculture. 

(The chart referred to was marked "Exhibit No. 55" and appears 
on p. 96.) 

The Chairman. Whether noncorporate or corporate. 



96 



CONCENTRATION OF ECONOMIC POWER 



Dr. Thorp. Whether corporate or noncorporate. It gives one an 
idea of how important are the various segments of the national in- 
come. All manufacturing enterprises, corporate or noncorporate, 
contribute 24 percent of the national income. 

The last column is the significant column. That is the percentage 
of business done by corporations in each one of these industry groups. 
The figure for agriculture is 7 percent. In five groups it runs around 
90 percent or better — mining, the public utilities, manufacturing, 
transportation, and communication. In finance, it is 84 percent. 
In the very important trade group 58 percent of the business is 
handled by corporations. 

Exhibit No. 55 

ir^PORTANCE OF CORPORATE ACTSVITY 

BY BRANCHES OF INDUSTRY, 1937 







PERCENT 


PERCENT OF BUSINESS 


INDUSTRY 




OF 
NATIONAL 


DOME BY CORPORATIONS 
IN EACH 






INCOME 


INDUSTRY 


AGRir.U! TURi^ 


8 9 - 
2,1 
16 


7 


MINING 




ELECTRIC LIGHT AND POWER AND MANUFACTURED 


GAS 


100 


MANUFACTURING 




«0 

2.1 


92 


CONTRACT CONSTRUCTION 




36 


TRANSPORTATION 





7.3 


89 


COMMUNICATION 




13 
125 
93 
13.5 


100 


TRADE 




58 


FINANCE 




84 


GOVERNMENT -INCLUDING WORK RELIEF WAGES 





53 


SERVICE 




119 


30 


MISCFi I ANFOUS 




42 


33 







!OR[IGN AND DOIliS'iC CO 



I suppose I need to meation the part of government business that 
is done by corporations although I don't want to start any discussion 
about it. I might suggest merely, that we do have the corporate 
form with regard to cities and many local governments, and even the 
Federal Government does certain of its work through corporations. 
A rough attempt to estimate the importance of the corporate form, 
as far as government is concerned, places the figure at 58 percent. 

Senator King. Would you include banking, where thej" are operat- 
ing under Federal charters, as Government business, or private? 

Dr. Thorp. If you mean the K. F. C. for example, that is included 
under Government, but of course all corporations in a sense are 
Government instruments in that they are created by the Govern- 
ment. 

Senator King. H. O. L. C. and these other organizations? 

Dr. Thorp. They are part of Government in this picture. 



CONCENTRATION OF ECONOMIC POWER 



97 



Senator King. T. V. A., and corporations of that character? 

Dr. Thorp, Yes. Now, if one tries roughly to arrive at some- 
thing in the form of a total, it is probably somewhere between 60 and 
65 percent of the total volume of business in the country which is 
done by corporations. 

If you drop this Government item and regard only the rest, it 
makes very little difference. It still would be probably somewhere 
between 60 and 65 percent of the total activity. 

SIZE OF ENTERPRISES MEASURED BY EMPLOYEES 

Dr. Thorp. The next aspect of business enterprises wliicli I want 
to discuss is differences with reference to size. 

(The chart referred to was marked "Exhibit No. 56" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 229.) 

Exhibit No. 5G 

DiSTRiBUTlQN OF Ef^PLOYEES ^ EiVlPLOYERS 

BY SIZE OF BUSINESS CONCERN - JULY- DEC.I937 



PtaCENT or TOTAL 



LEGEND 

gm PERCENT OF CMPUnrERJ 

[723 PtOCENT OF EUPIOVECS ON MVBatl. 



I 




SOURCE: SOCIAL SECURITY BOARD 



Dr. Thorp. I am afraid I am going to have to ask you to use your 
imaginations and your understandings to the full to follow this chart. 
This is a chart entitled "Distribution of Employees and Employers, 
by Size of Business Concern." The basic data are from reports by 
employers to the Treasury Department in connection with their 
payments under the Social Security Act. 

Each employer, and for this purpose General Motors or The Great 
Atlantic & Pacific Tea Co. represents one employer, reported for the 
last half of 1937 the total number of names which appeared on his 
pay roll at some time during the 6 months. 

It is important to realize, tlierefore, that these figures are, one 
might say, somewhat padded all the way through. If, for example, 
a firm ordinarily had three employees but one of them had dropped 



g§ CONCENTRATION OF ECONOMIC POWER 

out after 1 month and he had been replaced by another, there would 
liave been four names appearing on the pay roll of that company 
during the 6 months' period, and therefore in our record here it would 
appear as a company witli four employees. 

The only thing one can say is that probably turn-over appears all 
through the record and we just have to make allowances for it. 

This chart covers 1,730,000 employers. It does not include any 
farmers, railroads, nonprofit public services, etc., nor does it include 
the enterprises which had po employees; in this last group there are 
a vast number, both in retail trade and in the yjrofessions. 

Let us look at the extreme left of this exhibit ^ for the moment. 
The numbers at the bottom of the chart refer to the number of names 
reported by the emploj^er. For instance, here we start with the cases 
which reported one employee. The heavy black bar shows what per- 
cent those with one empWee were of all employers; the shaded bar 
next to it shows what percent their employees were of all employees. 

The first solid bar indicates that 25 percent of all employers had 
one employee. Those employers, with three employees or less, con- 
stitute almost one-half of all the employhig enterprises coming under 
the Social vSecurity Act. The exact figure is 50.5 percent. They 
employed 4 percent' of the workers, so that one can get from that 
simple comparison a picture of the degree to which our present econ- 
omy is a small-scale economy in terms of enterprises. 

Senator King. That would mean that more than 50 percent of all 
employers employed three or less. 

Dr. Thorp. Yes. 

Representative Reece. It also indicates the degree to which our 
economy is affected by the welfare of tliosc small employers. 

Dr. Thorp. I think that is correct. 

The Chairman. \Vliat percentage of all omploja^es did you say were 
em.plo.yed by these 50.5 percent of employers? 

33r. Thorp. It is 50.5 percent who have 4 percent of the employees. 

The Chairman. In other words, enterprises employing 1, 2, or 3 
persons, though they constitute slightly more than 50 percent of all 
employers, employ less than 5 percent of all the employees. 

Mr. Oliphant. Does that indicate the extent to which the American 
economy is a small enterprise economy? What is it in total dollar 
volume of business? 

Dr. Thorp. It depends on your measure. This is a measure in 
terms of employees. If you had it in terms of volume of business, the 
results would be somewhat different. If you had it in terms of assets 
you would get another set of results. 

The Chairman. Dr. Thorp, suppose you go to the other end of that 
scale, now, just for the puri)oses of comparison, and give us the appro- 
priate figure with respect to the percentage of employers employing 7. 
<S. and 9 persons, and the percentages of employees whom they em- 
ployed. Do you have that there? 

Dr. Thorp. Yes, I can give that, but I think we had better not 
stop with 7, 8, and 9. This exhibit ^ goes on to still other enterprises. 

The Chairman. Oh, yes. 

Dr. Thorp. In order to get this evidence on the chart, we couldn't 
continue charting them, 9, 10, 11, 12. 

The Chairman. You will make it nnich more striking by coming to 
the other end. 

' Exhibit No. 50, sillpru, \>. '.»7. 
Ubid. 



CO^X'KNTKATION OF ECONOMIC POWER 99 

Dr. Thorp. Once one gets to nine the chart shifts and we group 
the number of employees by tens. One therefore ought to take this 
whole first group and put it into a single column, as the first column 
to go with these nme — in other words, 1 to 9, and 10 to 19. If you 
did that,- our black bar would have to go up to 76. The top of the 
chart is 16, so if you can just visuahze where that black bar would go 
if it went up to 76, j^ou can get this picture. 

Representative Reece. Does the number of employees in those 
small enterprises include the proprietor? 

Dr. Thorp. No, sir; it does not include the proprietor. These are 
employees. The enterprises where there is only an employer, for 
instance, do not appear at all in this record. 

Senator King. It won't include, then, the store conducted by a man 
and his family. , 

Dr. Thorp. That is right. 

Mr. Oliphant. Seventy-six percent of the firms employ what per- 
cent, when you add the figures? 

Dr. Thorp. I will have to have the adding machine work on that. 

Mr. Oliphant. I am sorry; go ahead. 

LARGEST enterprises 

Dr. Thorp. When one reaches the 100 point on the chart, we then 
group by hundreds, then concerns are grouped by thousands, and 
finalty we have the cases of the enterprises which reported more than 
10,000 per company as having been on their pay rolls during the 6 
months' period. 

There are 195 enterprises in this last group with 10,000 employees 
or more. In terms of percentages, that is almost exactly one one- 
hundredth of 1 percent. However, those 195 enterprises, being our 
largest employing enterprises, reported 12.3 percent of all the workers. 

If one goes through the chart looking at it, comparing two sized 
lines, it is som.ewhere in around tliis ''point, perhaps about 20 em- 
ployees, that one notices that the number of employees is beginning 
to get liigher than the number of enterprises in their share of the 
total. Before you reach that point the taller fine is consistently the 
one representing percentage of employers. After that the taller line 
is consistently the one representing employees. 

Dr. Thorp. The figure Mr. Ohphant asked for is 11 percent, the 
76 percent of the employers in this 1 to 9 group employed 11 percent 
of the workers. 

Dr. LuBiN. Half the employers employ 4 percent of the workers. 
Three-fourths of the employers employ how many percent of the 
workers? 

Dr. Thorp. Eleven percent. 

Dr. LuBiN. And one one-hundredth percent of the employers em- 
ploy 12 percent; one one-hundredth percent of the employers of the 
country employ the same number of workers as the other three- 
fourths do. 

Mr. Davis. Those small employers are also providing employment 
for themselves, and had they not done so, they would have had to 
seek employment somewhere else. 

Dr. Thorp. They are providing employment for themselves and 
in many cases for their famihes, without compensation in a formal 



100 CONCENTRATION OF ECONOMIC POWER 

Now we turn to a different measure of size. 

Representative Reece. May I ask if you have any figures to indi- 
cate the number of people employed by enterprises with a specified 
net income, say $100,000 annually? 

Dr. Thorp. We have no such figures. I don't know where we 
could get them, unless we made some deduction from tax records 
which would provide the volume of wages paid. 

Representative Reece. I saw a statement sometime ago to the 
eff"ect that about 75 percent of the employees were employed by con- 
cerns that had a net income. of less than $50,000 a year, and I was 
wondering if that statement had any basis. 

Dr. Thorp. I would be glad to see what could be done along that 
line. I don't have anything that I can introduce. As a matter of 
fact, this whole area is one on which we are working as hard as we 
can at the Department of Commerce, hoping we will be able to give 
you some more amplified and detailed information later. I am sug- 
gesting these today merely because" they are available measures, and 
do indicate the scope of the problem at any rate, but I think our 
measures of it can be greatly improved as we work in the field, and 
we will keep in mind that particular type of measure that you suggest. 

The Cpiairman. The committee will stand in recess until 2 o'clock. 

(Whereupon, at 11:55 a. m., a recess was taken until 2 p. m. of the 
same day.) 

AFTERNOON SESSION 

The committee reconvened at 2 p. m. in the caucus room, Senate 
Ofl[ice Building, on the expiration of the recess. 

TESTIMONY OF WIILARD L. THORP, ADVISER ON ECONOMIC 
STUDIES, DEPARTMENT OF COMMERCE, WASHINGTON, D. C— 
Resumed 

The Chairman. The meeting will please come to order. Dr. 
Thorp, will you resume from where you left off tliis morning? 

Dr. Thorp. This morning we were talking about the character and 
behavior of individual enterprises. We had reached the point, after 
considering their legal structure, of examining them in terms of their 
size, and at the conclusion of the morning session I was discussing 
distribution of employees and employers by size of business concern. 

MEASURES OF CONCENTRATION BY EMPLOYEES 

Dr. Thorp. There are one or two other aspects of exhibit No. 56 
that I would like to point out especially for the committee. If we 
start wdth the largest enterprises and see how far down the line we 
have to go to get half of all the wage earners in the country, which 
come under the Social Security Act, we get down to employers having 
about 250 employees. In other words, the employment picture of the 
country is one in which half the employees are in enterprises where 
there are 250 or more employees. 

If we carry that on to include three-fourths of all the employees, we 
get down to employers having about 40 employees 

The Chairman (interposing). Dr. Thorp, why don't you make now 
the comparison between 50 percent of the employers and 50 percent 
of the employees? Balance one against the other. 



CONCENTRATION OF ECONOMIC POWER IQl 

Dr. Thorp. Fifty percent of the employers are in the group having 
one, two, or three employees. For 50 percent of the employees the 
dividing point is at 250 employees. In other words, 50 percent of 
the employees are in plants where 250 or more are employed, so that 
the two breaking points are three employees or 250 employees. 

The Chairman. What percentage of employers employ 250 per- 
sons or more? It will be just a matter of adding up those percentages, 
and then you will have the complete balance. 

Dr. Thorp. The number of employers in that group is about 1 
percent. 

The Chairman. In other words, nine-tenths of 1 percent of the em- 
ployers employ 50 percent of the employees, but 50 percent of the 
employers employ only 4 percent of the employees. 

Dr. Thorp. That is correct. 

Mr. Oliphant. That high degree of concentration of employment 
as indicated by your figures, as indicated by one one-hundredth of 
1 percent leads me to ask whether you have any figures to indicate 
what that trend has been; whether or not the development of that 
concentration is something that is still proceeding or something that 
has leveled off. 

Dr. Thorp. I am sorry to say that I haven't any figures that will 
show the trend from the point of view of employment. I think this 
is true, that if one thinks about the past, undoubtedly 50 years ago or 
20 years ago there were not these large concerns. 

As to what the trend may be as of the last few years, I am not pre- 
pared to say, although that is one of the things in which we are very- 
much interested and on which we hope to develop information for you. 

Senator King. In order that my memory may be refreshed, these 
figures which you are giving now do not include the farmers and their 
employees. 

Dr. Thorp. That is correct. 

Senator King. There are more than 6,350,000 farms. 

Dr. Thorp. Correct. 

Senator King. To say nothing of the renters, amounting to more 
than one or two miUion. You do not include them and their em- 
ployees? 

Dr. Thorp. I think the renters are included in that sLx-million-odd 
farms. Senator. 

Senator King. No, I think not; and it does not include the railroads. 

Dr. Thorp. It does not include the railroads. 

Senator King. Nor pubUc utilities. 

Dr. Thorp. It includes pubhc utilities. It does not include non- 
profit organizations or pubhc service enterprises. 

Senator King. It doesn't include what might be denominated 
schools, religious organizations or charitable organizations or hospitals, 
and organizations of that character. 

Dr. Thorp. That is right. 

Senator King. And it does not include the several million Federal 
employees. 

Dr. Thorp. No; nor does it include any employers who have no 
employees whatsoever. The total coverage is for 1 ,730,000 enterprises. 

The Chairman. Does that include most but not aU manufacturers? 

Dr. Thorp. That includes all manufacturers. 

Mr. Henderson. How many employees does it include? 



102 CONCENTRATION OF ECONOMIC POWER 

Dr. Thorp. Thirty-seven million wage items, as it is technically- 
called. 

Mr. Arnold. Why are the railroads and public service enterprises 
omitted from the charts? 

Dr. Thorp. These are based on the Social Security records. 

Dr. LuBiN. Is it not true, however, that if you did include the rail- 
roads, the concentration would be even greater at the right of j^our 
chart, because there are relatively few railroads, and something like 
700,000 or a milHon workers? 

Dr. Thorp. Yes; agriculture would fall in over at this end of the 
chart, and the railroads would come in at this end of the chart. 

Representative Reece. Do you have figures showing the distribu- 
tion of employees and employers in some year prior to the depression 
from which we might draw a comparative relationship? 

Dr. Thorp. We have no such figures. 

Representative Reece. Wouldn't that be rather interesting? 

Dr. Thorp. It would be very interesting. I don't know where one 
could get them. The best that one could do would be to study indi- 
vidual plants, and that is inaccurate, of course, because you need to 
know the degree to which plants are grouped into single enterprises. 

Representative Reece. I don't know that it would be possible, 
but were it possible to find from what class of concerns the nine, ten, 
or eleven million unemployed came from that would be very interesting. 

Mr. Henderson. That would be almost impossible. 

Dr. Thorp. I am told that is almost impossible to do. 

Representative Sumners. Doctor, you made a statement this morn- 
ing as to the large amounts of capital required to establish some of 
the new industries. Has any survej^ been made to determine how 
much capital it would require to establish a complete unit of produc- 
tion in those fields? I will illustrate what I mean. You mention one* 
$11,000,000 plant. It might be that there would be probably 25 or 
30, or maybe many units of production. Do I make myself clear? 

Dr. Thorp. Yes. It is true that many plants are organized on 
what might be called a battery basis. 

■Representative Sumners. That is what I am getting at. I don't 
believe, if I may speak for myself, and I think my colleagues would be 
interested, that any more valuable statistics could be furnished than 
those which would be provided ^vdth some notion of what the cost is 
for setting up a complete unit of production. It might be that these 
big amounts of money that are going into one investment wouldn't 
necessarily mean, under proper conditions, that a smaller amount 
might be used for the establishment of a unit that would turn out just 
as good material. 

Dr. Thorp. I think that is all very important to consider. 

Senator King. If I understand your inquiry, let me give an illus- 
tration and see if this falls within that category. A number of years 
ago- — and you are familiar, I think, with it — it was represented that 
by the expenditure of considerable money we could develop gold 
enterprises in Alaska. 

Many of those who had gone there, adventurers and those in good 
faith, had failed because it needed so much for the cyanide process 
and the flotation process and other technological developments. 
Finally an organization was formed and they spent $10,000,000, and 
needed all of that in order to test whether or not you could develop 
those gold properties. We lost every cent of it. Poor men had tried, 



CONCENTRATION OF ECONOMIC POWER 



103 



men with limited means, and they had utterly failed. It needed 
a large expenditure to develop technologically and scientifically, 
the machinery and the plants p,nd processes essential for the reclaim- 
ing of the gold contents and the mineral contents. So many of tlie 
mining enterprises need considerable sums. It U one enterprise. 

SIZE OF ENTERPRISE MEASURED BY ASSETS 

Dr. Thorp. This question of capital leads right into the next 
measure that I want to introduce in connection with the size of cor- 
porations. There are a number of. different ways in which one can 
measure size and the wage earner measure is only one of them. 

If you measure in terms of wage earners, many enterprises which 
we think of as large ones would be small. The ordinary public 
utility, for example, has relatively few wage earners. It is very 
largely a capital using enterprise. Or to take the extreme case, a 
commercial bank has very few employees relative to its capital and its 
assets. 

Now I wish to discuss the problem of size with some evidence as to 
the size of assets. There are a group of charts which I will now present 
based on the data from the Bureau of Internal Kevenue. 

The first chart presents the size of corporations by assets in 1935. 
This is a chart based on all corporations which filed balance sheets 
with the Treasury Department; that is, about 85 percent of all active 
corporations in 1935 filed balance sheets but these . corporations ac- 
counted for at least 98 percent of all compiled receipts. The total w as 
in the neighborhood of 415,000 corporations. 

(The chart referred to was marked "Exhibit No. 57" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 229.) 



Exhibit No. 57 



PERCENT 

601 



I 



I 



MUKU »UR[AV ( 



SIZE OF CORPORATIONS 

BY ASSETS IN 1935 

NO CONSOLIDATED RETURNS 



I HUMBtR Of CORPORATIONS 
I CORPORATE ASSETS 



PERCENT 
60 



50 
40 
30 



M MM Mm ^ B ^ ■ ^ M 



20 



2 50 500 WOO 

fo 10 TO 

500 1.000 5.000 

ASjn CHSU5 - IN TMOUVmCS Of MUARS 



124491— 39— pt. 1- 



104 CONCENTRATION OF ECONOMIC POWER 

Dr. Thorp. Keep in mind that this record is entirely a record of 
corporations. The Social Security data on wage earners included all 
types and fomis of enterprise. 

The figures aren't exactly comparable, but just to remind you, you 
may remember that this morning I pointed out that between 60 and 
65 percent of all our national activity was done by corporations, so 
that to some extent we have to realize that there are assets which do 
not appear here. 

Of course, those enterprises which are not included would all of 
them be added primarily to the small enterprise group; that is, there 
are very few large individual proprietorships or partnerships when 
measured in terms of assets. 

One or two other points with regard to these charts that I should hke 
to point out follow: When we measure in terms of assets, we run into 
all the difTiculties in the field of accounting. We have the problem of 
valuation of these assets, and the inclusion of depreciation or depletion. 
ThC; financial figures are therefore subject to the practices of the 
individual corporation, in preparing its records for fihng with the 
Treasury. 

Also, it is important to realize that in 1935 all corporations, except 
affiliated groups of railroad corporations, filed separate returns, so that 
subsidiaries will appear in this record as separate corporations. That 
is a bias entirely in terms of understating the amount of consolidation. 
To the degree to which it were possible to group these corporations as 
they economically are grouped, we would then get more concentration. 

Now what does the record show? This is perhaps not as significant 
as the next chart which I am going to give, because this includes 
financial enterprises, and assets as held by banks, for example, are 
rather different from assets held by a department store or by a manu- 
facturing enterprise. However, these are all enterprises and here we 
get a picture of all assets — and remember assets means equipment, 
plant, stocks of goods on hand and accounts receivable and the hke. 
In 1935, 55 percent of all corporations had assets of less than $50,000 
and they had 1.4 percent of the assets of all corporations. 

At the other extreme, we get about 780 cases with $50,000,000 of 
assets and over. That is two-tenths of 1 percent of all corporations, 
and they had about 52 percent of the assets. A little more than half 
of the corporations had assets under $50,000 and a httle more than 
half the assets were in the hands of corporations with assets of over 
$50,000,000. It is a picture in which one finds a smaller percentage 
of the corporations in each larger asset group and an increasing 
amount of assets. 

EXCLUSION OF FINANCIAL COMPANIES 

Dr. Thorp. This chart is somewhat deceptive because it includes 
these financial corporations, and so we have had the same chart pre- 
pared excluding all these financial companies. 

(The chart referred to was marked "Exhibit No. 58" and appears 
t)n p. 105. The statistical data on which this chart is based are 
included in the appendix on p. 230.) 

Dr. Thorp. That changes the picture slightly. It changes it to 
show moderately less concentration because the assets held by financial 
companies are especially concentrated. 



CONCENTRATION OF ECONOMIC POWER |95 

Senator King. Pardon me, would either of these charts show the 
insurance companies? 

Dr. Thorp. Yes; the insurance companies would be in this "Exhibit 
No. 57." They are included among the financial institutions. They 
would be excluded from "Exhibit No. 58." 

Senator King. And would you take into account in determining 
the assets of insurance companies the liability which grows out of 
the fact that they have outstanding policies amounting to more than 
68 billion, with obligations of more than 102 billion dollars? 

Dr. Thorp. No; the assets are not net assets. Even the manu- 
facturing company may have bond issues outstanding which represent 
claims against the assets. These are the gross assets as shoAvn on 
the balance sheets, and someone, if you include the stockholders, 
has a claim to all thoso assets. 

Exhibit No. 58 

SIZE OF CORPORATIONS 
BY ASSETS IN 1^35 



percbm;; 



50 
40 
30 
20 

to 



EXaUOING FINANCIAL COMPANIES 
HO CWtfOUDATEO RETURNS 



PtRCefIT 

60 



LCCeND 

^^ NUMBER or RETURNS 
WtM TOTAL ASSETS 



■ fll fll pl _l _l 

? ^4." ^ "?r '?r '%'r 



50 
40 
30 
20 
10 



JOURCC BUREAU or INrCRHAL Revenue 



fOO i.ooo ipoo to.*oo 

ASSET CLASSES- IN TMOUSANOS Of POIXAffS 



5ft«o 

AMO 
OVtH 



Senator King. Of course, there are stockholders in all those cor- 
porations, more than 18,000,000 are there not? 

Dr. Thorp. I don't know the figure. 

Senator King. That is what Berle and Means and other statisticians 
estimate. 

Mr. Davis. May I ask a question? Referring to the exhibit 
giving size of corporations by assets,^ and the exhibit giving the 
employers and employees,^ you explained that aboul half of the total 
employees were employed by corporations employing less than 250 
each, and the other half of those employing more than 250 each. 
Have you any figures giving the relative size in assets ol the corpora- 
tions in the two groups? 

« Exhibit No. 57. supra, p. 103. 
> Exhibit No. 56, supra, p. 87. 



106 



CONCEIV'TRATION OF ECONOMIC POWER 



Dr. Thorp. We have absolutely no figures that permit you to get 
across from wage earner concentration to assets concentration I 
tried to see if we could work out any such comparison and the ditti- 
culty is that it was impossible in the length of time that 1 had to 
break down the Treasury tabulations to correspond with the coverage 
of Social Security. , „ , , . , ,. 

For example, the Treasury records put the railroads and the public 
utilities together in their size classification. Well, now, the pubhc 
•utilities are under Social Security and the raihoads are not, and 
therefore I was not able to make a cross- tabulation. I am quite cer- 
tain that in workmg with the Treasury it would be possible to get some 
such calculation worked out. , . 

Mr. Davis. It seems to me it would be quite illuminative if we could 
know the employment given with the investment of the two classes. 

Dr. Thorp. I think it is possible to make such a calculation. 

ASSETS DISTRIBUTION FOR TYPES OF ECONOMIC ACTIVITY 

Dr. Thor?: In exhibit No. 59 we begin to examine this picture in 
terms of various subdivisions within our economic structure. 

(The charts referred to were marked "Exhibits Nos. 59 and bO 
and appear on pp. 106 and 107. The statistical data on which these 
cljarts are based are included in the appendix on pp. 230 and 231.) 

Exhibit No. 59 

ASSETS OF LARGE CORPORATIONS-'^OOaOOO o^UL/- 

PERCENT OF INDUSTRY TOTAL IN 1935 

NO CONSOLIDATED RETURNS 
10 

TRANSPORTATION AHD OTHER 
PUBUC UTILITIES 

HNANCE 



MANUFACTURING 

MINING AND QUARRYING 

TRADE 

SERVICE 

AGRICULTURE 

CONSTRUCTION 




Dr. Thorp. In this case we have had to define large corporations, 
as those havmg $5,000,000 in assets and over. 

Senator King. $5,000,000? 

Dr. Thorp. $5,000,000 m assets and over. 

The groups are arranged in order. In transportation and other 
public utiUties you get the greatest concentration of assets, and service. 



CONCENTRATION OF ECONOMIC POWER 



107 



agriculture and construction at the other end of the scale measured 
by the assets. In finance 2.6 percent have 78 percent of the assets; 
manufacturing, 1.5 percent having 66 peicent of the assets; mining 
and quarrying, 2.5 percent having 65 percent of the assets; in trade, 
0.5 percent with 35 percent of the assets, and service, agriculture, and 
construction falhng below that. 

Remember, this is a record of corporations. For example, in agri- 
culture there are only seven or eight thousand corporations, so that 
while it is true that among those seven or eight thousand in agriculture 
0.7 percent of them have 28 percent of the assets in existence, the 
figure means very little in terms of agriculture as a whole. However, 
for four groups, at any rate — about 90 percent or more of the activity 
is done by corporations, and therefore one can get a pretty definite 
indication from these figures of the degree of concentration. 

Exhibit No. GO 



ASSETS OF LARGE MANUFACTURING CORPORATIONS OF 
^5,000,000 AND OVER percent of industrv total 1935 

NO CONSOUDATEO RETURNS 



TOBACCO PRODUCTS 

CHEMICALS r ALLIED PBOOUCTS 

RUBBER PRODUCTS 

METAL er METAL PRODUCTS 

MP£R B- PULP PROOOCTS 

FDOOSr KINDRED PRODUCTS 

Sn»»e. CLAY ff GLASS PRODUCT 

PRINTIKG, POBUSMING V ALUfO INDUSTRIES 

TEXTILES V THEIR PRODUCTS 

FOREST PBOOUCTS 

LliJUOR fr BEVERAGES 



] 10 21 


3 « 


PERCEMT Of TOTAL 
3 40 50 60 70 60 90 W 


^1 


I 


- 


^ 


\r 


1 


f" 


qi] 


"T" 


J 1 




r 










1. 




^ 




1 

L 




pill! 


EOeN 







Urn 


1 1 




It 




■ 


r 




z^ 




■■i 






" 




I 


1 BicoawiUfnAstrrt 

1 ^^mtiMta cr coofotumem 




wm 






1 
1 











The Chairman. This chart to which you have just been referring 
■deals only with corporate assets? 

Dr. Thorp. That is correct. 

The Chairman. And you presented a chart earlier in the morning, 
the chart entitled "Importance of Corporate Activity,"^ in which it 
was shown, in the second column, that, in agriculture, corporations 
control only 7 percent of the entire activity, and that, in mining, cor- 
porations control 96 percent. In finance, which is the second figure 
on exhibit No. 59, according to your chart this morning, 84 percent 
of the activity is controlled by corporations. Don't you think it 
might be helpful to tie this chart into the other one and, by indicating 
the percentage opposite each subdivision here, indicate th< percentage 
of the entire activity in that field which is carried on by corp. '"<^ions? 

' See exhibit No. 55, supra, p. 96. 



108 CONCENTRATION OF ECONOMIC POWER 

Dr. Thorp. That would enhance the usefukiess of the chart. 

The Chairman. Suppose you do that, beginiiiHg with transporta- 
tion and other pubhc utilities. 

Dr. Thorp. The grouping is not exactly the same. The industry 
classes in exhibit No. 59^ are those used by the Bureau of Internal 
Revenue and are based on the financial reports submitted by tax- 
paying units, whereas the classification in exhibit No. 55,' showing 
the importance of corporate activity, is based primarily on reports 
to the Bureau of the Census in which companies may be divided 
according to plants or establishments. That means that a corpora- 
tion chiefly engaged in manufacturing which operates a retail store, 
would be wholl}^ a manufacturing concern in the e3^es of the Bureau 
of Internal Revenue, but would be subdivided into the two activities 
by the Census Bureau. With this limitation and some other minor 
differences in mind, the percentages of activity that are accounted 
for by corporations for the industries listed in exhibit No. 59 are: 

P<:TC(nt 

Transportation and other public utilities 92 

Finance . S4 

Manufacturing . 92 

Mining and quarrying 96 

Trade . 58 

Service 30 

Agriculture 7 

Construction 36 

You will note that the only class in exhibit No. 59 showing a per- 
centage different from the "like named" class in exhibit No. 55 is 
Transportation and Other Public Utilities. This class, appearing in 
exhibit No. 59, is a summation of the third, sixth, and seventh branches 
of industrj^ listed in exhibit No. 55. The similarity in the other items 
is due to the smallness of the differences in classification of the items 
going to make up the groups in the two charts. 

These percentage figures, of course, refer to activity while the data 
used in exhibit No. 69 relates to corporate assets. 

Senator King. Before you leave this field, you spoke about the 
corporations engaged in agricultural activities. What particular 
field of agriculture would fall within that classification? 

Dr. Thorp. I think the most important area in which any large 
agricultural corporations appear is in dairying. 

Senator King. Would those factories that slaughter animals and 
dispose of the meat fall within the agricultural classification? 

Dr. Thorp. No; I think meat packing is regarded as manufacturmg. 

Senator King. Would the production of sugar from cane or sugar 
beets fall within your classification of manufacturingr 

Dr. Thorp. The refining of sugar would fall under manufacturing, 
but the actual raising of sugar beets or sugar cane would come down 
in the agricultural classification 

ABfeETS DISTRIBUTION FOR MANUFACTURING SUBDIVISIONS 

Dr. Tforp. Now we turn to exlnbit No. 60 ' which is presented to 
show how varied the picture is if one looks at different divisions within 
ine manufacturing field. 

This is the chart giving the assets of larce manufactujing cor- 
porations, the same corporfl<ioT)^ as were included in the last cha'-t 

» Suiira, p. ]00. 

« P'lll' -v, p. ill".. ' 

• Sup.<. J.. 107 



CONCENTRATION OF ECONOMIC POWER 109 

which we discussed, but broken down by subdivisions for manufac- 
turing. There we find that corporations with $5,000,000 of assets 
and over are of varying importance in different areas within the 
manufacturing group, the order being indicated very clearly from the 
chart — tobacco products; chemicals and alUed products; rubber 
products; metal and metal products; paper and pulp products; food 
and kindred products; stone, clay, and glass products; printing, pub- 
lishing, and allied industries; textiles; forest products; and hquor and 
beverages. 

In the extremes, in tobacco products less than 6 percent of the 
corporations have assets of $5,000,000 and over but tliey have over 
90 percent of the assets; and on the other extreme, in the hquor and 
beverages industry, 1 percent of the corporations fall in this categor}'-, 
and they have 28 percent of the assets. 

I indicated previously that much depended upon the measure one 
used. The fact is, that one needs a number of different measures 
in order to determme size. It is irnportant to keep in mind that 
what is a big unit in one industry might be a small unit in another. 
A big millinery manufacturing enterprise would be much smaller 
than a small steel mill, probably when measured either in terms of 
assets or measured in terms of wage earners. 

LIMITATIONS ON MEASURES OF SIZE 

Dr. Thorp. Now we have certain other tilings to consider if we are 
tr^nlng to do a complete job, and I hope in the course of time we can 
report to the Committee a much fuller analysis of tliis problem of size. 
For example, many of these enterprises are in fact larger than they 
appear. They may have foreign branches, for example; they may 
have such close working relationships with their sources of supply that 
in fact the size is much greater than appears in the formal organization. 
And then there are interlockings of various kinds, financial inter- 
lockings, interlocking directorates, holdmg companies and such, which 
also need to be taken into account if one is to get an accurate measure 
of our large business units. 

On the other hand, I also want to point out that for many purposes 
these large units are not so large from a business standpoint, hi that 
for many purposes they operate on a decentralized basis. For 
example, a large enterprise may have 10 plants scattered around the 
country, and for certain purposes those 10 plants may operate with 
a relative degree of independence. They may have independence 
with regard to their labor policies, or independence with regard to 
the way in which they will distribute their products in that area, 
so that in some cases one may have to modify his analysis of size, 
taking into consideration the fact of decentralized organization. 

Senator King. Moreover, there are many gradations in the activities 
which culminate in the finished product, and each gradation might act^ 
in a decentralized form. 

Dr. Thorp. That is correct. One of the difficulties, of course, 
about measuring size is that if you try to measure in terms of volume 
of sales, the enterprise that is nearest the c^^nsumer will seem to be 
the biggest because it will have piled up all the work done by all the 
enterprises before it, and therefore, it will seem to be a very large 
enterprise, although it may have contributed only a small part of the 
total. 



IIQ COX("EXTUATIOX OF ECONOMIC I'OWEIl 

Any one of the measures tliat is available has its weaknesses, and 
1 think we have to follow them all to understand the problem. 

Senator King. Is it not a fact that in many of the plants, the 
industrial plants, that the finished product is the result of many 
different activities, perhaps as you state, in various communities, 
indeed in various States? 

Dr. Thorp. Oh, yes; we have now a great many highly fabricated 
ize^ where many products are brought together. 

GROWTH OF LARGE ENTERPRISES 

Dr. Ti'ORP. I should like to make a few comments with regard to 
ihe historical development of this situation. Of course much of this 
.-Towth is a matter of hiternal growth in which the corporation over a 
period of time has rehivested and has grown by that method, but there 
were two periods of active consolidation and mergers in the country. 
The first was from 1898 to 1902. John Moody, who wrote a book 
called The Truth About Trusts, listed 3 IS industrial corporations 
which he was able to locate in 1904 which he said had about two-fifths 
of all manufacturing capital at tiiat time. About 30 of them were 
capitalized at more than $50,000,000. 

The Chairman. You mean all manufacturing capital? 

Dr. Thorp. I think he meant all manufacturing capital at that time. 
Of course there is some question as to what capitnlization meant in 
1898 and 1902, particularly as these corporations were incorporated 
with a good deal of water included, and it would be difficult to place 
vahie on them comparable with whatever our current accounting 
practices may be. 

That period of consolidation ended rather suddenly, and from then 
until the twenties, there was no further a[)])reciable development of 
consolidation and merger, but in the twenties there was a ^e^^val. 
I made an elaborate studj'^ of that several years ago for the National 
Bureau of Economic Research. They were reporting on recent 
economic changes to a committee of which Mr. Hoover was chairman. 
At that time I found that in 1922 a little over 300 enterprises had been 
absorbed by other enterprises in the year 1922; that by 1929 the 
number of manufacturing and mining enterprises which disappeared 
through the process of merger and consolidation was 1,245. There 
was an extraordinary expansion in the merger movement during the 
twenties. Those figures are for manufacturing and mining. You 
would find til e same thing in hotels and hospitals and motion-picture 
theaters. It seems to have been a very general phenomenon at that 
time. 

Mr. Oliphant. \Miat were the years covered? 

Dr. Thorp. The years 1922 to 1929, and the lowest was in 1922 
when 309 companies were absorbed; the highest was in 1929 when 
1,245 were absorbed. 

Senator King. Some were liquidated, were they not, voluntarily, 
and some through the courts? What I mean is some of the corpora- 
tions that had existed prior to that time were liquidated. 

Dr. Thorp. Yes; there is a continual process going on. Many of 
the enterprises which were formed in the early period, 1898 to 1902 
period, did not survive. Some of them made three etTorts, were 
organized three times before they finally collapsed, and there were 
quite a number of cases which failed to survive. 



roNCKXTUATlOX ()F i;( OXO.Mir POWKK 11]^ 

Mr. Arnold. These figures were not intended to include bank- 
ruptcies? 

Dr. Thorp. No; these figures do not include bankruptcies. 

Representative Sumners. Did these consolidations result from 
schemes developed by somebody who wanted to sell a lot of stock 
and make money out of it, or was it an economic development from 
a business operating standpouit? 

REASONS FOR CONSOLIDATIONS 

Dr. Thorp. It is hard to be certain aboui motives, but I should 
like to spend a little time on the reasons that the students have found 
to be present, and we can start with that one. I tlunk there is no- 
doubt but that both these periods of mergers were periods in which 
the desire to have new securities made available for flotation has been 
one of the most important existing mxOtives. The promoters of these 
consolidations have frequently been people in the investment bankin^q; 
business, and the result of the consolidation has been new securities 
for flotation. That was very evident through the latter part of the 
twenties. 

Kepresoniativc Sumners. That was for the piuposo of getting a 
conmiodity, to wit, a security, to sell the peop.le. 

Dr. Thorp. Yes. What woidd happen wtniJd be this: It is not very 
good arithmetic, but one would take two corporations. Let's say 
corporation A had a value of 2, an<l corporation B liad ci value of 2. 
You would put those t\vo together and give the new ct^rporation a 
value of 5 on the assumption that it was bigger and more valuable 
and there were econonties which I will discuss in a moment. You 
gave 2 to the owners of the first corporation, you ga^ c 2 to the owners 
of the second corpora tii:ii, and the renuiining 1 you sold ro the 
public. That was the process. 

Of course that leads us into tlie second icasi ii as to whj^ these 
things take place, and that is (he expectation of production and 
marketing economies. It is perfectly possible (iiat when you put 2 
and 2 together, you may get 5, for one reason or another. It may 
be that the larger enterprise will be able to gain in ceitain technological 
wn3'S. My belief is that during the twenties they were particularly 
eager to expand size. ^»^r";mse it was so helpful in mr.rketing. 

You can't aliord a national ladio broadcast if y<^'. uic ' little pro- 
ducer; you can't f>d^'ertise in tlie Saturday EAuiuig Post if >>u twe a 
little producer. Size has certain (iefinite advantages from the stand- 
point of using modern marketirig methods, arul, therefore, that was 
one of the definite considerations. 1 here are nmny others. I think 
over the long run the increase in ^ize is definitely to be attributed 
to certain changes in the economic sy.stem, the kind of products that 
we are producing. You cajr't pioduce automobiles with one or two 
employees; it has to be a fairly good-sized enterprise. The shift from 
household production over to producing in factories for many of our 
common necessities has been charac terized by the growth of large- 
scale enterprises. 

The Chairman. Would it not be warranted to say that practically 
all of the so-called durable-goods industry, wliich was discussed 
yesterday by Dv Lubin, is of necessity carried on by corporations? 



112 CONCENTRATION OF ECONOMIC POWEp 

Dr. Thorp. I think it is certainly true that durable goods tend to 
be large unit products. 

The Chairman. And there has been a change. Senator King 
was speaking about mining in Alaska. Now, when placer mining 
was no longer profitable it became impossible for the individual to 
engage in mining: which had to be done by a large corporation. 

Dr. Thorp. The only comment I would like to make on that is 
that it is not a general rule. Our most concentrated industry here 
is tobacco products, which is hardly a durable goods. Oui- next to 
the bottom is forest products, which comes in the durable-goods 
classification, but perhaps those are exceptions to the rule. 

Senator King. In your survey, did you find that where there were 
mergers, a corporation with two, another with two, and they merged, 
and you stop at five, that a portion of the increased stock was sold 
for the expansion of the united corporations and to increase their 
productivity or enter into wider fields which were germane to or a 
part of the activities of the former two? 

Dr. Thorp. There are a number of cases where a merger is part 
of a general expansion program, where part of new capital may defi- 
nitely go into that expansion program. On the other hand, even 
where that takes place there is usually some reward for the promoters. 

PART PLAYED BY THE SHERMAN ACT 

Dr. Thorp. I should like to introduce one other point, although I 
think in this rambling way I have covered almost everything important. 
I should like to advance the suggestion that the Sherman Act or antitrust 
law is in considerable part responsible for the development of these large 
enterprises. The reason for that is that through the process of inter- 
pretation, we have arrived at a state of law where five enterprises, 
each of which, let's say, represents 10 percent of an industry, cannot 
have r'ollective action with regard to prices or markets or allocation 
of production without running afoul of the antitrust laws. That 
becomes a combination or conspiracy in restraint of trade. If, how- 
ever, those five enterprises should merge into a single enterprise, then 
that single enterprise has no problem of conspiracy or combination; 
it is only a single enterprise. 

Mr. Arnold. I don't think that is the position which the anti- 
trust _divisir?n is taking, and I don't think it is one that xl:<^y are in a 
position to take. We have the identical problem in the Aluminum 
case} 

Mr. Oliphant. Do you know of any combinations or mergers 
dictated solely by the considerations that you enumerate? That 
would be the best way of putting it. 

Mr. Arnold. That is a common interpretation, newspaper iDter- 
pretation of the antitrust law, but without arguing the point, I wish 
to make the record clear that we made no such distinction, and we 
will get a specific decision on that, I think, in the Aluminum case. 

Dr. Thorp. I am merely citing this in terms of business motiva- 
tion, and I am afraid business isn't always motivated in a perfect 
understanding of the meaning of the laws. 

Mr. Arnold. I would question that statement very seriously. 

' U. .9. V. Aluminum Co. of Amtrica. At time of pabllcatlon of this volume In litigation Dbtrlct 
Court, Seventh District of New York. 



CONCENTRATION OF ECONOMIC POWER 113 

Mr. Frank. Isn't it possible, Mr. Arnold, that some lawyers here- 
tofore have given their clients the interpretation of the anti-trust laws 
to which Mr. Thorp refers, and while they may have been in error, 
that, nevertheless, would account for the motivation to which he 
directs attention. I have some reason to believe that there has been 
such advice given by counsel. 

Mr. Davis. Isn't it a fact that Congress undertook to prevent 
these mergers by section 7 of the Clayton Act, enacted in 1914, and 
that after a lapse of a few years, the corporation attorneys advised 
clients how to avoid the application of this statute in the merger by 
acquiring assets instead of capital stock, which is the term designated 
in the act? 

Dr. Tnonr. That is a very important procedure which has per- 
mitted developments which were not intencled. 

Mr. Arnold. Isn't it perfectly true tbat the lack of the application 
of the Sherman Act to new situations has certainly contributed in 
this case rather than the Sherman Act, itself, has. I wouldn't dis- 
agree vv'itb you that, under the "admmistration" of the Sherman Act, 
combinations have actually been encouraged in the past. 

Representative Sumners. I should like to add, until comparatively 
recently. [Laughter.] 

Dr. Thorp. I agree with your amendment, and I wonder if you 
would agree with mine, that where it is not a predominant part in the 
industry, it probably would have been recognized by these business- 
men. Let us say there are five of them, each of whom represents 5 
percent of the industry. If the five of them conspired, that would bo 
contrary to the antitrust law. If their merger did not bring them to 
a monopoly position in the industry, it might be permissible under 
the !aw, 

Mr. Arnold. Or the same way if five of them got together in the 
Appalachian Coal case} I question very much if a distinction can be 
made such as you are now drawing. 

The Citairman. Tliis is a point on which contraiy legal opinions 
might be submitted by different persons. We are just discussing the 
facts. 

Dr. Thorp. I think so. It is certainly one on which I would hesi- 
tate to get into argument. 

Mr. Oliphant. Mr. Thorj) has been good enough to discuss the 
fundamental issue. I would draw Mr. Thorp's attention to a state- 
ment which I tliink might be misinterpreted. I don't think you would 
say, when you instance the exnmpie of autonxuLiles, the necessity for 
<'oncentration, because in the early production of the ai;t. -mobile they 
weren't produced as they are produced now. 

Dr. Thorp. Yes, and in that case I am not talking in terms of con- 
centration in -the sense of the size of the present automobile companies. 
For example, the production of an automobile by its very nature re- 
quires a la -ger scale enterprise than the production of a pair of shoes, 
but you could perfectly well have an economy which happened to 
•evolve in such a way that shoe factories were larger than automobile 
factories. 

Senator King. If I may supplement my friend's statement, many 
oHhe automobile companies along in the twenties and as far back as 

' Avjrjl-irhian Cc»l Inc. v. L''. 5„ 288 U. ?. 344. 



114 CONCENTHATIOX OF ECOXOMK" POWER 

1912 failed, and the automobiles then cost four or five times as much 
as what they cost now under this concentration. 

Representative Sumnebs. Doctor, is it necessary to have a big or- 
ganization in order to finance contact between the place where the 
commodity is produced and the far-flung group of purchasers? Does 
that enter into the development of these big concerns? 

Dr. Thorp. The problem of financing is certainly one of the advan- 
tages of large enterprises. It is possible for them to use different 
methods of raising capital, if that is what you mean. 

PROBLEM OF MARKETING BY SMALL ENTERPRISES 

Representative Sumners. A little concern, for instance, manu- 
facturing hosiery in the South, may make a perfectly good article, but 
the people over the country don't know that that article is produced 
in that community, and that concei'n doesn't have the amount of 
money to let them know that it is produced there. When production 
was primarily to meet local demand, local demand accommodated 
itself to local production. But now since the rapidity of transportation 
and that sort of thing has moved the field of production and consump- 
tion far apart, does -that cut any figuje in the disappearance of the 
small manufacturing concerns, the inability to bridge the distance 
between the place where they produce and the people who wont to 
buy? Have you studied that? 

Dr. Thorp. I don't know that I can give you anj^ factual reply on 
that at the present time. I think it is true that for certain types of 
products we have developed national markets, and one can't operate 
in a national market unless one is of a certain size. Part of one of the 
characteristics of these large enterprises is the fact that they market 
over a larger scale. 

Representative Sumnp.rs. Take production of gasoline, for instance. 
A small gasoUne plant may make good gasoline, but the people don't 
know it is good gasoline. They can't sell it because the people don't 
know it is good gasoline. The result is that they sell to tlio larger 
plants who in turn attach their names to it. Is it possible by standardi- 
zation to make any improvement in that direction, or haven't you 
studied that? 

Dr. Thorp. That is something that rerjuires a gieat deal of study. 
I have had some exposure to the pr(>bleni, particularly in N. R. A., 
and theie are a number of commodities where the establisLment of 
standards and grades might help, where at the present time judgment 
rests almost entirely on advertising. I (]on't think wo have any 
elaborate studies which will defhie the limits or the extent, perhaps 
I should say, to which that might be helpful. 

iSenator King. Judge Sumners, doesn't the question with respect 
to gasoline 

Representative Sumners (interposing). I use that merely to 
illustrate. 

Senator King. ^Vs, but with ies{;cct to that commodity the ques- 
tion of distribution is one of primary importance, is it not? Take 
Texas as an illustration. You produce large quantities of oil, but 
your market is limited if you are limited to the local market so that 
gasoline is pioduced and is shipped to New York and shipped all over 
the Ignited States through pipe lines, through trucks, and railroads. 



CONCExNTUATIOX OF ECONOMIC POWER 115 

A small producer, the man who produces or develops the oil field 
would be unable to find a market other than by selling to some of 
these companies that have arranged for a wide distribution of the 
commodity. 

Representative Sumners. The casual purchaser wouldn't know 
whether this commodity that is offered for sale is a good thing to put 
in his car. But I asked the question whether or not, it might be 
possible to establish standards, and I am using it purely to illustrate, 
of merit for gasoline so that if a small producer should be able to meet 
those standard requirements he could have something to indicate 
to the public that he had produced such an article, and then the 
public might have confidence to use it. I was not making a statement, 
I was making an inquiry. 

Senator Kingi I think the Interior Department has established 
standards with respect to the quality of the gasoline produced in your 
State so that the independent producers find as ready a market when 
they can get to the market as the large producers, because of the 
fine quality of their product. 

CLUSTERS OF LARGE ENTERPRISES 

Dr. Thorp. In considering these larger corporations, it is evident 
from this chart that they appear in different degrees in different 
sections of the economic system. 

I would like to give one other demonstration to show that the 
development is to some extent uneven. This is based upon the 
pioneering work done by Berle and Means in The Modern Corporation 
and Private Property^ In this book they listed the 200 largest 
nonfinancial corporations in the country. You may examine the 
89 corporations which are manufacturing and mining, which one can 
fairly say includes the 89 largest manufacturing and mining enter- 
prises in the country. There is a decided tendency for them to appear 
in groups or in clusters. Twenty out of the eighty-nine are petroleum 
companies, 11 are iron and steel, 4 automobiles, 4 tires, 4 coal, 3 
copper, 3 meat packing, 3 paper, and then there are 12 cases of pairs, 
companies that one would put together, like General Electric and 
Westinghouse, for example. The remaining 21 have no rival, you 
might say, on the list, but most of them can hardly be thought of as 
being dominant in their industry. 

The only ones which I could see in checking over the list which can 
be thought of as standing clearly alone are the Aluminum Corporation 
and the United Shoe Machinery Co. There are certain other cases 
which stand partially alone, as, for instance the Pullman Co., which 
has monopoly of all circumstances under which one wishes to sleep 
on the railroad trains. On the other hand, as far as their manufac- 
turing of railroad equipment is concerned, they are in competition 
with other enterprises. 

Then, of course, there is competition between these various large 
enterprises, in areas not necessarily their primary activity, for in- 
stance General Motors and General Electric both being active in 
the electric refrigeration field. 

The one point T wish to make in citing these cases is merely to 
illustrate the fact that rather than having single large enterprises 



IIQ CONCENTRATION OF ECONOMIC POWER 

whicli have emerged here and there, each one standing more or less 
by itself on its own island, dominating a particular part of the econ- 
omic system, there has been a tendency for the large enterprises to 
emerge in groups or in clusters, so that we have certain industries 
wliich are very clearly industries in which there are a small number 
of large enterprises. I will give some measures of concentration 
when we get to that. At this moment I merely want to emphasize 
the fact that throughout the entire system there seem to be certain 
spots at which the large enterprises have grown, and then of course 
there are a number of other spots where they haven't appeared at all. 

TYPES OF FUNCTIONAL ORGANIZATION 

Dr. Thorp. The next topic which I wanted to discuss, and I think 
perhaps I had better cut my discussion somewhat at this point, has 
to do with looking at these business enterprises from the point of view 
of what they do, a functional classification. 

After all, there are a whole series of jobs to be done from the raw 
material stage to the consumer, and those can be arranged in a num- 
ber of different sorts of patterns. You can have a situation in which 
one enterprise works all the way from the raw material through to 
the consumer, or you can have a situation in which the various steps 
are done by a whole series of separate enterprises. There are a num- 
ber of ways of organizing it, and we haven't any elaborate material 
available at present which will indicate what those patterns are 
exactly. 

We do know the types of organization that there are. The most 
frequent way in which enterprises grow is usually described as hori- 
zontal growth, which means doing more and more of the same thing. 
In other words, you have a given plant of a certain size and you ex- 
pand by building another plant which will do exactly the same tiling. 
That is a very natural form of expansion, that is the kind of enter- 
prise in which you are expert, and therefore when you expand you 
tend to follow your own expertness. Furthermore, it means that it 
may come merely because you are being successful and you have 
to expand your capacity. 

The second type is described as the vertical integration, where 
rather than expanding,doing more and more of the same sort of thing, 
you expand forwards or backwards, back into raw materials or on- 
ward toward the market, and that kind of structure has developed 
in certain industries very considerably. You wall find, for instance, 
very often in the metal industries the expansion has been of the 
vertical sort. On the other hand, in the textile industries, surpris- 
ingly enough, there is a relatively small amount of vertical integra- 
tion. They tend to expand horizontally. And there are rather different 
cases, even within industries. Tin can manufacturers, for instance, 
have never expanded back into either raw tin or steel, while wire 
fence, which is another steel product, is largely produced by integrated 
manufacturers. 

Then there is another type of functional organization which you 
might call diagonal, cases where an enterprise has a single raw mate- 
rial and then expands by different means of using that raw material, 
or where it may sell to a particular market and produce a number 
of varied things which go into that one market. 



CONCENTRATION OF ECONOMIC POWER H'J 

Those three are fairly clear-cut. They have simple and easily under- 
stood relationships, the horizontal, the vertical, and the diagonal cases. 

There is a fourth one that is important, which we just have to call 
the conglomerate, the case where a single enterprise does a number 
of different things. There is usually some explanation for such 
development, although frequently it is pretty much a matter of 
chance. For instance, one of our large marble quarrying companies 
runs a creamery, and on inquiry it merely turned out that when it 
acquired some property for the marble underneath it, there was a 
creamery on the surface of the gromid and it had to keep the creamery 
going. Such unusual combinations occur in a number of cases. 
We have iron and steel companies that operate farms, flour mills, and 
various things just because of the fact that they came with certain 
resources that they have bought. Then there are more and more 
cases where research activity tends to lead into one or another type 
of expansion, the only connection being that these products or pro- 
cesses have emerged from the same research laboratory. 

There are a number of cases where in an effort to sell a seasonal 
product, unrelated things have been brought together in order to 
keep the work force busy throughout the year. 

These cases I have been describing are rather clear-cut instances of 
formal organization. I would like to mention the fact that there 
are certain indirect ways in which functions can expand. For in- 
stance, a manufacturer may do the advertising and become an active 
force in the selling of his product or even go beyond that in the case 
of resale price maintenance, and while he is not vertically integrated, 
and not engaging in retailing, he is carrying on a certain retail function. 
However, I will not take more time in discussing the functional organi- 
zation of enterprises, although it is very important. 

Representative Sumners. Would you mind indicating whether or 
not the disposition to expand laterally, horizontally, affects the 
status of the competitor more — I think i will withdraw the question; 
it will take too much time. 

Dr. Thorp. It sounded as if it were going to be difficult. 

PROBLEMS OF THE INDIVIDUAL BUSINESSMAN 

Dr. Thorp. So far I have been describing enterprises and I should 
like at this point to shift the ground a little to what I think of as a 
more dynamic approach. We have been talking about enterprises in 
a descriptive v/ay. Now, I want to just point out the problems that 
the individual businessman has to face as he runs his business and 
introduce those as indicating something of the actual type of activity, 
the kind of inquiry that the business man has to make. 

In general, I am going to list these problems under four areas: The 
first is the internal operation of his own business, and that is, you 
might say, No. 1 in the businessman's job. Second is the problem 
of guessing about the future. Almost every action that one of these 
businessmen makes involves guessing about the future. In fact 
when he goes into business he is guessing about the future. Every 
time he extends credit he is guessing about the future. Every time 
he makes a purchase of raw materials he is guessing about the future. 

These problems of the future have been sufficiently important so 
that specialized services have developed to help the businessman, 



llg CONCENTKATION OF ECONOMIC I'OWER 

and he in turn tries continually to find ways in which he can get some 
assurance, trying to eliminate, wherever he can, uncertainties that 
may affect him in the future. There are a number of cases where 
the Government, of course, will provide services of one sort or another. 

I tliink, Senator King, you questioned me this morning with regard 
to the question of all these businessmen who were taking advantage 
of their opportunity to lose their money, and it would seem to mc 
at this point worth suggesting that if there were ways in which better 
information about the risks of business and the requirements for 
success in business could be made available, that one might help to 
eliminate somewhat the social cost of those failures. 

Senator King. My recollection is that the Congressman from Texas 
wanted to know whether there v/as any obligation on the part of the 
Government to prevent a man losing his money even if he wanted to. 

Dr, Thorp. The third set of problems that the businessman faces 
arises out of his relationships with other business enterprises. His 
relationships with his suppliers, his customers, transportation, finance 
companies, and those, define to a large extent his success or failure. 

That is where he is eager to have, as far as possible, bargaining 
strength; that is where he is eager as far as possible, to eliminate 
uncertainties; that is where he is eager to get customers who will 
stay with him by one method of persuasion or another, and where 
frequently he actually goes in for vertical integration to eliminate 
some of the uncertainties in his external relationships. 

Finally his big problem is to survive in his own industry in the face 
of his competitors, and when we come to the question of the business- 
man and his competitors, we have come to the next main part of 
what I want to introduce as testimony and that is the discussion of 
industries rather than of individual businessmen. 

Senator King. Of course the question of the survival in the face of 
competition relates to the small manufacturer or the small business- 
man in a little town, two stores or two butchers or "two small enter- 
prises, there is always competition between the two, and there is a 
struggle there for supremacy and for the maintenance against the 
competition of the other, or the others. 

Dr. Thorp. I think there is a problem of survival for the small 
businessman in the city, too, Senator. 

Senator King. Exactly; perhaps greater there than in the small 
community. 

THE MEANING OF "INDUSTRY" 

Dr. Thorp. When we come to the question of industries, first I 
want to raise the question as to what do we mean by an industry, 
and for that I want to illustrate from this chart. 

(The chart referred to was marked "Exhibit No. 61" and appears 
on p. 119.) 

Dr. Thorp. I merely pick the glass industry because I happen to 
have the material available in a recent report from the Tariff Com- 
mission. Any other industry would raise exactly these same problems 
which I am going to point out. 

If we talk about the industry, what do we mean? Here are the 
various possibilities. This census grouping of stone, clay, and glass 
products, they all have a more or less technical relationsliip. If 
we take this group together, we have about 4,500 companies. Per- 



CONCENTRATION OF ECONOMIC POWER Hg 

haps we should hmit it and take the subdivision of glass and glass 
products. If we do, we get down to sometliing like 200 companies. 
If you wish to be a little more exact than that, you have flat glass 
with 36 companies, and if you still wish to be more exact, you get 
down to these subdivisions of the flat glass industry: Sheet glass, 
plate glass, laminated glass, rolled and wire glass, and so forth. 

It is all a matter of what you want to define, and of course that de- 
pends on your problem. For instance, if you are considering a ques- 
tion of a labor regulation of some sort or another, perhaps one of these 
larger groupings' would be the most useful. 

Exhibit No. 61 

THE GLASS INDUSTRY AND ITS SUBDIVISIONS 
19^6 





NUMBER OF PLANTS 


NUMBER OF COMPANIES 


STONE, CLAY AND GLASS PRODUCTS 


5722 


4500 ESTIMATED 


C-,\ ASS AND C-,\ ASS PRODI jr.T.S 


276 


200 


FLAT Gl ASS 


75 


36 


SHFFT Gl ASS 


21 


12 


PI ATF Gl ASS 


II 
9 


5 


1 AMINATFD Gl ASS 


7 


ROI 1 FD AND WIRF Gl ASS 


14. 
4 


10 


ORSrURFD Gl ASS 


4 


COLORED, CATHEDRAL OPALESCENT 






AND ANTIQUF Gl ASS 


9 


7 


Gl ASS Rl Or.KS 


3 


2 


Gl ASS Til F 


4. 


3 






SOURCE: BUREAU OF THE CENSUS 

UNITED STATES TARIFF COMMISSION 







If, however, you are interested in a price problem, obviously you 
want to get down to just as line a measure as possible. There is no 
single correct definition of industry. The only point I want to make 
is that there '•e many different groupings, more elaborate or less 
elaborate as one wishes to make them. 



LACK OF UNIFORM PRODUCTION RATES BY INDUSTRY MEMBERS 

Dr. Thorp, Now we start talldng about industries. This very 
definitely introduces the proposition that within industries there are 
extremely wide variations in the behavior of subdivisions mthin the 
industry. 

For instance, we talk of the construction industry, yet here is the 
picture of residential costruction and non-residential construction 
behaving rather differently. 

124491— 39— pt. 1 9 



120 



CONCENTItATION OF ECONOMIC POWER 



(The chart referred to was marked "Exhibit No. 62" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 231.) 

Dr. Thorp. Here are two kinds of construction, highway construc- 
tion and railway construction. 

(The chart referred to was marked "Exhibit No. 63" and appears 
on p. 121. The statistical data on which this chart is based are 
included in the appendix on p. 232.) 

Dr. Thorp. Just to show how varied the behavior in the parts of an 
industry can be, this is the record of when some of the subdivisions 
of the construction industry reached their peak during the twenties. 
Light and power construction reached its peak in 1924; pubhc schools 

Exhibit No. 62 



NEW PRIVATE RESIDENTIAL AHO NONRESIDENTIAL 
BUILDING ACTIVITY IN THE UNITED STATES 



BILLIONS OF DOLLARS 
5 



I9I5-I93S 



BILLIONS OF DOLLARS 
5 




OaUMS FARM CONSTBUaiON. PUBLIC UTlLin CONSTKUaiOH, W6LIC CONSTWaiON.dMO M/klNTEKAHa AND REPAIRS 
SOURCE: BUREAU OF FOREIGN AND DOMESTIC COMMERCE 



in 1925; residential, non-farm, in 1926; commercial building in 1927; 
street railroads and subways in 1928; factory building in 1929; steam 
railroads in 1930; pubhc buildings in 1931. 

There are eight subdivisions of the construction industry, each 
reaching its peak in a different year between 1924 and 1931. So 
that if one is talking about the construction industry, obviously for 
many problems the discussion has no meaning unless it is broken 
down into more homogeneous parts. 

As further illustrations of this matter of variety within industries, 
this very complicated looking chart is intended to be complicated. 

This chart is "Production of Steel Castings for Nine Plants." The 
production in each plant in June 1937 was taken as 100. The industry 
une is the heavy black line. The lighter lines represent the behavior 



CONCENTRATION OF ECONOMIC POWER 



121 



of production for each of nine plants selected at random. Three 
happen to be large, three midd'e-sized and three small, although 
I can't tell you whicli ones are which. 

(The chart referred to was marked "Exliibit No. 64" and appears 
on p. 122. The statistical data on which this chart is based are 
included in the appendix on p. 232.) 

Dr. Thorp. The significant thing is that in this industry, which we 
talk about as being a single industry and for which the Government 
publishes total statistics in the Survey of Current Business, production 
m one plant was, in 1929, over two and one-half tinies as high as it 
had been in 1927, while in another plant production in 1929 was well 
below its 1927 level. 

Exhibit No. 63 



NEW RAILROAD AND HIGHWAY CONSTRUCTION ACTIVITY 
IN THE UNITED STATES - l^l^-I^^T 



MILLIONS OF DOLLARS 



1600 




! i 


\ 


1400 








/ 


\. 








/ 


\ i 


1200 








y^ 


\ 








/ 


\ 


1000 






/ 


^ 


\ 






/ 




\ ! 


800 






-r-J-A 




\ A ' /^ 






f^H/GHIV/tY 




Vxl/ 


600 
400 
200 




J 






Y 


/ 




,^---^1 


\ i 




-^v 


r 


^^KMUtOAO 


\ ! 















, 








1 



MIUIONS OF DOLLARS 
1600 

1400 



1200 

1000 

800 

600 

400 

200 




1915 1920 1925 !930 

NOTE^ EXCLUOtS ALL MAINTENANCE AND REPAIRS. "HIGHWAY' EXCLLIOES WORK- REL'EF CONSTRUCTION 
SOURCE: BUREAU OF FOREIGN AND DOMESTIC COMMERCE 



1935 



1940 



The point that is significant from this chart is merely the fact that 
there is no single clear-cut pattern for each plant within the industry, 
but the plants in the industry had decidedly varying records. Here 
is a company, for instance, which in 1933 broke far away from the 
rest of the industry and had a 50-percent higher production than in 
1927. The same sort of picture is shown in the chart for "Portland 
Cement Production for Nine Mills." 

(The chart referred to was marked "Exhibit No. 65" and appears 
on p. 123. The statistical data on which this chart is based are 
included in the appendix on p. 233.) 

Dr. Thokp. We think of cement as being an industry in which 
there would not be a very wide variation in production among the 
various groups in the industry, yet some were appreciably below the 
trend for the industry as a whole and some were above. Where these 
lines reach the bottom of the chart it means that that plant was 



122 



CONCENTRATION OF ECONOMIC POWER 



completely out of production at that particular time, so that in these 
years we have certain plants which were completely out of production, 
although certain others were doing fairly well. 

Here is a plant which started out well and then went below the 
general level, but has come ahead and is far above the rest in the 



Exhibit No. 64 



PERCENT 

300 



PRODUCTfON OF STEEL CASTING 
FOR NINE PLANTS 

JUNE EACH YEAR \<)27'\<)JS 
JUNE 1927- lOO 



PERCENT 
300 



Z^O 




1927 1928 I9Z9 1930 1951 19)2 1935 I9H 195? 1956 1957 1958 



BUREAU OF THE CENSUS 



industry in its 1938 record. Again the story is one of differing 
behavior among the members of a single industry. 

Senator King. It depends on local conditions and transportation, 
does it not? Cement might be produced in a place where the cost of 
transporting to the market is very small and there would be a great 



CONCENTRATION OF ECONOMIC POWER 



123 



demand in that particular market at a given time, whereas in other 
sections of the country there would be no particular demand for 
cement products. 

Dr. Thorp. I think there is a great deal to be learned in terms of 
finding out why these different plants behaved so differently. One 



Exhibit No. 65 



PORTLAND CEMENT PRODUCTION 
FOR NINE MILLS 

JUNE EACH YEAR 1925' 1935 
PERCENT JUNE 1^25 ^ lOO PERC ENT 

2501 \ , I \ \ ^ \ ^250 



200 



150 



fOO 



/\ 



V 



X' 



S: 



'A 







200 



50 



100 



50 



1925 1926 1921* 1928 1929 1950 1931 1932 1955 1954 1955 1956 1957 195? 



can think of a good many possible explanations, and it ought to b(; 
possible, by going back to the record, to determine the reason or 
reasons. 

The Chairman. It certainl}^ is clear from the charts you are 
presenting, that in these particular industries there is no common 
pattern wliich each plant follows. 



124 CONCENTRATION OF ECONOMIC POWER 

Dr. Thorp. That is quite correct. The same thing is shown in 
the chart for "Coke Production", where there is perhaps more nearly 
a single pattern for most of the industry, but there is one plant which 
seems to have varied greatly from the general pattern. 

(The chart referred to was marked "Exhibit No. 66" and appears on 
this page. The statistical data on which this chart is based are in- 
cluded in the appendix on p. 233.) 

Exhibit No. 66 

COKE PRODUCTION 
FOR NINE PLANTS 

JUNE EACH YEAR S<^Zy\<)^ 
PERCENT JUNE !92^^IOO PERCENT 

Z50 




200 



50 



\QQ 



50 



1925 1926 1927 1928 1929 1950 1951 1952 1955 1954 1955 195b 1957 1958 

BUREAU Of MIKES 

Representative Sumners. May I ask, have you found anything to 
indicate that the right-hand plant ' going up to 220 may have itself 
very materially determined that some other plant could go down the 
line? You haven't been able to get into that? 

' Exhibit No. 65, supra, p. 123. 



CONCENTRATION OF ECONOMIC POWER 125 

Dr. Thorp. We haven't gotten into that. We are planning to 
make studies of this kind of record, not just for nine plants, but for a 
large number plants, and see what can be learned from the record. 

Representative Sumners (interposing). Its queer behavior looks 
like he had some reason to boost him up. 

Dr. Thorp. I suspect there is some reason, but I am sorry I can't 
tell you what it is. 

Flour production is from the point of view of the industry very 
stable. This heavj^ black line which shows the trend of the total out- 
put of the industry varies only slightly from year to year, and for 
many of the plants there is no great degree of variation from one year 
to another. Nevertheless, there are a couple of cases where the 
variation has been rather extraordinar}'- and nothing like the trend for 
the entire industiy. 

(The chart referred to was marked ''Exhibit No. 67" and appears on 
p. 126. The statistical data on which this -chart is based are in- 
cluded in the appendix on p. 234.) 

The Chairman. Now, j^ou have one in which the variation in 1931 
and 19.32 runs fronj well below 100 to well above 400. 

Dr. Thorp. That is right. I suspect that something happened in 
this plant in 1931 which w^as a temporary situation, as for example, a 
fire or a strike, or something of that sort, so that it is hardly fair to 
compare that year with 1932. It had done pretty well on the whole. 

EMPLOYMENT RECORDS OF INDUSTRY MEMBERS 

Dr. Thorp. Here we have a chart tliat is a little different. These 
otlier charts are production records. This is an employment record. 
Now that you are used to looking at 9 lines, we show you a chart with 
15 lines on it. These are 15 different plants. The lines are not tied 
together at a single point, but the average for 1923 to 1925 is taken at 
100. In the rubber industry, as you can see, the variations have been 
tremendous. 

This one does not have a single central line indicating the average of 
the industry, and I defy anyone to look at that chart as it stands there 
and fill in a line that would be representative of the industry. The 
firms in terms of employment, have shown very wide fluctuations. 
As a matter of fact, the industry level is just below 100 in 1936, the 
last year that is plotted. You can see what happened in the industry 
quite clearly. The indexes for one group of concerns are around 225 
and for another group below 120, rather an extraordinary division 
taking place. 

(The chart refeiTed to was marked "Exhibit No. 68" and appears 
on p. 127. The statistical data on which this chart is based are 
included in the appendix on p. 234.) 

Mr. Henderson. Wouldn't it be true that those below the average 
in 1936 are undoubtedly pretty large producers? 

Dr. Thorp. Inasmuch as the average for the whole is just below 
100, 1 suspect it is not an unreasonable statistical deduction that some 
of the plants down in the lower levels must be larger than some of those 
at high levels, to get an average at that point. 



126 CONCENTRATION OF ECONOMIC POWER 

The Chairman. There arc certainly more plants above the line 
than below. 

Dr. Thorp. Yes; there are more plants above, and these are a good 
deal further above. 

Exhibit No. 67 



PERCENT 



FLOUR PRODUCTION 
FOR NINE MILLS 

JUNE EACH YEAR 1927-1938 
JUNE 1927= 100 



PERCENT 



300 



400 



300 



200 



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500 



400 



300 



200 



100 



1927 1928 1929 1930 1931 

BUREAU OF THE CENSUS 



1932 1933 1934 1935 1936 1937 1938 



Representative Sumners. You could find the same thing among 
farmers and even lawyers and politicians and everj^body. Some 
people get along well and some don't. 

The Chairman. This is interesting from the point of view of em- 
ployment. This purports to indicate the changes in employment, 



CONCENTRATION OF ECONOMIC POWER 



127 



and you have just drawn the deduction that the plants which are 
represented as below the line are large producers; the plants which 
are above the line are small producers. Would it be a justifiable 
deduction that the small producers have had better luck in employ- 
ment than the large producers? 



Exhibit No. 



EMPLOYMENT FOR FIFTEEN PLANTS IN THE 
RUBBER TIRE AND TUBE INDUSTRY 

JUNE EACH YEAR \<^2y\')j6 
INDEX AVERAGE I^Z^-I^Z^^ JOO INDEX 

400 




tfZf '92+ 1925 1926 1927 1928 1929 1930 1951 1952 1953 1954 1955 1956 



SOURCE -BUREAU Of LABOR STATISTICS 



Dr. Thorp. I think that might be a deduction from this chart for 
at least some small producers among tliis particular group of plants. 
1 would need to know more about the operations of these individual 
plants before venturing a definite statement. 



J 28 CONCENTRATION OF ECONOMIC POWER 

Senator King. You are dealing only with rubber? 

Dr. Thorp. This chart refers only to the rubber tire and tube 
industry. 

Senator King. You recall, do you not, that there have been very 
wide fluctuations in the prices of rubber during the past few years? 
There have been strikes in some places, notably Alo-on, Ohio, where 
they practically destroyed the industry, as well as some other places, so 
that those strikes or untoward circumstances would create great 
changes and perhaps the big industry would suffer more than the 
smaller one. 

Dr. Thorp. I had no intention of trying to explain these variations. 
We do hope to derive some useful conclusions from such studies. 
At the moment, I merely wanted to introduce it as raising a question 
of variation within industries. 

Dr. LuEiN. If I might add at that point, before we ever had these 
strikes there was a tendency for certain firms to move plants into 
areas where labor costs were much lower, the result has been that 
some large firms opened plants in Southern areas and in other areas 
with lower labor costs. These new plants increased their output, and 
consequently their employment, much faster of course than was true 
of the same firms in 'their older plants which were already large. In 
other words, shifting business away from the larger to the newer 
plants. 

Actually, however, such movements of tire empiojmient cannot be 
be studied from this particular chart which ends with 19-36 and which 
includes only a sample of firms that have been in operation since 1923 
and have reported employment each year. It shows neither firms 
that disappeared or new establishments that have started since 192.3. 

I cannot identify the individual firms on this chart, for the reports 
are received in confidence. It so happens that both the large increases 
and the large decreases on this particular chart were registered by 
relatively small companies. However, no generalization can be drawn 
from this one chart other than that it illustrates the diversity of move- 
ment among business enterprises. The Bureau of Labor Statistics 
is stud3dng emplo3"ment changes in large and small enterprises on a 
broad scale at present. 

The Chairman. That suggests another question to my mind. Dr. 
Thorp, does this chart purport to indicate that each of these plants 
represented by a separate line is muler separate ownership or coritrol? 
There is nothing to indicate how many of these plants were owned by 
the same large company, for instance. 

Dr. Tpiorp. We have nothing to indicate that, as far as I know. 

Mr. Davis. Dr. Thorp, in some of our studies I think you probably 
find that contracts made by some of the rubber companies with the 
large mail order houses and chains resulted in the large increase of 
their trade, and the relative decrease of some of their competitors? 

Dr. Thorp. I had intended here to introduce a discussion of con- 
flicts which appear in the N. R. A. experience as between groups within 
industries, but I think rather than take any further time on that, if I 
may just file the report of the President's Committee of Industrial 
Analysis which lists a series of conflicts, that will perhaps save time. 
May I just file that for fhe record? 

(The report referred to was marked "Exhibit No. 69" and is included 
in the appendix on p. 235.) 



CONCENTRATION OP ECONOMIC POWER 



129 



SHIFTS IN IMPORTANCE OF INDUSTRIES AND TRADES 

Dr. Thorp. We now come to talking about what has happened to 
certain industries. 

This is a record which shows the leading manufacturing industries 
in 1899 and 1929. The value of product of the manufacturing indus- 
tries of the United States had multiplied about six and a half times 
between those years. The leading industry in 1899 was the iron and 
steel industry, and the^leading industry in 1929 was the mo tor- vehicle 
industry. The value of products of the motor-vehicle industry in 
1929 was about six and a half times that of the iron and steel industry 
in 1899. 

(The chart referred to was marked "Exhibit No. 70" and appears 
on this page.) 

Exhibit No. 70 



LEADING MANUFACTURING INDUSTRIES 

I899ANDI929 



RANK 



INDUSTRY 



VALUE OF PRODUCT 
IN MILLIONS 



RANK 



INDUSTRY 



VALUE OF PRODUCT 
IN MILLIONS 



1 CRUDE IRON AND STEEL AND SHAPES FOR REM F 0*804 

2 WHOLESALE SLAUGHTERING AND MEAT PACK1NG__ 790 

3 FOUNDRY AND MACHINE SHOP PRODUCTS 645 

4 LUMBER AND TIMBER PRODUCTS £67 

5 FLOURING AND GRIST MILL PRODUCTS 561 



6 MENS CLOTHING. 



7 PRINTING AND PUBLISHING, 

8 COTTON GOODS 



9 BOOTS AND SHOES FACTORY 

10 REFINING SUGAR AND MOLASSES_ 



.415 
.347 
.339 

. 261 
241 



1 MOTOR VEHICLES BODIES AND PARTS ?5260 

2 CRUDE IRON AND STEEL AND ROLLED PRODUCTS _ 4137 

3 WHOLESALE SLAUGHTERING AND MEAT PACKING_3435 

4 PRINTING AND PUBLISHING 2760 

5 PETROLEUM REFINING 2645 

6 ELECTRICAL MACHINERY APPARATUS AND SUPPLIES 2301 

7 BREAD AND OTHER BAKERY PRODUCTS 1526 

8 COTTON GOODS 1524 

9 STEAM RAILROAD REPAIR SHOPS 1184 

10 FLOUR AND OTHER GRAIN MILL PRODUCTS.- 1050 



flURtAU Of TrtE ciny.'i 



Dr. Thorp. The interesting thing to note here is that five industries 
appear on both lists: Iron and steel, wholesale slaughtering and meat 
packing, printing and publishing, cotton goods, and flouring and grist 
mill products. On the other hand, we have five new ones in 1929. 
Over the period of 30 years there was a considerable shifting about in 
our whole economic activity. Pai't of it, of course, is due to the shift- 
ing in certain activities from the home. For instance, breo(i and 
bakeries appeared in the 1929 list but not in the list for 1899. There 
is a rather amazing growth in printing and publishing. Of course, the 
outstanding development is in the motor-vehicle industry which did 
not appear at all in 1899, and was the largest producer in 1929. 

For retail trade I have a somewhat different explanation to make. 
This chart is based upon a special study which we made at Dun & 



130 



CONCENTRATION OF ECONOIMIC POWER 



Bradstreet of the retail store population in 32 county-seat towns — 
these are towns averaging five to ten thousand population — in 1915 
and 1935, for diflerent types of stores. Because the grocery stores 
dominated, we had to break the chart at this point, just below 400, or 
the grocery-store chart line would go up much higher. 

(The chart referred to was marked ''Exhibit No. 71" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 235.) 

ExiiiRiT No. 71 

INDEPENDENT RETAIL STORE POPULATION 

1915 md 1935 

32 COUNTY SEAT TOWNS 

H[)MB£K Of STORES '^ 



600 




700 



600 



200 



100 



IPI5-l9i5 WI5-I955 

tionis 

SOURCE. DUM AND BRADSTREET 



100 



I9r5 1935 

MCN't 
ClOTHINC 

sjoati 



)'?I5-I935 I9i5-I9}5 19/'; -1935 
DRY GOOD HARDWARE SHOE 
STORES STORES STORES 



Dr. Thoi{p. In 1915 these towns, scattered all around the country, 
had 671 iiHk'pondent grocery stores. In 1935 they had 898 indepencl- 



CONCENTRATION OF ECONOMIC POWER 131 

ent groceiy stores. Actually, the number of grocery stores had appre- 
ciably increased. The black area at the bottom of each column in- 
dicates the number of grocery stores in existence in 1915 wh^ch still 
survived in 1935. Only 67 of the 671 grocery stores remained in 
1935. 

Now we come to general and department stores. In 20 years the 
number has dropped decidedly, from over 200 to 118. The number of 
drug stores remained almost the same. Men's clothing stores dropped 
from 128 to 87; dry goods stores from 124 to 55; hardware stores de- 
clined from 110 to 80; shoe stores dropped from 88 to 59; women's- 
wear shops increased from 22 to 73. 

It happens that the total number of stores was almost exactly the 
same in 1915 as in 1935. Most of the lines have shown decreases ex- 
cept for groceries, which went up, and for women's wear which in- 
creased more than threefold. 

The changes that took place in the retail industry between 1929 and 
1935 are indicated in the Bureau of Census records. For example, in 
that period of 6 years the number of eating and drinking places in- 
creased about 120,000, filling stations 75,000, and second-hand stores — 
that is one interesting result of the depression — increased by 7,000. 
On the other hand, furniture and household appliance stores decreased 
14,000, and all apparel stores 18,000. 

So 5^ou have within the population rather extraordinary shifts from 
one industry to another, and one type of activity to another. Of 
course, I hardly need to point out that within the enterprise itself 
there are important shifts, that the grocery store has recently been 
adding meat and tobacco products, and now many of the grocery 
stores are carrying standard drug items. 

Here is another kind of shift that appears within industries, that is 
the seasonal variation of business activities. It is very important in 
many industries and raises certain difficult problems of planning, 
financing, and marketing. This chart presents the seasonality of in- 
dustrial operations for nine industries. The cement industry, for ex- 
ample, is one of our highly seasonal industries, showing its peak in the 
summer, while the coal industries show their low point in the summer. 

(The chart referred to was marked "Exhibit No. 72" and appears 
on p. 132. The statistical data on which this chart is based are 
included in the appendix on p. 236.) 

VARIETY OF TRADE PRACTICE PROBLEMS 

Dr. Thorp. Now we come to a problem of other types of varia- 
tions mthin industries which cannot be measured statistically. Those 
are the variations in industries which result from different practices 
and patterns and habits which the industries themselves have devel- 
oped. It is ob^dous that industries will be different because of the 
fact that they have different products and different processes and 
different types of markets. Their histories have also varied, and.it is 
not surprising that the focal point at which their problems appear 
will vary. 

For example, the problem of trade-ins is naturally a problem 
restricted to certain large-scale industries which produce durable 
products. Trade-ins may appear as a major problem in the automo- 
bile industry but they have not as yet appeared as a problem in the 



132 CONCENTRATION OF ECONOMIC POWER 

shoe industry. Design piracy, for instance, necessarily is limited to 
those industries where style changes are important, so design piracy 
is one of the major problems in the women's-wear industry; to the 
best of my knowledge it hasn't yet appeared in the oyster-pacldng 
industry. 

Exhibit No. 72 



INDEX 
140 



SEASOHALfTY OF INDUSTRIAL OPERATIONS 

INDEXES FOR NINE INDUSTRIES 

INDEX 



120 

100 

80 

60 

40 
140 

120 
100 
80 
60 

40 
140 

120 

100 

60 

60 

40 



P/G /RON 



STEEL INGOTS 



COTTON COffSUMPTm 



POOTS AIVD SHOES 





CIGARETTES 



BITUMINOUS COAL 




ANTHRACITE 




CRUDE P£TROL£UM 



120 
100 
80 

60 

40 
140 

120 
100 

80 

60 

AO 



JFMAMJJASOND JFMAMJJASONO v> F M A M J J A S O N D 

i^O'iM.T 0\' G0VCRN0R5 OF FiDfRAL Rc-jERVu S>3TtM 

You get variations in product of the type that I have been describ- 
ing as causing difl'erent focal points for problems. Similar situations 
arise with regard to the kind of customers to whom you sell. For 
instance, the pipe-organ industry wliich sells largely to churches has 
a particular credit problem which makes it a rather different industry 
in many respects from some other industries. 



CONCENTRATION OF ECONOMIC POWER ]^33 

The -problem of price discrimination depends largely on whether 
your customers are more or less the same sort of buyers or whether 
you have large buyers and small buyers. The problem of customer 
classification itself will emerge from the same sort of circumstance. 

Character of the process may affect the kind of problem that the 
industry has. For example, the whisky industry mth its problem of 
aging liquor has certain financial and labeling problems that are not 
present in a perishable-goods industry. The location of the industry 
will define perhaps whether it may have problems of freight classifica- 
tion, basing points, and similar considerations. 

To give a more complete picture of the different points at which 
problems emerge in industries, I want to present a httle experience 
from the N. R. A. record. The N. R. A. succeeded in writing some- 
thing Uke 1,000' different kinds of trade practice provisions, and these 
were related to about 150 different trade practices. This mean's that 
the business community itself, when it came down here to write its 
codes, felt that at certain pomts its competitive problems and its 
problems of adjustment were particularly critical, and of those points 
it asked to have code provisions prepared. 

Senator King. Do you differentiate between the codes which were 
promulgated by the N. R. A. and the trade practices? 

Dr. Thorp. I am now talking about the trade-practice pro\dsions 
which were written in the N. R. A. codes on the assumption that 
those trade-practice provisions are a reflection of the problems which 
each industry felt needed to be dealt with in its code of fair competition. 

Senator King. As I recollect, you had between 500 and 650 codes, 
and I was wondering whether the trade practices were supplementary 
to or part of the codes, or incorporated in the codes. 

Dr. Thorp. They were incorporated within the codes. I think 
this is one of our best sources for indicating the various kinds of 
problems and I would like very briefly to present a list of types of 
trade practice provisions in the codes. There were certain provisions 
relating to production and capacity control; some concerned with 
minimum prices; others having to do with indirect price concessions. 

Now that is very important, because in many industries the problem 
of selling and of price determination, is a focal problem, and was 
concerned with the time of buyer's payments, guarantees, allowances, 
options and similar buyer's privileges; restriction on the supply of 
additional goods; restrictions on services to buyers; restrictions on 
financial assistance to buyers; restrictions on shipment concessions; 
restrictions on commission concessions; restrictions on payments for 
buyers' services; restrictions on accepting competitors' materials 
from buyers; restrictions on the sale of sub-standard or obsolete 
goods; restrictions on concessions beyond agreement; restrictions on 
forms of payment concealing concessions; restrictions on selling 
agreements, invoices, and so forth, concealing concessions; mandatory 
forms of agreement for prevention of concealed concessions; restric- 
tions on granting of concessions to suppliers; and restrictions on the 
acceptance of concessions. 

Now all these represented cases in which industries came to Wash- 
ington and expressed the need to deal with a certain specific situation 
which was the strategic point at which they felt that competition 
needed support or correction. 



134 CO>'CENTKATION OF ECONOMIC POWER 

Senator King. Well, after all, did not those trade practices, and 
the codes, make for monopoly rather than competition? Did they 
not crystaUize at an unjust and too high level the prices which they 
were charging the consumers? Wasn't that the purpose? I wouldn't 
have gone into this, except for my interpretation of your remarks. 

Dr. Thorp. I hope you will just interpret my remarks as indicating 
the points at which industry felt that its problem existed, the sort of 
situation in which it wanted assistance from the Government, and 
my intention in putting this in is to show the variety rather than 
intent. 

Senator King. It w^anted to be freed from antitrust prosecution, or 
the charge that they had violated the letter and spirit of the Federal 
Trade Commission Act. 

Dr. Thorp. On nearly all of these points, any agreement on the 
part of the industry to deal with it would be a violation of the anti- 
trust laws had there not been the exemption provided by the N. R. A. 

Mr. Arnold. May I just, for the sake of the record add a word, 
that according to the antitrust laws as I see them, had the agreement 
been consistent with efficient or orderly marketing, it might con- 
ceivably have been held reasonable. In other words, I wouldn't 
like the record to show that these agreements would necessarily be 
in violation. I don't think you mean they would. 

Dr. Thorp. No; I think that is a very correct addition. Then 
there was a series of provisions designed to preserve or modify channels 
of distribution, another to preserve or modify geographical rela- 
tionship 

Representative Sumners (interposing). What does "modify geo- 
graphical relationships" mean to somebody doing business? "WTiat 
would that be? 

Dr. Thorp. That has to do with cases in which there may be price 
structures in which certain regions are established. 

Representative Sumners. You mean somebody is going to trade 
in one region, and somebody else in another region? 

Dr. Thorp. One case of this type would be to require that people 
selling beyond the Rocky Mountains shall have a certain relationship 
in their price structure to the price at which they sell in the East. 
There are a number of different ways in which the codes were used in 
the hope of improving the position of this or that geographical group. 

Representative Sumners. W-e can ask so nestions later about 

that, can't we? 

Dr. Thorp. Yes, surely. Standardization, mplification, and label- 
ing; limiting coercive and predatory devices; /mi ting deception and 
misrepresentation; regulating bidding and awarding practices. 

Mr. Chairman, I might submit this list rather than taking your 
time reading it, and it could go in the record. . 

The Chairman. That Nvill be quite acceptablt and it is so ordered. 

(The list referred to "Analysis of Trade Practice Provisions in 
N, R. A. Codes" was marked "'Exhibit No. 73" and is included in the 
appendix on p. 236.) 



CONCENTRATION OF ECONOMIC POWER ]^35 

NRA CODES ILLUSTRATE DIFFERENCES IN PROBLEMS 

Dr. Thorp. To make certain this point is clear, I would like to 
take the first 10 codes and in 2 minutes' time, if I can do it, indicate 
the difi"erent points at which these industries seem to feel that their 
problem appears. 

Senator King. May I inquire, you are not presenting this, are you, 
and I am not criticizino; you if you are, for the purpose of urging or 
recommending or having this committee approve of or recommend 
the restoration of the codes, or eomething similar to them, in order to 
avoid the antitrust laws or the Federal Trade Commission Act? 

Dr. Thorp. Senator, I am introducing tliis just as the best evidence 
that I know in brief space to show how difierent the industries are, 
how different their problems may be. 

The Chairman. And this is merely a list of the problems as devel- 
oped by industry itself, and not by you. 

Dr. Thorp. That is correct. This is an analysis from the codes. 

I take the first 10 for this reason. After that patterns began to 
develop and industries began to follow other industries. 

The Chairman. In other words, you are not trying to develop any 
state of opinion with respect to the desirability of any particular 
procedure toward these problems; you are merely analyzing the 
problems. 

Dr. Thorp. That is correct. I think this indicates what industry 
thought was the problem, at any rate. 

In the first code, the cotton textile code, the heart of the code so 
far as trade practices was concerned was restricting machinery opera- 
tion to two shifts. The cotton textile industry evidently felt that its 
problem was essentially centered around the use of the third shift. 

The shipbuilding and repairs industry chose to outlaw sales below 
reasonable cost, rebates, discounts, service, and other things which 
might nullify the effort. In other words, its code centered around 
the price problem. 

The wool textile code also had the shift problem. 

Representative Sumners. How would you get at whether some- 
body was selhng below a reasonable price? 

Dr. Thorp. That alwaj^s was one of the problems. I think it 
would be appropriate to ask ^Ir. Henderson that. 

Representative Sumners. I will ask Mr. Henderson that. 

Dr. Thorp. The electrical manufacturing industry code had a much 
more elaborate problem of control over the merchandising activities 
of its members, proscribing sales below cost, detailing the accounting 
methods to be used, fashioning an elaborate price filing system. 

The coat and suit industry manifested an intense concern over 
high-pressure production methods, and used machine-hour limitatidijs. 
though later they came in for additional limitations on style pirac)^. ' 

The lace industry left the problem of fair-trade practices for later 
consideration. 

The seventh code, however, the corset and brassiere code, fore- 
shadowed N. R. A.'s eventual large-scale development of trade prac- 
tice regulation, because it went in for selling below cost, advertising 
allowances, supplying advertising programs, free demonstrations, de- 
livery charges, returned merchandise, credit on worn garments, dis- 
counts and terpis, rebates, extra datings, P. M.'s — P. M.'s are cases 

124491— 39— pt. 1 10 



Y^Q CONCENTRATION OF ECONOMIC POWER 

in which the manufacturer gives bonuses to sales people who sell his 
products, sales people in the retail store — merchandise exchange and 
consignment, standard containers, standard cost systems. All this 
just had to do with Division A of the industry, those selling to resellers, 
and they had an entirely separate and quite as long a list of rules for 
those manufacturing for stock. . , • , 

Then the legitimate, full-length dramatic and theatrical mdustry 
was apparently not even aware of the trade practices of its predecessors, 
because it was concerned with problems such as booking agreements, 
offices, contracts, ticket scalpers, and standard forms of contractmg. 

The lumber and timber products industry, which struggled not only 
in its initial code but for 2 years to deal with is problems under N. R. A. 
went in for allocation of production quotas, the establishment of mini- 
mum prices and a whole series of supporting provisions with regard to 

prices. , ,11 

Finally came the petroleum industry, whose code had an even more 
comprehensive program of distribution and sales control. 

There you have the first 10 industries which came into the N. R. A. 
with such different problems and with concern about such different 
aspects of the total activity that I thmk it does demonstrate the fact 
that we have to think about these industries in considerable measure 
in terms of their variety rather than in terms of their similarity. 

MEASURES OF CONCENTRATION 

Dr. Thorp. Now I come to the question of concentration in indus- 
tries. That is different from the problem of size. It is essentially a 
problem in terms of individual products. One can have a large enter- 
prise which may not be important in any industry or in any product if 
Its activities are scattered, widely. On the other hand a very small 
enterprise may be the dominant one for some individual product, so 
that it is important. As one thinks about the problem of concentra- 
tion, and by that I mean influence or control over the production and 
marketing of the particular product, it is important to reahze that that 
is not identical with size. .... ,, 

Of course, it is true that in many of our large industries you can t 
have concentration unless you have size. But 1 do want to emphasize 
the point that it is perfectly possible and probably true in many cases 
that we have small enterprises whose position in their own market is 
stronger than that of many of the larger enterprises in their market. 
Obviously we have a group of cases in the patents field where, by 
definition and with Government aid, you have complete dominance of 
a particular product by the holder of the patent, if it happens not to 
have been licensed so that others can produce it. In that case your 
single enterprise is the sole producer as a result of its patent right. 

We have by no means completed our study of this problem of the 
degree of concentration. For the purpose of indicating something 
about the kind of problem it is, I have gathered together from various 
Government sources the measurements for a number of particular 
products. Again let me emphasize the fact of the importance of 
measuring this by products. , •„ • .1 a ^- tu^ 

The figures which I am going to read will give tlie product, tne 
number of companies which produce a given percentage of the output, 
and then the year and the Government authority. These are arranged 
alphabetically. 



CONCENTRATION OF ECONOMIC POWER ;[37 

We start with virgin aluminum, one company, 100 percent of the 
output, 1937, authority, Federal Trade Commission. 

Automobiles, three companies, 86 percent of the output, 1937, 
Department of Commerce. 

Beef products, two companies, 47 percent of the output, 1935, 
Federal Trade Commission. 

Bread and other baker}^ products, tiu'ee companies, 20 percent of 
the output, about 1934, Federal Trade Commission. 

Cans, three companies, 90 percent bf the output. This is a recent 
figure; I don't know the exact year. Federal Trade Commission. 

Senator King. Is that the American Can Co ? 

Dr. Thoep. That might be one of the companies. The Federal 
Trade Commission did not supply me with the names of the individual 
companies. 

The cement industry, five companies, 40 percent of the output, 
1931, Federal Trade Commission. 

Cigarettes, three companies, 80 percent of the output, 1934, Federal 
Trade Commission. 

Coal (bituminous), four companies, 10 percent of the output, 1932, 
Bureau of Mines. 

Copper, four companies, 78 percent of the output, 1935, Bureau 
of Mmes 

Corn binders. That happens to be an agricidtural implement. 
Four companies, 100 percent of the output, 1936, Federal Trade 
Commission. 

Corn planters (perhaps that should have come first), six companies, 
91 percent of the output, 1936, Federal Trade Commission. 

Flour, three companies, 29 percent of the output, 1934-35, Federal 
Trade Commission. 

Plate glass, two companies, 95 percent of the output, 1935, Tariff 
Commission. 

Safety glass, two companies, 90 percent of the output, 1935, Tariff 
Commission. 

Iron ore, four companies, 64 percent of the output, 1935, Bureau of 
Mines. 

Oil wells, four companies, 20 percent of the output, 1935, Bureau of 
Mines. 

Steel, three companies — this is a measure of capacity rather than 
production— 60.5 percent, 19^5, Tariff Commission. 

Whisky, four companies, 58 percent, for the year September 1937 
to August 1938, Federal Alcohol Administration. 

Women's clothing, four companies, 2 percent of the output, 1935, 
Bureau of the Census. 

Wood pulp, four companies, 35 percent of the output, 1935, Tariff 
Commission. 

Zinc, four companies, 43 percent of the output, 1935, Bureau of 
Mines. 

These happen to be figures that were available, and I introduce 
them to show first the variety in the record, running all the way from 
100 percent down to 2 percent, a number of cases in the 30's, 40's, 
50's, and 60's. I think that is one important thing to realize. 

A second important thing to realize is that there are a number of 
industries in which we have several large enterprises in what might be 
described as a dominant position. I spoke somewhat earlier about 



138 



CONCENTRATION OF ECONOMIC POWER 



the fact that it seemed to be true that the large enterprises had emerged 
in clusters, It is not so much a matter — as a general matter at any 
rate it doesn't seem to be true^of one enterprise dominating the pic- 
ture, but rather that there are several large enterprises. 

Of course, that changes the whole competitive situation as one en- 
visages it, because in a situation with several large enterprises the 
action of any one is a matter of extreme importance, and afl'ects the 
whole market situation and permits certain further concentrations, of 
which I am going to speak in a moment. 

EXTENT OF CHAIN ORGANIZATIONS 

Dr. Thorp. It is necessary, now, to carry this picture on to retail 
trade. So far as retail trade is concerned, the general picture of devel- 
opment of chain stores is that in 1935 we had slightly over 6,000 chains 
in the United States with about 140,000 stores. They did 22 percent 
of the total volume of business. I have in this chart the volume of 
busmess jdone by chains in certain of the more important industries. 

(The chart referred to was marked "Exhibit No. 74" and appears 
oil this page.) 

Exhibit No. 74 

IMPORTANCE OF CHAIN STORE SALES 

BY SELECTED TYPES OF OUTLETS, 1^35 



KIND OF BUSINESS 


TOTAL SALES 
(IN MILLIONS) 


PERCENTAGE OF SALES 
MADE BY CHAINS 


VARIFTY STORFS 


$781 




90.8 


SHOF STORFS 


511 
2,203 




50.0 


GROr.FRY STORFS 


382 


nRUr, STORFS WITH FOUNTAIN 


950 




28 8 


RESTAURANTS AND EATING PLACES 


1,667 




14.5 


HARDWARE STORES i/ IMPLEMENT DEALERS 


759 




4.3 


HRINKING PI ArFS 


724 




0.1 







Dr. Thorp. The industry in which the chains do the largest volume 
of activity is variety stores, more usually cailed the 5-and-lO-cent 
stores, where they do about 90 percent. Next come shoe stores, 50 
percent; grocery stores, 38 percent; drug stores and fountains, 28 per- 
cent — varying degrees of chain operation. 

Representative Reece. Do variety stores include such stores of 
which J. C. Penney, for instance, is representative? 



CONCENTRATION OF ECONOMIC POWER 139 

Dr. Thorp. No; I believe J. C. Penney would be included in general 
merchandise stores. The variety group would include such stores as 
F. W. Woolworth, S. S. Kresge Co., and G. C. Murphy Co. 

Senator King. How do you differentiate between the variety and 
the chain, if you do differentiate? 

Dr. Thorp. Variety is a definition like shoe or grocery, so that 
the other 10 percent would be independent, single mdependent variety 
stores, rather than chain stores. 

SUPPLEMENTAL FORMS OF CONCENTRATION 

Dr. Thorp. In considering the measures on cpncentration it is 
necessary to realize that there are various other elements in the 
economic system, which may reshape and interrelate the single enter- 
prises which I have been talking about, certain relationships which 
may be regarded as additional or alternative forms of concentration. 

(Representative Sumners now presiding.) 

For example, there are various financial interlocking relationships, 
spheres of interest, stock ownership, interlocking directorates and such 
things which complicate the problem of concentration. 

Beyond that there are a number of ways in which enterprises act 
as though they were integrated for certain functions. As an illustra- 
tion, consider the voluntary group of retailers. A voluntary group 
of retailers is a group in which each store continues its independent 
existence, but purchases through a central agency, so that from the 
point of view of purchasing they have collective action. They pur- 
chase more or less as a chain would purchase, but from the point of 
view of merchandising they operate individually. So that we have 
there a partial kind of concentration. 

There are, according to an estimate made by the American Institute 
of Food Distribution in May 1936, 809 of these voluntary cooperative 
groups with 110,000 retailer members, and they claim that they have 
more members at the present time than the chain stores have outlets. 

A third form of concentration for the purpose of dealing with 
specific functions is the trade associations. There are approximately 
7,800 trade associations in the United States, 1,800 of which are 
national, 6,000 State and local groups, that figure not including cham- 
bers of commerce. It includes only organizations by industries or 
trade. 

In those cases you have organizations which are acting for the 
industry with respect to certain functions. It may be research. It 
may be that they run a single research organization for the entire 
industry. In that way, therefore, you get collective action at that 
point. 

It may be advertising or it may be the collection of statistics, or an 
analysis of the current business situation in the industry. 

On the point of trade associations, I merely wish to raise it because 
we hope to have a great deal more information available in the De- 
partment of Commerce shortly. 

Senator King. You haven't indicated the number of constituent 
parts of the trade associlations or units within each or within all of 
these trade associations. 

Dr. Thorp. I am not able to do that now, although I hope to be 
able to do it at a later time. 



140 CONCENTRATION OF ECONOMIC POWER 

Senator King. It would run up into the tens of thousands, would 
it not? 

Dr. Thorp. I think it would be true to say that there are more 
members of trade associations than there are manufacturers, because 
many of them belong to several trade associations. 

COMBINATIONS AND CONSPIRACIES IN RESTRAINT OF TRADE 

Dr. Thorp. The fourth point that must be made has to do with 
r(;gard to forms of concentration which emerge through agreements 
and through unlawful combinations. There is no way, of course, in 
which one can measure that particular thing. How much actual 
conspiracy, combinations in retraint of trade, there is in this country 
is something about which I, at least, would not be in a position to make 
any estimate. It is possible to say that it exists, and I do want to 
present an indication of the forms which it seems to take. 

Mr. E. B. George made a study of recent complaints which had 
been made by the Federal Trade Commission and the Department 
of Justice with regard to such violations of the Sherman Act, and 
I just wish to summarize briefly the kinds of situations which were 
found to exist. 

Senator King. Was he a representative of the Department of 
Justice or the Department of Commerce, or the Federal Trade 
Commission? 

Dr. Thorp. Mr. George is associated with Dun & Bradstroet. This 
was published in an article in Dun's Review. It is based on the official 
records of the complaints made, which are generally available. Three 
of the complaints had to do with labor coercion; they might be 
roughly described as racketeering cases which come under the anti- 
trust laws. 

I am going to talk here about the kind of complaint which appeared 
ill 56 cases. Thirty-three of the complaints were in the field of price 
control; 26 cases where manufacturers had established some form of 
price control, 5 where distributors had established some form of price 
control, and 2 where manufacturers and distributors together had 
established some form of price control. 

Twenty-seven had to do with the control of distribution channels, 
wliich has come to be one of the essential issues with regard to the 
operation of business. There were 6 cases where manufacturers were 
in agreement mth regard to controlling distribution channels, 5 where 
individual manufacturers M-ere trying to do it, 2 where manufacturers 
were applying pressure on other manufacturers, 10 where distributors 
were in the combination, and 4 where manufacturers and distributors 
were in it together. 

Senator King. Were all these complaints made to the Federal Trade 
Commission? 

Dr. Thorp. These were complaints issued by the Federal Trade 
Commission or the Department of Justice. There were three cases 
that might be regarded as special cases. One had to do with the 
development of special brands in order to obtain exclusive control; one 
had to do with regard to controlling the available locations for doing 
this particular activity, and one had to do with a group of whole- 
salers who were in combination trying to represent themselves as 
manufacturers. 



CON'CENTKATION OF ECONOMIC POWER 141 

I introduce this into the record merel;^ because it is the only way 
I know, and the only possible way in which one can indicate the fact, 
that there is in our system some degree of combination which is going 
on which would fall in the category of violations of the anti-trust laws 
as they now exist. 

Senator King. Were any of those complaints predicted upon viola- 
tion of the Robinson-Pa tman Act or the Miller-Tydings Act? 

Dr. Thorp. No; those were not included. I shall now briefly pre- 
sent some charts which indicate a difi'erent aspect of this situation. 

INTER-INDUSTRY COMPETITION 

Dr. Thorp. Here we have the fact that industries are competing 
with each other, and, therefore, the measurement of concentration in 
a particular industry does not show the whole picture. One must take 
into account the fact that competition is continually going on as 
between industries. 

Exhibit No. 75 



PRODUCTION OF WAGONS, BUGGIES, PASSENGER CARS 
AND TRUCKS, I^JOO-I^^T 




W5 f9iO 

SOURCE: BU^^EAU OF THE CENSUS 

BUfitL-M OF FOREIGN AND DOMESTIC COMMERCE 
AUTOMOBILE MANUFACTURERS ASSOCrATION 



1940 



The next chart shows what happened as between vaious types of 
transportation, the buggies and pubhc conveyances (these public con- 
veyances are horse-drawn public conveyances) and the wagon in- 
dustry, passenger car industry, and the truck industry. I will not 
elaborate on it except as an indication of various competing groups 
and what one industry may do to another industry. 

(The chart referred to was marked "Exhibit No. 75" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 237.) 



142 



CONCENTRATION OF ECONO.MIC POWER 



Dr. Thorp. Here are various fuels as shown in this chart, "produc- 
tion of fuels." The dark line is bituniinous coal; the dashed line is 
anthracite; the petroleum industry is the one which comes up so 
rapidly here, dotted; the natural gas industry is the dot-and-dash line. 

These are a few industries which are in fairly active competition 
with each other. 

(The chart referred to was marked "Exhibit No. 76" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 238.) 

Dr. Thorp. There are various sources of sugar. The top line rep- 
resents sugar shipments to the continental United States, or imports 
of sugar; this middle line represents the cane-sugar production, and 
the dotted line is our beet-sugar production. 

Exhibit No. 76 



PRODUCTJON OF FUELS 
1870-1937 




1870 1875 l«80 

SOURCE: BUREAU OF MINES 



«« 1895 l«0 1905 1910 1915 IW 1925 "W 'W 



I think it is particularly interesting to note that apparently for a 
period of time the domestic cane-sugar-production industry- was losing 
ground — from somewhere around 1905 until 1926. The more recent 
period shows a decided advance in cane sugar production, but not so 
much at the expense of the beet-sugar industry as at the expense of 
sugar imports. The industry picture is a composite of these groups 
which are basically diflerent groups, these being foreign enterprises, 
and cane sugar and beet sugar being produced in difierent sections of 
the country and by difl'erent processes. 

(The chart referred to. was marked "Exhibit No. 77" and appears 
on p. 143. The statisticiJ data on which this chart is based are 
included in the appendix on p. 240.) 



CONCENTRATION OF ECONOMIC POWER 



143 



Senator King. The imports do not include the importation of sugar 
from Puerto Rico or the Virgin Islands, from territory under the 
jurisdiction of the United States. They ought not to be classified, 
it seems to me, as imports. 

Dr. Thorp. On this chart those are included as part of the imports. 
These are sugar shipments to the continental United States. 

(Senator O'Mahoney resumed the chair.) 

The Chairman. That was called the oflishore sugar? 

Dr. Thorp. That is right. 

Exhibit No. 77 



PRODUCTION AND IMPORTS OF SUGAR 



THOUSANDS OF SHORT TONS 



I870-I9)T 



THOUSANDS OF SHORT TONS 



8,000 
b.OOO 
4.000 












; i 






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8.000 
6.000 
4.,000 














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SUGAR SHIPMENTS T 
CONTINENTAL U S 


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1870 1875 1880 1885 1890 1895 

SOURCE; BUREAU OF AGRICULTURAL ECONOMICS 



1905 1910 I9r5 



Here is a further chart showing various textile fibers, in which we 
have cotton, wool, silk, and rayon, with decided variations in their 
records, the extraordinary thing being the way in wliich rayon has 
moved up and the fact that in recent years there has been a decided 
shift in the trend of the silk industry.^ 

Of course, all these are more or less in competition with each other, 
and, therefore, if one were to talk about concentration in control in 
anj^ particular one of them, there still remains a problem of competi- 
tion with the others as part of the picture. 

As far as industries are concerned, therefore, the sort of picture 
which I hope I have presented has been one which shows the difficulty 
of defining an industry, wliich shows that as far as industries are con- 
cerned, we have in this country vaiying degrees of concentration, but 
there are a considerable number of situations in which a small number 
of large companies dominate the mdustry, and that the patterns 
behavior of industries are extremely varied. 

' Pee also pp.' 39 and 40, supra. 



144 CONCENTRATION OF P^CONOMIC POWER 

(The chart referred to was marked "Exhibit No. 78" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 241.) 

Senator King. When you use the word "dominate," do you mean 
in price or in quantity, or in determining the policy of the entire 
industry? 

Dr. Thorp. The measures which I am mtroducing are measures in 
terms of share of total production. One would have to go a good deal 
further to Imow the degree to which any one or several companies 
dominated the price picture or the marketing structure. 

ExHiBrr No. 78 



TEXTILE flBRE CONSUMPTION 
BY U. S. MANUFACTURERS {8TO-I937 






i^^^p^S 



JpouiiisJ 



ACTUAL IWOL, CON'.unf^OH 



i"^^/!!Z 




GENERAL SHIFTS IN THE ECONOMY 

Dr. Thorp. There are certain broad influences that need to be kept 
in mind as one thinks about our economic structure. There are basic 
changes, there are thuigs wliich require continual adjustment and winch 
explain a good many of the thmgs which have happened. 

I shall not take the time to elaborate on them, but rather to present 
them and perhaps at some later time they can be analyzed more fully. 

Here is a chart wliich shows the percentage distribution of gainfully 
occupied persons 16 years of age and over in the United States. Of 
course, the striking thing is the fact that we have changed from a 
country where 53 percent of the people were employed in agricukure 
to a country where 21 percent are employed in agriculture. That is 
the outstanding thing that appears in that chart. The absorption 
has, of course, appeared in a number of different points scattered 
through all the other types of activities, but our basic characteristic 
is evident in the decline in agriculture. 

(The chart referred to was marked "Exhibit No. 79" and appears 
on p. 145. The statistical data on which this chart is based are 
included in the appendix on p. 243.) 



CONCENTRATION OF ECONOMIC POWER 
Exhibit No. 79 



145 



PERCENTAGE DISTRIBUTION OF GAINFULLY OCCUPIED PERSONS 
16 YEARS OF AGE AND OVER 




1870 laec 

SOURCE: BUREAU OF THE CENSUS 



Dr. Thorp. Now, lef us take the national income which. Mr 
Lubin talked about j^esterday in terms of what people were able to 
get, and think about it in terms of where it comes from. 

The next chart breaks this down into three broad groupings: The 
commodity-producing division, the commodity-handling division, and 
the service division of our national income. I don't want to present 
that as being anything very final or very exact, but it is a useful 
picture of just what has happened over tliis period from 1919 to 1937. 

You notice, for example, how the depression was primaril}' a de- 
pression in the commodity-producing-division group — not exclusively, 
but the narrowing was a narrowing in that particular area. Notice 
that over the period of time there is an upward tendency in the service 
division. That is an increasing part of our activities. 

(The chart referred to was marked "Exhibit No. 80" and appears 
on p. 146. The statistical data on which this chart is based are 
included in the appendix on" p. 243.) 

Dr. Thorp. Just to show the break-down of these things, here is 
a chart which takes the commodity-producing division and gives you 
its component industries. Manufacturing, which is the biggest part 
of our sources of national income, showed the widest fluctuations; 
agriculture is not very steady; construction and mining are less im- 
portant but show considerable variation in their behavior. 

(The cliart referred to was marked "Exhibit No. 81" and appears 
on p. 140. The statistical data on which tliis chart is based are 
included in the appendix on p. 244.) 

Dr. Thorp. If we take this chart which is the commodity -handling 
division, you can see the fluctuations in trade and transportation and 
other public utilities, which is a more stable part of the picture. 

(The chart referred to was marked "Exliibit No. 82" and appears 
on p. 147. The statistical data on which this chart is based are 
included in the appendix on p. 244.) 



146 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 80 



NATtONAL INCOME PRODUCED l*))^-l^37 

BY ECONOMIC DIVISIONS 

BILLIONS OF POILARS BILLIONS OF DOLLARS 



100 

90 
80 
70 
60 
50 
40 

30 

20 
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'19 1920 21 '22 '23 '24 192^ 26 27 28 29 19 W 51 52 55 54 1955 '56 1957 



100 
90 

80 
70 
60 
50 
40 
30 
20 

10 




Exhibit No. 81 



NATIONAL INCOME PRODUCED l^l^-I^^T 

COMMODITY PRODUCING DIVISION 
BILUONS OF DOLLARS BIUIONS OF DOLLARS 



25 



20 



15 



10 





































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1919 20 21 22 23 24 2^ 26 27 28 2? ^ ^1 )2 33 >4 35 56 I937 



CONCENTRATION OF ECONOMIC POWER 



147 



Dr. Thorp. In this chart, the service division broken down; serv- 
ice, finance, Government, and miscellaneous, which comprises items 
not included elsewhere. 

(The chart referred to was marked "Exhibit No. 83" and appears 
on p. 148. The statistical data on which this chart is based are 
included in the appendix on p. 245.) 

Senator King. That chart shows the line for the Government 
continuing to rise. 

Exhibit No. 82 



BILLIONS OF DOLLARS 



NATIONAL INCOME PRODUCED 1919-1^37 

COMMODITY HANDLING DIVISION 

BIUIONS OF DOLLARS 



l> 


\ 














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TRA 


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1919 20 2! 22 29 24 2^ 26 27 28 29 30 91 32 33 34 35 36 '937 



Dr. Thorp. That's right. The line for the Government started 
rising at the very beginning of the chart and has moved up very 
appreciably. It represents on this chart for 1937 somewhat over 
$10,000,000,000 in total national income. 

Senator King. Income? 

Dr. Thorp. In the total national income. This is thinking of the 
Government as an agency which pays wages and salaries and employs 
people, and therefore is a producer of part of the national income. 

Senator King. Would that include States and counties? 

Dr. Thorp. That includes States, county governments, local 
governments. 

Now, in order to get more clearly the comparison, this chart, which 
shows the sources of national income, gives the comparison between 
1919-21 and the 1936-37 distribution. 

(The chart referred to was marked "Exhibit No. 84" and appears on 
p. 149.) 



148 



CONCENTRATION OF ECONOMIC POWER 



Dr. Thorp. You can see that agriculture lias declined in impor- 
tance from 14 percent to 9 percent as of the recent period. Manu- 
facturing has declined slightly; transportation has declined a bit; 
in fact, the outstanding increase is this expansion for government 
from 8 to 15.2 percent. 

These cljanges which take place, of course, are changes which require 
adjustments of one kind or another. Obviously such an important 
thing as the decline in agriculture is of major significance from the 
point of view of the balance in our national economy. 

Senator King. Dr. Thorp, before we meet tomorrow I wish you 
would exartiine again that line showing the Government income, as you 
call it, because my recollection is that it greatly exceeds $10,000,- 
000,000. We collected $6,200,000,000 on the tax bill for last year 
and we had a deficit of four billions. Our national expenditures were 
six plus four billions, approximately; then the States, counties, and 
political subdivisions ran almost parallel, if they did not exceed the 
Federal. 

Exhibit No. 83 



NATIONAL INCOME PRODUCED i^\^'\^')7 

SERVICE DIVISIONS 
BILLIONS OF DOLLARS BILLIONS OF DOLLARS 

12 
10 



12 
10 
6 
6 

4 




































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1919 20 21 22 25 24 25 26 27 28 29 90 31 y. 33 34 35 36 1937 



Dr. Thorp. There are certain reasons why you can't take the total. 
You may recall when Dr. Lubin was talking about national income 
yesterday the question was asked, and I think he explained, that you 
had to take the net. You had to deduct the cost of any materials, 
such things that were purchased, so that you wouldn't get double 
counting. I sujipose the major explanation of tliat dift'erence is the 
fact that local governments in the construction of highways, and so 
forth, acquire materials which may be perhaps located in some other 
industry. 



CONCENTKATION OF ECONOMIC POWER 149 

The second thing is that rehcf payments are not included as part 
the national income estimates. 
Senator King. There would be two or three bilhon dollars there. 



Exhibit No. 84 



SOURCES OF NATIONAL INCOME 

I9I9-I92I AND 1935-1937 



AGRICULTURE 
MINING 

MANUFACTURING 

CONSTRUCTION 

Tl?ANSPORTATI0N AND 
OTHER PUBLIC UTILITIES 

TRADE 

FINANCE 

GOVERNMENT 

SERVICE 
MISCELLANEOUS 



SOURCE. BUREAU OF fORtIGN AND DOMESTIC COMMERCE 
NATIONAL BUREAU OF ECONOMIC RESEARCH 



fOO% 





14.3% 


/ 
/ 


9.2% 








221% 




5.0% 




25^% 








\0.4% 




5.0% 




11.5% 




12.7% 




14.7% 




9.5% 




15.2% 




8.5% 




8.0% 




12.0% 




9.2% 




4.2% 




44% 



I9I9-I92I 



1955-1957 



1.9% 



1.9% 



Dr Thorp. Direct rehef, I mean, ^^'ork rehef is included; sup- 
posedly those people are producing something. Direct relief is not 
included. 



150 



CONCENTRATION OF ECONOMIC POWER 



Senator King. It occurred to me that if you were indicating the 
income of all government, Federal, State, and political subdivisions, 
you ought to include all that had been expended by it, but you say 
that is included by reason of the fact that some of the expenditures 
were for materials, and they might be included in some other category. 

THE IMPACT OF INVENTION 

Dr. Thorp. That is correct. Now I wish to indicate briefly certain 
types of situations which play on the business community and dis- 
turb it or make necessary readjustments here and there. 

A basic one is changes in technology, and for the purpose of indi- 
cating that I have a chart on applications and patents. The top line 
represents applications for patents filed with the United States Patent 
OtFice, the bottom line, patents issued. You can see that as time 
has gone on the applications for patents have increased. They were 
very large during the twenties and the patents issued have steadily 
increased. 

(The chart referred to was marked "Exhibit No. 85" and appears 
on this page. The statistical data on which this chart is based are 
included in the appendix on p. 245.) 

Exhibit No. 85 



APPLICATIONS AND PATENTS 

1836 TO 1937 







































J 






































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90.000 
80,000 
70000 
60.000 
50.000 
40.000 
30.000 
20.000 
10.000 



1838 40 4S '50 



»S ■BO '95 
YEARS 



5 10 15 20 -25 30 35 1937 

PREPARED BY U S PATENT OFFICE 



Dr. Thorp. Of course there always is some lag because there is a 
delay of several years, usually, between the time when applications 
are filed and the time when patents can be finally issued. 

This continual impact of technical change has, of course, the power 
of building new industries and destroying old industries and chang- 
ing processes. Much of it comes out of business itself, which has 
done the work, and yet its reaction is back on business, and perhaps 
on other parts of the business community. It creates problems of 
capital investment and problems of survival which are extremely 
important. 



CONCENTRATION OF ECONOMIC POWER 



151 



Here is another thing which Dr. Lubin talked about yesterday, 
^'the increasing importance of durable goods." * 

(The chart referred to was marked "Exhibit No. 86" and appears 
on this page. The statistical data on wliich this chart is based are 
included in the appendix on p. 246.) 



Exhibit No. 86 



OUTPUT OF COMMODITIES 




♦WnONAL BUREAU OF ECONOMIC RESEARCH 



■■ NON-DURABLE COMMODITIES 
^m DURABLE COMMODITIES 



Dr. Thorp. That has not only importance from the point of view 
of the consumer but from the point of view of the producer, from the 
point of view of the businessman. It is goods of this sort, for instance, 
which give rise to the whole problem of installment selling. 

Installment selling is essentially related to durable goods. It is 
mogtly a matter of automobiles. At least 62 percent of installment 

' Supra, pp. 27 and 28. 

124491— 39— pt. 1 11 



152 CONCENTRATION OF ECONOMIC POWER 

selling last year was in the field of automobiles. But it is important 
in furniture and household appliances. That is related to the problem 
of durable goods, and of course it is true that many durable goods 
are high-priced items, large-priced items perhaps I should say, and 
therefore ^ the purchaser has a problem of selling which is rather 
different from items on which there are small prices. 

Also, there is a matter of making only one sale, and that raises a 
rather different problem for the businessman than on perishable- 
items, consumers' goods of a kind in which he wishes to make frequent 
sales. 

Here is another chart which shows the production of durable and 
nondurable goods — since 1929. Durable goods tend to be post- 
ponable goods. Your purchase can wait, and once you have pur- 
chased it you don't have to come in the market again within a short 
time. The implication back of this it seems to me, is fairly clear 
when you think of the difference to an economy as between my 
buying 25 cents worth of ice every day, and my buying 20 tons of 
ic^e, or whatever it may be, in one purchase when I buy an electric 
refrigerator. That one purchase is equivalent to 20 years — if there 
is a manufacturer in the house we can get the right figure — or 30 
years, or whatever it may be, of ice. I have done that in one purchase. 

Of course, if I am buying ice every day, right on through, there is 
a steady employment and a steady economic activity, but the intro- 
duction of this durable item raises new problems. If many people 
buy all their ice at once in the form of electrical refrigerators, and do 
it when they have money, the net result is going to be, obviously, 
this kind of behavior with regard to purchases at some later date. 

(The chart referred to was marked "Exhibit No. 87" and appears 
on p. 153. The statistical data on which this chart is based are 
included in the appendLx on p. 247.) 

"Dr. Thorp. There is another kind of change that I want just to 
cite, and that is the increased importance of selling. It used to be 
true that the businessman's major problem was to make the goods. 
Today his major problem is to sell them. That means a shift in in- 
terest and in importance and in the kind of problems awaj from pro- 
uiuction problems to merchandising problems, and that raises a whole 
series of questions. 

FOREIGN TRADE 

Dr. Thorp. Here is the effect of foreign business. This is a chart 
on United States Foreign Trade. The exports and imports are 
presented here, and in this little insert chart is the ratio of exports to 
the total prodQction of movable goods — that is, of goods that could be 
exported. You will notice that going through the period along in the 
twenties we were exporting about 10 percent of the available movable 
goods. Since then we have exported between 7.5 and 6.6 percent. 

(The chart referred to was marked "Exhibit No. 88" and appears 
on p. 154. The statistical data on which this chart is based are- 
included in the appen-dix on p. 248.) 

Senator King. That includes all exports? 

Dr. Thorp. This includes all exports and all imports. Foreign 
conditions, of course, affect us through our exports and imports; also 
through capital markets; also through the price structure, in that prices 



CONCENTRATION OF ECONOMIC POWER 



153 



in other countries, even if goods do not flow to us, by their very threat 
to us, may affect our own price structure. 

Senator King. We lost nearly one-half, did we not, from the high 
peak to the low of our exports? 

Exhibit No. 87 

PRODUCTION OF DURABLE AND NONDURABLE 
MANUFACTURED PRODUCTS ^I^Z^-I^^S 



fNDEX NUMBERS - 1929 = 100 
120 



(monthly) 



INDEX NUMBERS -1929 = 100 
20 




1929 1950 \9^\ \932 1953 1954 19^5 ^9J(> mi 1938 



SOURCE: BOARD OF 60VERN0R5 OF THE FEDERAL RESERVE SYSTEM 



Dr. Thorp. More than that. Our total exports in 1920 were over 
$8,000,000,000; the low point is $1,000,600,000. 

Senator King. At one time we had $13,000,000,000 of foreign trade, 
imports and exports, in 1923. 



154 CONCENTRATION OF ECONOMIC POWER 

Dr. Thorp. That is in 1920, and if you add imports and exports in 
1932, the total was 2.8 bilUon. 

Senator King. Obviously, the loss of that export market had serious 
repercussions upon our whole economy. 

Dr. Thorp. This had very serious repercussions^ The sending of 
these goods abroad, of course, had very definite supporting effects on 
industrial activity; to the degree to which the payment for them was 
never collected there were repercussions on our financial circles as 
well. 

Senator King. We not only lost our goods but we loaned $2,000,- 
000,000 one year for them to buy our goods, and lost that, did we not? 

Dr. Thorp. We certainly did. 

Exhibit No. 88 



UNITED STATES FOREIGN TRADE 



IN MERCHANDISE 



BIUIONS OF DOLLARS 



BILLIONS OF DOLLARS 
10 

9 

8 

7 
6 
5 
4 
3 
2 
I 


I9» 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1950 1951 1952 1955. 1954 1955 1956 1957 

iOURCC BUDUU OF rontJCII AND DOMESTIC COMMtRCt 



10 
























1 1 1 1 1 1 1 1 




9 




'^■^'^^ffs^iicr^Si^^''^ 


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12 
10 
8 

4 

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mi l«l 1923 1925 l«7 m «3I 1933 1935 1937 




5 
4 
5 
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THE IMPACT OF WAR 

Dr. Thorp. I would like also to introduce as another disturbing 
factor the factor of war or the threat of war. When I showed you the 
construction charts you could see how in the twenties we were active 
making up for what had been the restrictions of the war period. 
While this chart is here I can show you the effects of the war, because 
this 1919-20 picture was very definitely a picture which was affected 
by that situation. 

(The chart referred to-vvas marked "Exhibit No. 89" and appears 
,on p. 155. The statistical data on which this chart is based are 
included in the appendix on p. 249.) 



CONCENTRATION OF ECONOMIC POWER 



155 



Dr. Thorp. Here is another way of picturing the effect of war, 
through its disturbing effect upon the general level of prices. We 
had the great peaks and great disturbances of 1815, 1865, and in the 
last vn&T period. In other words, from the point of view of disturbance 
and of problems of adjustment, war, and to a considerable degree the 
threat of war, is an important factor in the whole economy. 

Senator King. Doctor, this is not quite germane. In your surveys 
you discovered, did you not, that we have had rather serious periods 
of depression; back in 1837, 1847, 1857, 1873, and 1893, and then the 
last few years. 

Dr. Thorp. Yes, sir. 

Senator King. So recessions or depressions are a part, at least have 
been a part, of our economy for many years. 

Exhibit No. 89 



Wholesale Prices 

All COMMODITIES 



1 j r^r/f 4r,nse 

1 I ^m im,na« nrt 


1 
1 




— — i"" 












\ 






^ u 






1 


i 


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ll 1 \ 


I 






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I ' /v, J 1 


V 


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K^i 


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1 












1 





Jtoo leio isfo IS30 IS40 isse 

t^rnsSarrs dMi<iu o/Uaon SMnjrtcs 



mo i3!o aso mo 



FLUCTUATIONS IN BUSINESS CONDITIONS 

Dr. Thorp. Yes, we have as far back as the record is available 
found fluctuations in business. That is the next topic which I would 
like to suggest as one of the disturbing elements in the operation of 
the individual businessman, the fact that while he is a part of it, 
nevertheless to him come these fluctuations in business and he is 
very closely related to all other businessmen. 

I once made a study of the history of business conditions and in the 
early years of the nineteenth century we frequently would have to 
say that the country was prosperous in the South and depressed in the 
North or vice versa. 

Nowadays the effect of general business conditions sweeps through- 
out all the country so that the pattern is apt to be very much the same, 
although I think just to take one illustration, it is worthy of note 
that the great State of Texas seems to have been able in the last few 



156 COXCENTRATION OF ECONOMIC POWER 

months to have stood out decidedly above the general trend of the 
Nation with regard to its business eonditions. 

If you take indexes of various sections of the country, most of 
them are around 75 at the present time as compared with 1928, 1929, 
and 1930. But Texas is somewhere around the level of that earlier 
period. Florida is the same way, but basically the pattern is the same 
throughout the country and businessmen themselves find much of 
their problems of adjustment coming out of the general pattern. 

THE NEED FOR CONTINUAL ADJUSTMENT 

Dr. Thorp. Finally, as an influence that is disturbing, there are 
changes in government policy. It is possible to make adjustments, 
of course, to any situation. One gets used to it, but any change in 
the situation is apt to be a disturbing factor, and uncertainty makes it 
even harder to plan. In this whole situation I think one has to feel 
that we need rather tremendous methods of keeping in balance. It is 
a very complicated machine. It has very different parts, but -the 
parts are very closely related to each other, and so many different 
disturbing elements come into play that we need very fine forms of 
adjustments. 

We need lots of valves that are working well, and I think one way 
of putting this whole problem is to find out at what points we are 
getting adjustments, where do we have flexibility and where do we 
not have flexibility in the process of keeping in balance. 

There is no simple answer, as I think I have indicated here in this 
testimony. It is a complicated system, and its parts are very different, 
and without a pretty definite understanding of how these parts work 
and what kind of disturbing factors come in — and when I use the word 
"disturbing" they may be stimulating or retarding factors — it is 
difficult to appraise the structure. 

We need to know more about how those various factors work, and 
the variations within the whole system. The parts are all here. I 
think one way of putting the problem is how to make the various parts 
work steadily at maximum efficiency. 

Senator King. A higher degree of civilization makes for the condi- 
tion you just described, in contradistinction to primitive conditions 
or where you have dictatorship. 

Dr. Thorp. Cojnplexity is very definitely a form of life which 
emerges as civilization advances and along with specialization of 
product and enterprise comes a specialized type of problem so that 
dealing with the problem becomes more difficult as well. 

Senator King. Mr. Chairman, I think Dr. Thorp deserves a vote 
of thanks. 

The Chairman. We feel very grateful, Dr. Thorp, for a very excel- 
lent presentation. 

The committee will stand in recess until tomorrow at 10:30 a. m., 
when Mr. Leon Henderson will make a brief summary. 

(\^T:iereupon, at 4:45 p. m., a recess was taken until Saturday, 
December 3, 1938, at 10:30 a. m.) 



INVESTWATION OF CONCENTRATION OF ECONOMIC POWER 



SATURDAY, DECEMBER 3, 1938 

United States Senate, 
Temporary National Economic Committee, 

Washington, D. C. 

The Temporary National Economic Committee met, pursuant to 
adjournment yesterday, at 10:30 a. m. in the caucus room of the 
Senate OfRce Building, Senator Joseph C. O'Mahoney, presiding. 

Present: Senators O'Mahoney (chairman). King, Borah; Repre- 
sentatives Sumners, Reece, Eicher; Messrs. Lubin, Hinrichs, Douglas, 
Frank, Patterson, Arnold, Berge, Ferguson, Davis, Oliphant, Peoples, 
Henderson. 

Present also: Directors of Studies Dr. Willard Thorp, Commerce; 
Mr. Hugh B. Cox, Justice; Mr. Wilhs J. Ballinger, Federal Trade 
Commission; Mr. Thomas C. Blaisdell, Securities and Exchange Com- 
mission; Mr. J. J. O'Connell, Treasury; Miss Aryness Joy, Labor. 

The Chairman. The meeting will come to order. Gentlemen, will 
you take your seats? 

On Thursday and on Friday, Dr. Lubin, of the Bureau of Labor 
Statistics, and Dr. Willard Thorp, who has been associated with the 
Department of Commerce in the studies which have been going on, 
gave testimony to the committee setting forth the character and 
changes of our economic system. Today Leon Henderson, executive 
secretary of the committee, -will attempt to pose the questions wliich 
are suggested by the testimony of Thursday and Friday. Mr. 
Henderson will now take the stand. 

TESTIMONY OF LEON HENDERSON, EXECUTIVE SECRETARY, 
TEMPORARY NATIONAL ECONOMIC COMMITTEE, WASHING- 
TON, D. C. 

Mr. Henderson. Senator O'Mahoney 

The Chairman (interposmg). Won't you first tell us who you are? 
There may be some people who may be a httle bit uncertain. 

Mr. Henderson. Well, I am at present executive secretary of the 
Temporary National Economic Committee. Immediately prior, I 
Avas consulting economist for W. P. A. During the 1936 Presidential 
election campaign, I was working with the Democratic National 
Campaign Committee. Prior to that I was economic adviser to the 
United States Senate Committee on IVlanufactures. Prior to that 
I was in various positions with the N. R. A., having been economic 
adviser to General Johnson, and later to the National Industrial 
Recovery Board, and a member ex officio of the Industrial Recovery- 
Board, as well as director of the Research and Planning Division of 

167 



158 CONCENTRATION OF ECONOMIC POWER 

N. R. A. during that period. Before that I was director of the 
department of remedial loans of the Russell Sage Foundation. 

The Chairman. And for this committee you have been acting 
principally as coordinator of the activities of the various executive 
departments which are represented on the committee and of the work 
undertaken by other executive agencies at the request of the com- 
mittee. 

Mr. Henderson. That is correct, and I think it ought to be said 
that practically everything which I am covering today is entirely new 
for the committee, and if there is a responsibility involved, it is mine, 

THE AMERICAN ECONOMY 

Mr. Henderson. In essence, Dr. Lubin has given us a picture of 
the American economy in terms of its performance, and Dr. Thorp 
yesterday in very unique terms described the machinery of produc- 
tion and some of the operating difficulties which confront the business 
man as an agent of production. 

We are, left with a tremendous sense of appreciation for the degree 
of coordination which still remains in an economic system that could 
produce $62,000,000,000 of national income this year, and about 
$70,000,000,000 last year.' 

But appreciation gives way to bewilderment and perplexity when 
we remember losses like $120,000,000,000 of wages ^nd salaries," $38,- 
000,000,000 of farm income ^ and $20,000,000,000 of dividends* in 
the last 9 years. 

These are dollar signs of measurement. In human terms the losses 
are measured by the millions of unemployed.^ I ought to emphasize 
that Dr. Lubin's figures on losses are computed on a ver}^ conservative 
basis, that of 1929. He did not, as he properly might have, allow 
either for the natural increase in population which we know has taken 
place since 1929, nor did he give in his computations any consideration 
to the growth line in the American economy over a long period of years. 

I want to refer to that growth line because it has been the outstand- 
ing measurement of the growth of the American economy. This line 
here ^ shows what has taken place in the growth of national income. 

The Chairman. May I interrupt to ask you to identify the chart 
for the benefit of the record. 

Mr. Henderson. I am now referring to the chart, "United States 
National Income," ^ and if we had also the chart showing the growth 
in industrial production, it would follow, of course, that line, since 
this is a dollar equivalent of the physical production. If, however, 
we assume that America was moving up like this,^ we would assume 
that by 1938, if the same rate of exports had persisted, if t^e same 
adjustment had taken place as was taking place in the most productive 
part of the 1920's, we would probably be in terms of 1929 dollars at 
around $94,000,000,000 of national income. 

Senator King. Doctor, you do emphasize, do you not, the rr'ation 
between the United States and other governments, the rest of the 
world? That is to say, the rest of the world plays an important part 
in our economic development. 

1 See exhibit No. 5. supra, p. 5. 

• Sec exhibit No. 10, supra, p. 14. 
» Sbc exhibit No. 12, supra, pi 16. 

* See exhibit No. 11, supra, p. 15. 
» See exhibit No. 9,.i^pra, p. 13. 

e ■Rr^f.■rr!ne to top line of exhibit No. 5, supra, p. 5. 



CONCENTRATION OF ECONOMIC POWER ][59 

Mr. Henderson. I hope to come to a part of that before I am 
through, Senator King. 

If Dr. Liibin had very properly estimated this as a loss, and it is 
a very real loss when you come to think in terms of unemployment, 
he might have estimated, as Dr. L. H. Bean of the Department of 
Agriculture has estimated, that the loss in national income has been 
$293,000,000,000 since 1929. 

The Chairman. But Mr. Henderson, is there any reason to believe 
that this expansion which is represented on this chart, "United States 
National Income," as rising from about $10,000,000,000 in 1890 to 
68 or 69 bilhon dollars in 1920, and 81 billions in 1929, could by any 
possibility have continued at that rate? 

Mr. Henderson. It depends upon your assumptions. Senator 
O'Mahoney, If you take the rate of growth that was persistent 
during the 1920's, it is fantastic to consider the degree to which the 
national income might have gone. If you translate it in terms of 
what are the markets for our goods, it is fantastic also. 

The Chairman, What I have in mind, and I raise this not in an 
argumentative way but merely to indicate my own belief that Dr. 
Lubin's figures were more realistic, is this: 

Yesterday Dr. Thorp presented a chart showing the first 10 indus- 
tries in the United States in two separate periods.^ The second 
period showed that the motor-car industry had become the first 
industry in the United States, whereas in the earlier period it wasn't 
represented among the first 10 at all. 

Now, I have the notion that a large part of this expansion between 
1915 and 1929 was probably due to the expansion of the automobile 
industry, and we also know that there is a point of saturation in every 
market, and it is possible that in 1929 that point had come in the 
automobile industry where it was no longer possible to multiply 
sales without doing what Dr. Lubin indicated ought to be done, 
increasing the purchasing power of the lower-income groups. 

I cite this merely to indicate, as I say, my own belief that the 
figures of Dr. Lubin were a little more realistic. 

Mr. Henderson. I am afraid that I will have to take a different 
interpretation of realism in terms of two or three things. First, the 
dynamics of the capitalistic system of production require that a 
certain amount of savings be employed in expansion of the producing 
system, and if that is true, and if consumption keeps pace with that — 
and I have no doubt as to the possibilities of expansion of consump- 
tion — then a moderate rate of growth is not only realistically .to be 
assumed, but it becomes what is even more important, almost 
necessary, I expect to make some observations on that a little bit 
later. 

unemployment and the labor supply 

Mr. Henderson. We have two tests as to performance of the 
economy, one in dollar signs of national income and one in terms of the 
number of the unemployed. 

There are no regular current figures of unemployment in the United 
States oflBcially maintained. In the course of the work that I have 
done over a period of time, howaver, it has been necessary to make an 

« See exhibit No. TO, p. 129, 



150 CONCENTKATION OF ECONOMIC POWER 

estimate, so I should like, in order to get some measm-ement in human 
terms, to insert an unofficial estimate of unemployment which I have 
made myself. 

Assuming that in March 1933 the total unemployment had reached 
14,317,000, the low point since that time was July of 1937, when there 
were 7,412,000. By February 1938 the number of unemployed had 
risen to 11,793,000, and as of October 1938, unemployment was 
approximately 10,569,000. 

During this period, one of the things which made difficult the esti- 
mating of the unemployed was the number of new persons that were 
entering the labor force, those who were seeking jobs, in other words. 

In January 1929, the labor force was estimated to be about 48,- 
000,000. In March of 1933 it was about 50,646,000. By the time 
we had reached the low point in this movement of July 1937, the labor 
force was 53,346,000. As of today, it is about 54,230,000. 

Now, converting the performance of the economy in terms of the 
reduction of unemployment, taking: the high of March 1933, of 
14,317,000, and the low of July 1937, of 7,412,000, that would show 
a net reduction of 6,905,000, but there had been in that time 2,700,000 
added to the available working for'-e. Taken together, that meant a 
net increase in unemployment of about 9,605,000, so that in the 
forward drive that took place between March of 1933 and July of 
1937 about 9,005,000 people found jobs. 

Senator King. Including those on relief paid by the Government? 

Mr. Henderson. No. 

Senator King. Those given work b}^ the Works Progress? 

Mr. Henderson. No. 

Senator King. Or the P. W. A.? 

Mr. Henderson. P. W. A., yes. 

Dr. LuBiN. Mr. Henderson, on the basis of those figures it is correct 
to assume that if we had had no depression since 1929, if we had kept 
going on a perfectly straight line, the number of people who were 
added to the labor force plus those who were unemployed in 1929 
would mean that you would still have had around 8,000,000 people 
unemployed in the United States at the present time? 

Mr. Oliphant. On the level of production of 1929. 

The (>H airman. "What is the constant rate of expansion of the 
labor force? 

Mr. Henderson. The estimates vary. A conservative estimate 
places it at about 30,000 a month, and another nearer 50,000. 

The Chairman. That would be 600,000 a j^ear at 50,000. 

Mr. Henderson. And the one of 50,000, I would say, comes 
closer to corresponding to the estimate of the labor force that you can 
derive from the Biggers census. 

The Chairman. Those estimates are based on census figures? 

Mr. Henderson. They are based upon our experience over a period 
of time and the census. 

The Chairman. Does that represent a net increase? 

Mr. Henderson. Yes. 

The Chairman. In other words, when you say the increased avail- 
able labor supply is 30,000 or 50,000 a month, you are takmg into 
consideration the numbers of persons who by death and illness and 
all other circumstances are retired from the labor market. 

Mr. Henderson. That is right. 



I 



CONCENTRATION OF ECONOMIC POWER IQl 

The Chairman. On the basis of these figures would you care to 
indulge in any prophecy? 

Mr. Henderson. Senator, so far as prophecy is concerned, I 
might say that I have retired from the field. I am somewhat in the 
position of the fellow who, the first time up, made a hole in one in 
golf, and he said, "Why go any further? I've reached perfection." 

Representative Reece. I am interesed in your estimates of the 
employables in the country. As I understand, you estimate that there 
are now 54,000,000. 

Mr. Henderson. That is right. 

Representative Reece. Out of a population of how many? 

Mr. Henderson. About 130,000,000. 

Representative Reece. The estimate strikes me off-hand as being 
rather high. Upon what was the estimate based? 

Mr. Henderson. The estimate is based upon the census and then 
estimates for the intercensal periods, based upon the known nii'^'^er 
that are coming into the market and other estunates. 

Mr. Oliphant. And includes both men and women? 

Mr. Henderson. Yes. 

Representative Reece. In connection with the various unemploy- 
ment censuses, has there been a census made or an estimate made from 
the standpoint of the number employed at one period as compared to 
the number employed at another period showing the number who had 
lost employment, with a view of arriving at the number employed of 
the unemployed from the standpoint of those who had previously 
been employed and had later lost their employment? 

Mr. Henderson. Dr. Lubin gave the figures on employment which 
are calculated each month. 

Representative Reece. I had in mind that there is a certain number 
of people who might be classed as unemployed who probably had 
never been employed. 

Mr. Davis. And who do not want to be employed. 

Representative Reece. And I fear some of them may not wish to 
be emploj^ed. 

Mr. Henderson. The estimate of the total number in the labor 
force is made by the National Industrial Conference Board, which, 
as you probably know, is an employers' organization. 

Representative Reece. When you have a voluntary unemplo3-inent 
census, it has been my observation that the people who will go to 
register as unemplo3^ed include, especially in the rural sections, a 
large number of people who may work at periods on (he farm, but by 
registering as unemployed hope to secure positions otherwise. 1 pre- 
sume, however, that those in charge have taken account of that. 

Dr. Lubin. Congressman, the significant thing is that, if you start 
out with the assumption that there were a certain number of people 
unemployed in 1929, about 1,800.000, thai doesn't mean that the 
same 1,800,000 were unemployed all the time. It is the average for 
the year. It means on the average there were 1,800,000 people out 
of work. 

If you add to that 1,800,000 the number of people— or, let's put it 
this way: If you take the labor supply of 1929 or 1930 as shown by the 
census and add to it the net increase in the employable population, 
that is a net figure which takes into consideration not only deaths, 
retirements, illness, but also takes into consideration the growth in the 



Jg2 CONCENTRATION OF ECONOMIC POWER 

number of people at school. In other words, during that period there 
was a tendency for people to stay in school longer, cutting down the 
number entering the labor market, and if you add all those people 
to the number available for work in 1929 and substract from it our 
figures on employment, you get the figure Mr. Henderson gave you, 
and incidentally that figure is within a few percent of the figures 
shown by the census of 1937. 

In other words, either through census methods or through statistical 
estimates the results are so close together that the variation is very 
small. 

Mr. Henderson. Dr. Lubin, maybe if I were to give some other 
figures it would be helpful. 

Take in October 1938, when I estimate there were 54,149,000 in the 
labor force, there was a total employment of 43,580,000, of which the 
nonagricultural employment was 32,686,000 and the agricultural was 
10,894,000. 

We will get, as Dr. Lubin's figures come out, a confirmation of that 
number of the nonagriculturally employed you see, and so you have a 
pretty good test. 

You might want to ask me, however, Mr. Congressman, whether 
or not, with a rising level of activity, a lot of what constitutes regis- 
tered unemployment would disappear. I would say most assuredly 
yes, because when you have a condition in which the chief wage 
earner becomes disemployed then, very frequently, the wife and other 
members of the family who are of working age become unemployed 
also in the sense that they are seeking jobs, and one of the reasons 
why, after you reach a certain period in the level of activity, you get 
a rapid decrease in the unemployed lists, is that numbers of wage 
earners get back into their accustomed pursuits and their wives and 
members of their families are taken off the registers for employment. 

Representative Reece. I think it would be very interesting to see 
some kind of break-down of the estimate by which you arrive at the 
conclusion that there are 54,000,000 employables. 
^ Mr. Henderson. I will be glad to write out a statement and sub- 
mit it for the record.' 

The Chairman. Would it be correct statistically to say that one 
person out of every two and a half in the United States is ready, 
willing, and able to work? That would be 54,000,000 out of the 
130,000,000. 

Mr. Henderson. Five out of about thirteen would be my guess. 
That is about right. 

Senator King. In the figures which you have given of the popula- 
tion, 129,000,000, as I understand you to say, how many do you figure 
or estimate are under the age of 16? I am tr3dng to get a break-down 
showing the number of persons who are adults and who, if health 
permitted, are not too old to find employment.^ 

Mr. Henderson. 1 haven't got here. Senator, the last census esti- 
mates, and its distribution by age groups. You remember this chart 
Dr. Lubin presented is based on the Biggers census of the numbers 
of unemployed.^ 

' Mr. Henderson subsequently submitted a statement for the record which is included in the appendix 
on p. 250. 

' Mr. Henderson subsequently submitted a table containing this data v. hich is included in the appendix 
on p. 251. 

• See exhibit No. 48, supra, p. 64. 



CONCENTRATION OF ECONOMIC POWER Igg 

Senator King. He went to the age of 15, but I want to go farther 
down and find out the number of persons under 16 years of age in 
this 129,000,000 group, to enable me to determine, so far as I may, 
the accuracy of your statement as to the number of unemployed, 
54,000,000 out of 129,000,000. If you subtract from 129,000,000 the 
children under 16 years of age, you have taken a very large segment 
out of that total amount. 

Mr. Henderson. I didn't say 54,000,000 unemployed. Senator 
King. I said there were 54,000,000 people in the labor supply. 

Senator King. Yes, that might be employed; 54,000,000. 

Mr. Henderson. And you come at it in another way. It is esti- 
mated currently that in nonagricultrual pursuits, factories, mines, 
railroads, and things hke that, we have at the present tune about 
32,686,000 people actually at work somewhere now ^ and we have about 
10,894,000 as the estimate of the Department of Agriculture of the 
people that are employed in agricultural pursuits. That gives you 
a total of 43,580,000 people who are employed at the present time. 

Representative Sumners. Mr. Henderson, may I ask, does that 
54,000,000 include people who are employed under their own control 
or salaried people? 

Mr. Henderson. It includes all professional people, aU persons 
who are proprietors. 

Representative Sumners. What number of the people in the groups 
would you classify as people who are employed or salaried people, if 
there are any such data, as distinguished from the person who is work- 
ing for his own business, working for himself, or in a profession? 

Mr. Henderson. The Bureau of Labor Statistics estimates that 
there are now aboiit 4,300,000 proprietors and self-employed in non- 
agricultural pursuits. 

Representative Sumners. While you are interrupted may I ask a 
question, please, sir? With regard to this 1929 figure, as a practical 
proposition, could we reasonably hope to reestablish the 1929 produc- 
tion momentum, the general conditions that obtained then, reestablish 
and keep it going? 

Let me put it this way: Was that a condition that we could reason- 
ably hope to keep going, or was it an abnormal peak of activity that 
stuck above what you would hope to have as the level? 

Mr. Henderson. I am very optimistic about it, Mr. Congressman, 
myself. I give you the same answer I gave the chairman — I wouldn't 
want to make any distinction between the chairman and the vice 
chairman. I will not say thaft realistically that is possible, but neces- 
sarily we have got to go beyond that in order for this thing we call a 
system to maintain itself. That is my personal point of view, and not 
anything derived out of my work for the committee. 

Representative Sumners. We appreciate that because that is what 
we are trying to get. 

Mr. Henderson. I will not only say that I believe that that is not 
a distortion or not an unusual occurrence; I think it is in the logic of 
the growth of America, and I think that the logic also impels you to 
feel that not only will we go forward, but that we must go forward 
if we want to maintain a whole set of institutional relationships which 
we call the American system. 

' See exhibit No. 33, supra, p. 44. 



164 CONCENTRATION OF ECONOMIC POWER 

Representative Sumners. When you say "go forward," do you mean 
go forward and increase the momentum and the relative volumes of 
production, and so forth, which we had in 1929? Is that what you 
mean by going forward? 

Mr. Henderson. Yes, I mean going forward. Probably we will 
have a lower rate of increase, because we are reaching a period which 
every productive system reaches, in which we tend to level out a bit, 
in which we tend to make our adjustments, and I am going to discuss 
a little bit later some of those changes that seem to be taking place, 
and from that I feel that the committee, taken together with its own 
ideals, will get an idea of what we need to study as a basis for our 
recommendations. 

Could I make an affirmative statement? I have raised a question: 
Are we in for stagnation or decline? — and that is a favorable topic of 
observers, for the titles of books that are appearing now, and if I were 
asked to give my guess, I would say we are not in for stagnation and 
decline. When I get into a discussion of the ba^c assumptions of the 
American system, I think I can indicate why. 

Representative Sumners. May I ask you this question, and then 
I will finish: In the stud}^ made b;^ any of the executive agencies 
ivhich are going to make presentations here, have there been any 
considerations of the possibility of using what you have designated 
as unemployed people in an attempt to restore the waste to the earth 
which has been committed by the last few generations, the destruction 
of the fertility of our soil, and that sort of thing? 

Mr. Henderson. I think that is the central thesis of a lot of the 
work which the National Resources Committee has done. 

Representative Sumners. I think that is really more important 
than the automobile. 

Mr. Henderson. I think there are many people who would agree 
with you. The National Resources Committee has devoted a con- 
siderable amount of care, certainly more care than has ever been 
devoted before in our history to that question and produced a tre- 
mendous report, part of which, of course, is being utilized as the 
various works programs go forward. 

Mr. Oliphant. Would the 1929 level of business activity absorb 
the imemployed? 

Mr. Henderson. No, there was a residual amount of unemploy- 
ment at that time, estimated in the neighborhood of 1,600,000, and 
that includes, of course, an estimate of the float, you might say of 
people in transition from one job to another. 

Mr. Oliphant. But since then we have had this growth in popula- 
tion. Have you any figures to indicate how many unemployed we 
would still have if we now had the 1929 level of business activity? 

Mr. Henderson. Well, we would have at the 1929 level — my 
estimate is a little higher than some others — but I would say around 
seven to eight milHon. 

Mr. Oliphant. Still unemployed. 

Mr. Henderson. Yes. As a point of departure I mil say at our 
peak in production we reached about 120 in the level of industrial 
production, and we reached about 81 billion in national income. In 
order to attain the same status of unemployment that we had in 1929, 
we would need to go to about 140 in the index of production that is 
maintained by the Federal Reserve Board. 



CONCENTRATION OF ECONOMIC POWER 1^5 

Considering that we are now aboiit 101, somewhere in there, that 
will give you an idea of what we have got to get in terms of physical 
production before there would be an absorption down to the level 
that we had in 1929. 

Mr. Oliphant. Let me see if I understand it. If we got back to the 
level of business activity of 1929 which has been characterized as 
unreal or artificial, we would still have between seven and eight 
million of unemployed. 

Mr. Henderson. That is right. 

Senator King. Mr. Henderson, were there not some maUgn in- 
fluences operating in our country along in 1924, 1925, 1926, and up 
to 1929, which produced a sort of feverish activity in some of our 
industrial plants, in some of our industries, and those malign influ- 
ences in 1929 reached their culmination, and then finally the fever 
largely disappeared, or in part disappeared, which resulted, of course, 
in a decline in production, leaving the patient, if I may use a parallel, 
somewhat exhausted, considerably exhausted as a result of the 
feverish acti\'ity, but still with life enough to continue. 

Mr. Henderson. For the first part of my answer I would rely on 
what Dr. Thorp said yesterday. For the second part I think I have 
already indicated that, well, to use a phrase, "There is Ufe m the old 
gal yet." 

Any system that gives emplojanent to 43,000,000 people, any 
system that produces $62,000,000,000 of national income and any 
system which even at this low level is ahead of the estimates of the 
per capita income available in other countries, is stiU a pretty vigorous 
and virile system. 

Senator King. No one would deny that. 

Mr. Henderson. I wanted to say something about this estimate 
that I gave you, that we would have to get up to 140 in the Federal 
Reserve index of production for that absorption. I want to call to 
mind, however, that that would take us at least 20 points above the 
high point up to this time, and that we reached bottle necks in 1937 
when tills thing was taking place here, this durable goods production 
here,^ that there were numerous industries that were operating at 
almost capacity production. 

Now, the reasons assigned for this downturn are many. I think 
that this committee can well leave to another time its own assessment 
as to those reasons, because my own feeling is that there is a con- 
siderable amount of information, facts, that will be produced which 
will illuminate that whole picture. 

Senator King. You mean during this hearing. 

Mr. Henderson. During our set of hearings and in the production 
of reports which the various agencies will present. It is easy to see, 
however, whQ,t is the requirement in terms of savings that are going 
to be needed in order to build a bigger machine for getting up to that 
production. 

In other words, if we can find' a set of conditions which ^vill not 
give us the violent disturbance at tliis point when arrived at again, 
then the basis for capitaUstic expansion has been provided, and this 
thing we call over-saving or under-investment is partially taken care 
of because after all that [durable] is investment, that [nondurable] is 
consumption when you are thinking in terms of these two lines 

' See exhibit No. 87, supra p. 153. 



IQQ CONCENTRATION OF ECONOMIC POWER 

on this chart, production of durable and nondurable manufactured 
products.* 

Representative Sumners. Mr. Henderson, in looking to our prob- 
lem, are there any suggestions which you would be disposed to make 
to the committee with reference to the possibihty of reestabhshing 
the relative quantity of exports in 1929, or doing some other domestic 
thing to absorb the labor which was then used in producing the com- 
modities which we exported? That strikes me as some difficulty, 
and I don't know whether you had thought about it. 

Mr. Henderson. Such a prospect is always inviting a request for 
solutions, Judge, but I should like to be reheved. 

Representative Sumners. All right. 

Senator King. May I ask one question there, if I may? I remem- 
ber, in the tariff hearings in 1930, there was a great deal of discussion 
as to the employment which resulted from our exports of raw material 
as well as of finished products. 

We had exported, as was indicated yesterday by Dr. Thorp, as 
much as $6,000,000,000 in a given year,^ and my recollection is that 
we had some testimony before the committee, which indicated that 
those exports not only gave employment on the farm but they gave 
employment to 5,000,000 oif people in factories in the production of 
finished and semifinished products, and that if we reduced our exports 
materially, we would throw out of employment a very large number 
of people. 

Mr. Oliphant. You mean these exports during the 1920's. Were 
they ever paid for? 

Senator King. Many of them were paid for in 1923, but that means. 
a loss of capital. We lost not only the eight or ten bilHons of dollars 
capital which was loaned during the war, but we loaned two to five 
biUion of capital after the war, most of which was never paid, so jou 
would take into account, of course, I would assume, the destruction 
of capital as well as the contributing factors to the decline in produc- 
tion. 

Mr. Henderson. I intend to discuss that under another head, 
Senator King, but at the peak it was estimated, I beheve, that about 
3,200,000 people were employed in producing goods for export and 
we are down now to about 2,400,000 that are producing goods for 
export. 

Senator King. That includes agriculture, I suppose. 

Mr. Henderson. Yes. 

Representative Reece. I beheve, Mr. Henderson, if you will 
pardon me, you stated if we should now return to 1929 production, 
there would be some seven or eight million unemployed. If, how- 
ever, our economic machinery was geared to the same productive 
activity to which it was geared in 1929, our population having increased 
our demand for goods consequently increased, wouldn't it be con- 
templated that the activity would be expanded so as to meet these 
increased demands arising from the increase in population and thereby 
the same economic activity would consume the normal increase in 
the labor supply? 

Mr. Henderson. I think, Congressman Reece, that is one of the 
basic questions that this committee has got to take up, because we 

> Exhibit No. 87, supra, p. 163. 
•Exhibit No. 88, supra, p. IM. 



CONCENTRATION OF ECONOMIC POWER Jgy 

have now, as you will remember from one of the charts that was 
here, a number extending upward beyond 20,000,000 people who are 
deriving their livelihood partially or entirely from Government 
sources, and that does constitute a demand; that is, the demand is 
equivalent to an introduction at one level of an additional population. 

Representative Reece. Referring to the 1929 production, it doesn't 
seem to me any more significant than referring to the 1919 production, 
or 1909 production. In those years our economic machinery was 
geared so as to in a reasonable degree meet the demand for goods, 
the demand arising from the population as it was at that time. Al- 
most 10 years have passed since 1929. Our population has increased, 
our demand for goods presumably has increased, and to make a 
comparison of production itself to the mere production of goods in a 
decade previously doesn't seem to me to paint a very vivid picture. 

Mr. Henderson. My estimate of seven or eight million unemployed 
on 1929 levels and later my estimate of 140 in the index of production 
takes into account the increase in the population that has taken 
place. . That has been given weight. I have a very extended study 
of that from which I have only abstracted and I think that we can 
well afford to have a separate hearing on that (question. 

Senator King. Before you conclude your testmiony, today or when 
you came to the sland again, I should be very glad if you would break 
down that 54,000,000 which you say may be gainfully employed, and 
indicate how you have divided the 129,000,000 population into the 
employed and unemployed, how many of them are women and how 
many of them are children under 15 and over; a breakdown so that 
we may know just how many there are.^ 

Mr. Henderson. And where the problem lies. 

Senator King. How many are susceptible of employment under a 
prnner economic system? 

3lC ASSUMPTIONS OF AMERICAN COMPETITIVE CAPITALISTIC 
SYSTEM 

Mr. Henderson. You have spoken and we have spoken many 
times of the system, and people are always asking, What is tliis sys- 
tem? It is not easy to define a system, but it is fairly easy to recog- 
nize one through identifying cjiaracteristics. The American system 
has had certain characteristiv'S in common with other systems of 
capitalistic production, but it also has had special traits which dis- 
tinguish it from all others. This thing we call a system which I find 
difficult to define and merely trj'- to identify, comprises something 
more than just an economic program. It includes a basic philosophy, 
a set of legal and political institutions, and a cluster of business in- 
stitutional operating policies, and all are usually as closely related 
to the community's ideas about the future as they are tied to past 
experience. 

I have undertaken to set down basic assumptions as I see them of 
the American system of competitive capitalism. In the first place, 
the American system has emphasized the dignity of the individual, 
his resourcefulness, and has had essential reliance on the ability of 
individuals, in free association, to design affirmatively the main forms 
and directions of life. 

• See tables containins: this data, appendix, p. 251. 
124491— 39— pt. 1 12 



^gg CONCENTRATION OF ECONOMIC POWER 

Its basic legal institutions have included private property and free- 
dom of contract, with the collateral assumption of approximate 
equality of bargaining power. 

It has assumed acceptance of minimum but workable rules of law, 
■democratically determined, under which each individual, in pursuing 
his personal self-interest, would also serve the logical interest of the 
community. 

It has rested on a belief that there should be no long-term restric- 
tion of the international flow of goods, or the freedom of the individual 
to make economic decisions at his own risk. 

It has placed its faith in the function of price and the market 
mechanism as the best possible forces for the allocation of the re- 
sources and the determination of distributive shares to worker, in- 
vestor, owner, and risk-taker alike. It has had a concept of the free 
market as one which no buyer or seller could dominate. 

Implicit, but less well defined, have been assumptions of mobility 
of labor and capital, almost unlimited land and natural resources, 
that the economy and its population would expand indefinitely, and 
that all possible savings could be readily employed in natural expan- 
sion of facilities for serving consumers. 

Government, it has been thought, should intervene mainly to 
compel observance of working rules. 

Taken together, these assumptions, as I read them, have constituted 
the American competitive capitalistic system. 

EFFECT OF CHANGE ON BASIC ASSUMPTIONS 

Mr. Henderson. Throughout these last 2 days the charts, as Dr. 
Lubin and Dr. Thorp presented them, have vividly recorded and em- 
phasized change. Change — Change — Change. That has been the 
keynote right along. 

Outstanding change, and one which is of greatest importance, is the 
significant departure, since 1929, from our historical line of growth. 
This is most apparent from the course of industrial production since 
1929. No observer can overlook it, nor believe other than that as 
things now stand our growth has stopped. In terms of per capita 
production we are failing to hold our own, though the rate of tech- 
nological change holds its steady course. Some hold firmly to the 
belief that our economic ills are due to too rapid a rate of change, and 
the lag in social adaptation. 

What I have in mind about a departure from this line of growth I 
want to emphasize again. This line/ of course, has been constructed 
from a number of lines that give little emphasis to other depressions, 
which give an emphasis to the fluctuations that have taken place in 
the past but you don't have to be a professional chart reader, you 
don't have to be a digit hound, to know that something has happened 
in order that this particular line of activity should be recorded this 
way. In present terms, in terms of the diffif'ulties that the system is 
having in rising to full equilibrium, full employment, in terms of its 
possibilities, in terms of the violence of disturbance which takes place 
time after time, it is very evident that we are at a strategic place. 

Now it has become customary to talk about crossroads, and things 
like that. Emphasis, however, is sometinios dulled, but I think that 
in any consideration of whether or not we are in a really serious situa- 

' See exhibit No. "5, supra, p. 5. 



CONCENTRATION OB' ECONOMIC POWER Jgg 

tion, we need to give some attention to this question as to whether or 
not we have reached the top of our growth, whether we are in for a 
period of stagnation or dechne. 

One of the very, very noticeable observations to be made as to the 
course of activity in recent years under our complex mechanism is the 
inabihty of the system to maintain itself at any level which it has 
attained; that is, we do not stop, there is a constant shifting all the 
time. This halt is of extraordinary importance not only because of 
the deficits we have been outlining, but because it represents for the 
first time a major departure from the growth line in American industry. 

Senator King. May I interrupt -you right there, Doctor? What 
year does that chart indicate is the beginning of your line? 

Mr. Henderson. This chart, ^ which is the chart of the United 
States national income, begins with 1850. 

Senator King. Do you think that you have fairly represented on 
that chart the abrupt and disastrous decline from 1889, 1890, 1891, 
1892 and 1893, when we had hundreds of thousands and millions out 
of employment, and armies marching across the United States? 
Have you sufficiently indicated that on the chart? 

Mr. Henderson. As I indicated when I started, those dips have 
been smoothed because that is based, as I gather, on estimates of 
level of activity at 10-year intervals. 

Dr. Lubin. It is true, therefore, that even after making allowance 
for those dips, the trend was continued upward. In other words, 
we more than made up the loss. 

Mr. Henderson. That is the sweep, and if you had a projection of 
this curve it would be taking you in here, and that emphasizes all 
the more, as I indicated in my estimates, what the possible attain- 
ments of national income would have been had we kept on. It 
emphasizes how far off we are. We are at 62 billion dollars now; we 
should if that line of growth had continued, have been at 94 billions. 

Dr. Ljbin. In other words, each 10 years more than made up the 
loss of the preceding 10 years. 

The Chairman. Is that not illustrated by the lower line showing 
the per capita income, which indicates that at the depths of the recent 
depression in 1931, the per capita national income was slightly more 
than $300, which was in excess of the per capita income in 1900? 

Mr. Henderson. That is right. On the other hand, we were back 
at this low point, to the average of about 1911. 

I don't mean to linger too long on that, Mr. Chairman. What I 
would likejbo discuss is some of the changes that have taken place, 
rather to emphasize some of them that have taken place, on which 
our basic reliances were substantially rooted. The first one, of course, 
on which I will not linger long, is the passing of the frontier. There 
always seemed to the individual in his search for a means of livelihood 
to be the possibility of working free land. That has passed. 

There always seemed to be the. alternative of the production of 
natural resources of some kind. We know in terms of what the 
expense and losses are in the development of mining resources that 
this alternative is not available to the individual. We know, too, 
that as far as the natural resources of this country are concerned, 
they are already possessed, and largely under conditions of concen- 
tration of ownership. 

' Exhibit ^'o. 5, supra, p. 5' 



■y'JQ CONCENTRATION OF ECONOMIC POWER 

Dr. Lubin emphasized the growth of population, and Congressman 
Reece was adverting to what had taken place in terms of population 
as creating new markets. Most assuredly there was a period in which 
after each one of these dips, to which you referred, Senator King, the 
growth in population did seem to mean there were new people to be 
housed, there was a pressure on the housing we had, there was a 
pressure on the food supply, there was a pressure for expansion of 
credit, and this helped to make up the deficit. 

Now that has really in these terms disappeared. In fact, this thing 
we thought of as a competitive capitalistic system really had its 
greatest implementation by the growth in population. England's 
population quadrupled in the nineteenth century, that of the whole of 
Europe tripled, and tjie United States increased its population about 
fifteenfold. There were these increasing markets which enabled the 
individualistic system to make this growth. 

Today, with the leveling off of population, there are, it is estimated,. 
1,000,000 empty desks in our primary schools and Dr. Lubin has 
given an indication of what the trend of population may be. I hope, 
at some later time, to submit some figures to indicate what has hap- 
pened to immigration. I thought I would have them today. 

Senator King. Do those figures indicate whether those empty desks 
are in urban or suburban parts of the country? 

Mr. Henderson. I think they are in both. 

DECLINE OF COMPETITION 

Mr. Henderson. One of the outstanding things, however, has been 
a decline in the vigor of competition. Certainly, no observer would 
undertake to say that competition within the original concepts is per- 
sistent today. In fact, I am going to read what three observers say 
about competition, just as a point of departure for other observations. 

F. C, Mills, in his book, "Prices in Recession and Recovery", which is 
the outstanding study of this movement of prices, said, "Our economic 
fortunes and our living standards depend upon the working of a 
system still essentially competitive, and in our appraisal of economic 
ills we must recognize this fact." 

Then Arthur R. Burns, likewise, as is Dr. Mills, a professor at 
Columbia University, and author of the most outstanding book on 
this subject in recent years, "The Decline of Competition", begins on 
this note: "The rise of the 'heavy industries,' changes in methods 
of selling, and the widening use of corporate forms of business organi- 
zation are bringing, if they have not already brought, the era of com- 
petitive capitalism to a close." 

But another professor, an ex-head of the American Economic Asso- 
ciation, John Maurice Clark, before the Academy of Political Science, 
within the month said, "I believe, though I cannot prove, that capital 
must in the future adjust itself to a lower rate of return than it now 
considers reasonable, and to degrees of competition which it now con- 
siders unduly severe, or paralysis will follow, and capital will suffer 
along with all other interests. To put it the other way around, I 
believe, though I cannot prove, that if business gains the po\yer, 
through imperfect competition or otherwise, to protect what it sin- 
cerely regards by customary standards as a moderate and fair rate of 
return, and is not restrained from exercising that power, the result is 
very likely to be economic suicide." 



CONCENTRATION OF ECONOIMIC POWER 171 

I have chosen them because they are representative, as I have read 
them over a period of years, of the attitudes toward decline in com- 
petition. 

Certainly one of the assumptions that we had as to competition — 
that is, a number of small units — disappears in the terms of the material 
Dr. Thorp presented yesterday. Dr. Thorp did a careful, analytical 
job as to where concentration has taken place, the importance of size, 
and indicated, of course, that this thing which we had as an ancient 
idea about monopoly of. a single producer having control«of a market is 
no longer the tiling. We have two, three, or four dominant corpora- 
tions in an industry. 

Now, so far as the effect on the system is concerned, so far as the 
effect of the lack of competition is concerned, the question as to 
whether there is conscious control of a market through illegal means 
or whether or not that control is exercised, diverted, or subverted, is 
relatively unimportant. In terms of what you do about it it is im- 
portant, but if you are hit on the head with a hammer your hurt is 
just as bad whether it was an accident or whether somebody did it 
deliberately, or whether one person did it or three persons did it. 
You are likely to get even more of an impact if three persons are 
handling the hammer. 

So far as the problem before this committee is concerned, the slowing 
up of competition certainly is of great importance to know where it is 
taking place, to know what you may do about it. 

There are several ways of noting the disappearance of competition. 
Dr. Lubin showed the capacity for portland cement and showed that 
over a period of time that capacity had not been utilized.^ He also 
showed a rising tide of real wages, a tide that had continued in the face 
of the tremendous amount of unemployment that we have had.* 
Under any assumption of a system operating under completely com- 
petitive characteristics, neither one of them would be able to happen. 
That is, neither on the side of a lack of utilization of capital could you 
have that kind of thing taking place; nor could you have with the 
tremendous labor supply an increase in the rate of real wages so long 
as that supply was pressing on the market. 

Changes in selling practices, as Dr. Thorp emphasized, are some of 
the reasons why attention has been diverted recently to attempted 
controls and modification of the ruthlessness of competition in the 
distributive field. It is no accident, of course, that a lot of complaints 
which the Federal Trade Commission handles at the present time are 
in the distributive field, because we have perfected a mechanism for 
production. It is in the arena of the markets that the real battle is 
being fought out, and you find, of course, an increase in resale price 
maintenance, in the no-selling-below-cost laws, in the Robinson- 
Patman and Miller-Tyding kinds of acts. They reflect the diversion 
of the push that used to take place at the producing end of enter- 
prise, and is now being focused on distribution. 

Price leadership, something pr«^«ticall3^ unknown in early days when 
these concepts were being formed, has come into existence. And these 
duopolies and triopolies and oligopolies, and all other kinds of things 
which are supposed to have substituted themselves in the market for 
monopolies, make it really tremendously easy for price leadership to 

' See exhibit No. 23, supra, p. 34. 
' See exhibit No. 47, supra, p. 61. 



;|72 CONCENTRATION OF ECONOMIC POWER 

take place— price leadership which is something not always easily 
proved to be something which is the result of conscious efforts or any 
kind of agreement or concert as between the dominant parties. 

Mr. Patterson. Mr. Henderson, may I interrupt there? Under 
this price leadership, it is no great secret as to which industries have 
price leadership. 

Mr. Henderson. No; T think it is pretty well recognized. I don't 
believe anybody that had any extended experience with N. E. A. 
would feel that there was any secret. 

Mr. Patterson. Can you name some of them? 

Mr. Henderson. Certainly when you get a situation where there 
is a posting of prices every 3 months in the steel industry and the rest 
follow you have price leadership. You get it in agricultural imple- 
ments, you get it in the can industry, you get it in anthracite coal, 
you get it in such things as crackers. 

Mr. Patterson. Gasoline? 

Mr. Henderson. Gasoline. There is very definitely a price leader- 
ship which is made all the more possible when you get a cluster, when 
you get three or four dominant units in an industry, each of which is 
aware that any kind of change that it makes in its pricing policy is 
going to be reflected in the pricing policy of another. It may lead 
them to take certain actions, or to refrain from taking certain actions 
that the market was expected to enforce under these original concepts 
I have outlined. 

Kepresentative Sumners. Will you make a statement as to how 
they make effective price leadership, that you will put into the record? 

Mr. Henderson. No; because I think- we want to make a con- 
siderable study of that in the committee. 

Senator King. Some of this is in the distributive system, after the 
commodity, passes out of the control of the manufacturer. 

Mr. Henderson. Yes; there is some. There are all kinds of local 
interference. Mr. Arnold runs into that time and time again in the 
local markets, in the attempt to maintain prices. Undoubtedly the 
Federal Trade Commission also meets it at almost all avenues of 
distribution. An outstanding example, T think, was in the hearings 
on the old-basing-point bill, the so-called Wheeler bill, where an official 
of one of the steel companies just said, "Of course we lead on prices,. 
and the rest follow them." That was not something in which, pre- 
sumably, legal action could be taken. They were known to be one of 
the largest producers in the industry. 

Mr. Oliphant. Is your present interest in price leadership as such 
merely price leadership as one form in which prices manifest 
themselves? 

Mr. Henderson. I am indicating that this thing we know as price- 
leadership is really a diversion from the effect of, well, I hesitate to-j 
say "pure com.petition" 

Mr. Oliphant (interposing). Did the figures introduced as to the-j 
extent of concentration, the number of these clusters of concentration^ I 
indicate the extent of adm.inistered prices? 

Mr. Henderson. I think we are- going to have enough material on 
prices and their relation to dominance in the market to make up 
several days of hearings, Mr. Oliphant, and I would rather let it go- 
until then. 



CONCENTRATION OF ECONOMIC POWER I73. 

Another thing which comes to mind which is of great importance in 
the setting aside of competition is the importance of overhead costs ;^ 
that is, the fixed costs, the tremendously large am.omit of capital in- 
vestment that is necessary in these producing groups. That gives 
you a kind of debt structure, a capital structure; it gives an import- 
ance to overhead in cost accounting which gets magnified and is par- 
ticularly magnified in times of great stress. For example, there is 
one product where I know the cost at 30 percent of capacity is about 
$2Cr per ton, and as you get up to about 80 percent of capacity, it is 
only about $5 a ton. That leverage there is possible only due to the 
shift in the importance of overhead costs, as overhead costs can be- 
distributed over a larger amount of the product. 

There is a suggestion in this importance, however, of overhead costs 
and their relation to break-even pomts which I think invites the atten- 
tion of this coro.mittee. The pressure for efficiency in m.anufacturing- 
enterprises leads to the a 'empt to break even at a very, very low point, 
and a number of industi.vs, notably the outstanding ones, have got 
down where their overhead costs and out-of-pocket costs are actually 
covered at around 50 percent of production, and so business policy, 
production policy and price policy get geared to that kind of concept. 

On the other hand, if you add up to 50 percent of employment for 
that industry, 50 percent for every other uidustry, what you have i& 
50 percent unem.ploym.ent, so you have a constant clash between the 
necessary drive for efficiency on the part of the indi\ddual enterprise 
and its conflict with the demand that we have full production. When 
you have other intervening factors which pernut a group, an individ- 
ual enterprise, to make the kind of decision where it will choose to break 
even at a low point rather than moderate its production and price- 
poHcies, you are almost bound to have a concomitant of unemploy- 
ment. So there is a basic clash. 

I say this, Mr. Chairman, without any invidiousness, to point out, 
however, that there is that clash constantly between the American 
drive for efficiency and the American necessity for full employment, 
and somewhere in there the competitive spirit has lost its drive to make- 
the adjustment. 

Representative Sumners. How is there a conflict between efficiency 
and this drive for more employment? 

Mr. Henderson. When you have, as many industries have, worked 
down your ability to cover your costs, you see, at say 50 percent of 
production, you are in a much easier status when you are under 
pressure of a declining market. 

Representative Sumners. But suppose you have some competitor 
who will gear up his production, and then isn't your per unit coat 
higher in proportion as you reduce your capacity to produce? 

Mr. Henderson. That is what I mean by "break-even" poin^. 
You put your finger right on it, Judge. The reason 3^ou can have 
break-even points in individual mdustries at 50 percent is because 
there has been a setting aside, or the absence of this competitor who 
will come in and compete on a price basis. You get tliis kind of an 
understanding that goes either by concert or general understanding 
of the market, or goes by transference of thought and things like that — 
all that pervasiveness of ideas which runs so different from what we 
are taught to expect to take place under competition. 



174 CONCENTRATION OF ECONOIMIC POWER 

Representative Sdmners. Take agricultural prices, and they are 
fixed ordinarily in the open competitive market, without regard to the 
cost of production or pre/it. Now, then, when those prices go down 
and other prices are held up, don't you break the trade contact between 
(hose people with the lower production, and these people who ar- 
bitrarily hold prices up? They can't be exchanged, it seems to me. 

Mr. Henderson. That is right. I think Dr. Lubin's chart on the 
relationship between labor income and other income very definitely 
emphasizes that.^ 

Mr. Oliphant. This may be elementary to you, but I want to be 
sure on it. You are talking about a business so situated that when 
it has worked its costs down so that they are covered by operating at 
50 percent of capacity, then, in the absence of effective competition, 
their temptation is to hold prices up, not to cut prices. Is that what 
it was? 

Mr. Henderson. That is right, and it is an individual business 
decision which in terms of the individual business is highly proper. 

Mr. Oliphant. Is this academic, or have there been businesses in 
recent times which have chosen to hold prices up? 

Mr. Henderson. There is no doubt the decision has been made. 
I think I ought to say, however, that I am not speaking as to the 
possibilities of reducing prices and getting a larger market. I am 
saying, however, that in terms of the price that exists normally, it 
would not be possible in a perfectly competitive arrangement in that 
industry, to get a break-even point at that level, and I am further 
saying, Mr. Oliphant, that no S5^stem in which that particular kind of 
possibility is dominant can avoid having unemployment. That is 
my point. 

Representative Sumners. Mr. Henderson, it seems to me there is 
another important point involved right in there. I am not an 
economist, but I know as a matter of practical common sense that all 
our industries are interrelated and they make up one economic body, 
make up a whole. Wlien you take a considerable group of our 
people, like the farmers, who haven't been able to sell at cost plus a 
profit, or sell to the highest bidder, when you take a situation where 
they are a part of the economy, and they get where their prices are 
v^ay down low and other prices are held up arbitrarily, you are bound 
to have economic paralysis, it seems to me; when you paralyze the 
buying power of 30,000,000 persons on farms, that paralysis has to 
extend up through the whole economic body, and as a rather practical 
proposition it seems to me this committee in its study should either 
consider trying to fix it so everybody can do this thing arbitrarily or 
nobody shall. 

Senator King. Don't you think there is competition among 
farmers? 

Representative Sumners. They are competing for the opportunity 
to sell. 

Senator King. Some farms are more productive than others, and 
some methods of production by farmers are more economical than 
others, so that among the agriculturists themselves you have a 
str-uggle there of competition to produce cheaper and to find, of course, 
wider markets. 



' See exhibit-No. 14, supra p. 21. 



CONCENTKATION OF ECONOMIC POWER 175 

Mr. Arnold. Your point is illustrated, is it not, by the fact that 
there isn't any break-even point in agricultural products? 

Mr. Henderson. The break-even point in agriculture is illustrative 
of what happens in an area that is predominantly competitive. Under 
the competitive system your break-even point will be only a little 
bit short of, and sometimes will not actually arrive at, cost, you see. 
And as a result, jou have a pressure all the time for more production, 
and that would supposedly be one of the real benefits of the com- 
petitive system; when you get areas in which there is not that pres- 
sure, either by concert or by general understanding, you can work 
your break-even level down. You don't have an intensity of cora- 
petition such as was pervasive in the early days or is pervasive in 
agriculture. 

I am noting it as a condition without attempting to attach any 
particular blame for it. 

Senator King. Isn't the status of the agriculturist so far as obtain- 
ing profits or lack of profits in part, though, resting upon the foreign 
market, so that when you cut off this foreign market through high 
tarifl's or through any other reasons, I will not explain what they 
may be, you are bound to affect his economy and reduce his market, 
and of course reduce his purchasing power. And that, as Judge 
Sumners says, is carried forward and affects the w^hole economic 
structure, because of the interrelation between industry and the farm 
communit}^? 

Mr. Henderson. I would grant that, and I think it is something 
we have got to look into, but what I was instancing here was, how 
there has been what is called a revulsion against risk, and how we 
have fashioned kinds of instrumentalities and modes of thought 
which have enabled us to set aside the rutlJessness of the market. 
The market was expected to be a pretty ruthless kind of thing, and 
it was never possible to tliink in terms of real competition and 11,000,- 

000 unemployed at the same time. That is the closest statement 
that I can make of it. Any time that 3-ou have got a condition of liigh 
unemployment or failure to use your resources, it is very evident 
that the old assumptions of the competitive system arc not at work. 

1 am not attempting at this point to say whether or not you can 
restore them. I am merely saying that so far as these assumptions 
that I have laid down are concerned, it is not possible to think of them 
in terms of the failure to use our resources. 

Mr. Olipiiant. When you say they are not at work, do you mean 
they are not at work or not wholly at work? I want to come back 
to that. As I understood your thought, our trouble is not that part 
of the price structure is inflexible, Mr. Congressman. Our trouble 
is that it isn't either all inflexible or all flexible. 

Representative Sumners. That is pretty near the statement, yes. 
I was making the observation that we have to, I believe, make a 
study of making it all flexible or reducing the flexibility in some of it. 

Senator King. In view of the fact that you have referred to the 
farmers frequentlj^, and very properly, and I have referred to them, 
too, I want to emphasize the point that the unfortunate situation 
of the farmer is in part due to the loss of markets. You come to the 
cotton field. You produce a vast amount of cotton. We used to 
sell 60 percent of our cotton abroad. We had several million bales 



175 CONCENTRATION OF ECONOMIC POWER 

sold abroad. Now, by reason of tariffs or otherwise, and I will not 
go into the reasons, we have cut off largely our farmers from their 
export market, and that has had serious repercussions among the 
farmers, and of course where they lose their profits there are bound 
to be serious repercussions in all other aspects. 

Mr. Davis. Referring to "C," subsection 6, on page 2, division 
II of your statement, you say "Rise in collective effort — 'revulsion 
against risk' ." Is it not your observation that in many instances 
there has not only been a revulsion against lisk of loss, but a revul- 
sion against receiving no more than a moderate profit? 

Mr. Henderson. Judge, if I would let all 12 of the members of this 
committee phrase my observations we might get a collective state- 
ment but I am afraid it would not -be wh.nt I would make. 

Representative Sumners. In view of the fact that I have been 
one of the chief interrupters. I am not embarrassed by making the 
suggestion that we had probably better let the witness go ahead. 

The Chairman. I think the suggestion is a very good one, if we 
wdll allow Mr. Henderson to proceed without interruption, and then 
those who may desire to question him at the conclusion of the state- 
ment will be given the floor in turn. 

Mr. Henderson. I have listed a decline in the concept of possible 
control through monetary policy. Some day if I need a decoration 
for bravery, I will point to the fact that I did make this listing, be- 
cause there are so many who believe that in monetary control and its 
possibilities there is some magic push button. It seems to me at 
times, so far as the monetaiy control theorists are concerned, that they 
not only belieA^e the ■ monetary base is something you could rest 
Archimedes' lever on, but that it is Archimedes, the lever and the 
base all together. It is expected to be automatic in its working. 
Any observer of the experience with the interest rates andwith the 
open market operations in recent times can have no real basis for 
feeling that unemployment can be dispensed with or that production 
at its fullest possible heights can be attained by some kind of monetary 
monkeying. That is the only observation I want to make on that. 

I have list-ed, also, the question of the interference with the basic 
assumption that there would be no long-term restraint on the flow 
of international trade. The liistory of tariff policy since the early 
days, since the beginnings of Alexander Hamilton's ideas of what was 
the basic need of production for industiy , is well known to most people. 
Certainly so far as the assumption is concerned that we would have a 
possibility of alternative sources in competition from the outside, 
which would be in a measure a jwliceman, as against our own industries 
and a protection against a lack of competition or a dulling of its edge, 
the flow of international trade has not offered the kind of guarantee 
that would be assumed under any conditions. 

1 mentioned, in my list, something that was emphasized earlier, 
and that is, that we have had no new industries recently. There has 
been nothing which would reall}^ give us the kind of vigorous employ- 
ment, the expansion of numerous activities, that Dr. Thorp listed 
yesterday, and there doesn't seem to be immediately over the lior ;con 
anything that would take the place of an automobile industry. 

There is that possibility, that one of these days we may do something 
about housing and get it organized and pointed directly toward what 
is the insistent demand for proper housing in this country. 



CONCENTRATION OF ECONOMIC POWER 177 

EXCESS OF SAVINGS OVER NEW INVESTMENT 

Mr. Henderson. I want, however, to pay a little bit of attention 
to this question of the excess of savings over new investment and 
capacity to produce, because it seems to me that is the nexus of the 
problem with which we are confronted. 

There are several ways of measuring this thing we call mvestment 
and savings. Sometimes you can measure it in physical goods, 
which is j^our capital formation side; sometimes j^ou can measure 
it in terms of dollars. Unfortunately the dollar measurements are 
nowhere near as good as the physical measurements at the present 
time. Somewhere between 15 and 20 billion dollars of the national 
income, when we were around 70 to 80 billion dollars, was available 
for savings of some kind. 

Now, in the days when we were expanding, in the days when it was 
considered necessary to get European loans, in the da^^s prior to the 
war, when there was a tremendous amount of demand for expansion 
of capital, we had no difficulty with this thing kno\\ai as savings. 
They do constitute a difficulty now, and I am not going to try at this 
time to indicate how that problem may be solved. 

I do want to point t)ut that their very presence constitutes a problem. 
That is, the fact that year in and year out savings go on and must 
find some outlet is really important. Now, we have tended to magnify 
the importance of the durable goods, and properly so. But in durable 
goods I think we ought to note that so far as the ordinary use of 
savings is concerned, it was customaiy in the 1920's to spend about 
38 percent of our savings on producers' goods, that consumers' dura- 
ble goods in the way of houses and automobiles took about 52 per- 
cent of that, and public works took about 10, 

Of course, another thing that has been overemphasized, which 
needs to be recorded as a fact for consideration, is that during the 
whole of 1923 to 1929 period, in ever\^ $3 of investment in plant and 
equipment about $2 was produced by the savings corporations them- 
selves, either through their depreciation account or through their own 
surpluses; about $1 out of every $3 came from the outside. 

In other words, the capital market was being tapped something 
like this: There would be, say, $6,000,000,000 each year which would 
be spent by industry itself, and $3,000,000,000 which would be 
secured as new capital from savers entirely outside of that group. 

In 1937, when we had reached this kind of thing, ^ 90 percent of 
the financing of the production of durable goods, so far as it related 
to machinery, equipment and things like that, was coming from either 
depreciation' account or was coming from the retained earnings of 
the corporations that had been accumulating over a period of time. 

That question of the rate of savings invites a very, very real ques- 
tion that I am going to discuss and I am going to draw a little bit on 
the English experience for it. The English have, I expect, a httle 
better estimate of what the savings in relation to national income is 
than our own. They show that around 1907 they were saving maybe 
12 percent of their national income; in 1924 that had dropped to 8.1 
in 1929itwas7.2;in 1935 it was 6.9 percent. The significance lies in the 
fact that since 1924, and since 1929, the amount of savings which the 
English system was making was considerably less than our own and 
was considerably less than had been the situation in earlier times, and 

' See exhibit No. 86, supra, p. 151. 



178 CONCENTRATION OF ECONOMIC POWER 

yet England, we know, has had a kind of recovery that we liave not 
expel ienced here, and which few other countries have experienced. 

Now, the financino; of that did not come from their national savings, 
and I want to read one observation in order that I may have it abso- 
lutely correct, of the outstanding observer of that particular plie- 
nomenon, a phenomenon whereby England had recovery with a 
diminishing savings. 

Colin Clark, in his recent book,' says: 

* * * I believe the facts have destroyed the view up till now generally pre- 
valent, i. e. that the rate of economic growth was primarily dependent upon 
the rate at which capital could be accumulated. The very rapid expansion in 
productivity at the present time is taking place at a time of heavily diminishing 
capital accumulation. What is more remarkable, practically none of the capital 
which is being saved is being put into productive industry proper. 

In other words, what seems to be taking place so far as England is 
conderned is that they are not having the tremendous unbalance 
between the amount of purchasing power that is produced through 
the producing organization and the amount which is being expressed 
as consumer claims to those goods. In the setting up of the idea of 
derivation of purchasing power it is evident that the final price that 
is paid is made up of payments that have been made in wages to 
salaried people, payments that have been made for materials, and a 
part which is retained as depreciation or as retained earnings of the 
corporation. 

To the extent that all purchasing power produced does not get into 
the market, we are likely to have difficulty. In earlier daj^s there 
was no difficulty because any amount saved seemed to be automati- 
cally required, and that was one of the assumptions upon which this 
fast, vigorously expanding competitive system of ours rested. There 
has been this shift to the extent, as I say, that we have fifteen or 
twenty billion dollars of savings here, a much higher rate than the 
English, without the demand for so many billions. We alwa3^s had 
the assumption that high rates of saving were necessary, that the 
rate of progress was determined by the rate of savings, but in recent 
years we have had the dilemma of a seeming surplus of savings. 

I hope, Mr. Chairman, that I have avoided as many controversial 
issues as possible, but I thinlc that any concept of how we can get 
to 140 in the index of production, or get to 88 to 94 billions of dollars 
in national income, has got to take into account the flow of, incomes, 
it has to take into account what is the balance between purchasing 
power produced and the purchasing power spent at the receiving 
line, because somewhere la there is the nexus of a very, very real 
problem, and if you have the explanation of it, it would probably 
show why durable goods fall much more than do the nondurable, 
which are immediately consumed for the most part. 

Mr. Davis. Mr. Henderson, can you give us the approximate latest 
figures during a normal year of the relative amount of the sales of 
durable and of nondurable goods? 

Mr. Henderson. I can give it to you. I have charts for that.- 
I haven't got it in dollar terms. 

The Chairman. May I suggest that yoii put the answer to the 
question in at the conclusion? We will let him proceed. Judge Davis, 
if you please. 

' National Income nnd Outlay. 

? Exhibits Nos. 86 and 87, supra, pp. 151 and 153. 



CONCENTRATION OF ECONOMIC POWER 179 

IMr. Henderson. Another factor which has been a dislocating 
factor and has affected our basic assumption, of course, is the rise of 
consumer debt. In 1923, at the end of the year, we had about 
$4,900,000,000 of consumer debt; at the end of 1929 we had 
$8,800,000,000; at the end of 1933 this had got down to about 
$5,500,000,000; by June 30 of 1937 it had risen above $8,700,000,000. 

That factor of new credit that is available, that is made available 
to consumers in such large amounts, is a factor which needs to be 
reckoned with in any consideration as to a competitive system. Its 
dislocating ability on the down side, its accelerating effect on the 
up side, is something which is only partially understood, and certainly 
a dislocation has taken place there of which we know very, very little. 

Senator King. That is the utiliziation of capital, however? 

Mr. HENDE.RSON. The utilization of savings. It is not always 
technically that, if you are able to create bank credit. It has to be 
supported, however, paid off by savings at some time. It has to be 
paid off by savings eventually, or else 

The Chairman (interposing). There is a crash. 

Mr. Henderson. "Repudiated," is the right word. I listed, Mr 
Chairman, among the things that have set aside, or moderated, the 
concepts of competitive capitalism, government intervention, and I 
don't believe that we need to go into an expanded definition of that. 

Certainly the assumptions that we have had in the early days as 
to the place of Government was that of the umpire and as of the 
enforcer of rules, and it was felt that the least amount of intervention 
consistent with the maintenance of order was the best possible thing 
for competitive enterprise. 

A list of Government intervention here and abroad would reach 
higher than Dr. Thorp pointed to yesterday with that pointer of his, 
and I am not prepared to go into it, but I think you will see, when 
we come to the outline of study, that we are taking note of Govern- 
ment intervention of all kinds. 

I would like to point out, however, that Government intervention 
is not a new thing. It began in the early days of the tariff, it was of 
particular assistance in the expansion of railroads and toll gates; it 
takes form in the peculiar kinds of grants that come under corpora- 
tions and patents, the expansion of tariffs, licenses, franchises, and 
things like that. 

There was constantly what might be called a translation of the 
community's own property in terms of something that could be 
converted into purchasing power. When there was a grant of land 
it was possible to convert that into purchasing power, and it was only 
by means of conversion of that into purchasing power, for the employ- 
ment of men and purchase of materials, that you really got an ex- 
pansion. 

All these that I have listed would constitute a partial list only of 
what has been done in the way of setting aside the American system 
of competition. 

PROBLEMS CONFRONTING T.N. E.G. 

Mr. Henderson. Many questions keep bubbling up from even the 
most casual consideration of the task. A full set of questions ade- 
quately phrased would be an admirable basis for outline of study and 
investigation. I cannot say that such a full set of questions is avail- 



180- CONCENTRATION OF ECONOMIC PO\AER 

able. I can, however, state several which seem to indicate the greatest 
perplexity and in making this list I have not relied upon my own 
observation, though, of course, I am responsible for the selection. 

The joint resolution which created the committee raised the basic 
interrogations.^ By specific direction, the resolution includes within 
the frame of references the President's message to Congress of last 
April, Senate Document No. 173, Seventy-fifth Congress, third session, 
which is entitled "Strengthening and Enforcement of Antitrust Laws."^ 

In directing an investigation Congress has seldom had such a spe- 
cific outline of the matters of reference. A part of the list of questions 
flows naturally from the ideas of the 12 members of the committee and 
their alternates, as I have come to know them myself, as well as the 
observations of advisers and assistants who are counsehng upon or 
directing various studies under assignment from the committee. 

In phrasing the questions I have not ignored ideas expressed in 
significant studies relating to competition or the observations by 
commentators to whom the subject matter of this inquiry is naturally 
a fertile field. 

The over-all question seems to be. Why have we not had full employ- 
ment and full utilization of our magnificent resources? Specific 
questions, however, are more directly pointed at the target. 

These would include, without limitation or invidiousness: 

What is the present status of competition? Has it lessened? Is 
the lack of self-adjustment of the economy due, wholly or in part, to 
decline in competition? 

Can this country rely in the future on competition as the main- 
spring of its economic system? If so, what changes are necessary in 
public and private policy to make competition effective? If not, what 
are the alternative organizing forces available? Is the choice neces- 
sarily between full competition and full planning? 

To what degree and in what areas has competition as the regulating 
force been set aside? 

Are prevailing price and production policies implicitly based on 
vigorous price competition? To what extent is competition through 
development of the product a satisfactory substitute for price com- 
petition? 

What are the wastes in the distributive system? 

What devices, mechanisms, policies and organizational forms have 
been consciously utilized to defeat competition? 

In what particular are the antitrust laws inadequate? 

Is the lack of competition always due to conscious efforts, or are 
impersonal elements and forces also responsible? 

Can economic effort be- divided- into monopoly and competition? 
Are both sometimes present? Does overcompetition exist? 

What part has concentration played in the decline of competition? 
What part has size played? Is concentration on the increase? Is con- 
centration an inevitable consequence of a developing industrial or- 
ganization? Of the corporate form? What are proper standards for 
corporations doing interstate business? 

Does concentration affect adversely or favorably the distribution of 
income? The efficiency of output? Is economic activity affected by 
the character of income distribution? 



' See exhibit No. 2, appendix, p. 192. 
' See exhibit No. 1, appendix, p. 185. 



CONCENTRATION OF ECONOMIC POWER ' JgJ 

What results are expected to flow from competition? Can tests be 
constructed in terms of these expected results for measurement of ac- 
complishment of industrial organizations? ^ Could such tests be used 
to measure effectiveness of economic organization in cases where com- 
petition has legally been modified or set aside? Can these be applied 
to organizations of workers? 

How flexible is the economy? Where is it inflexible? What stand- 
ards of desirability of flexibility can be framed? 

Why has new investment lagged? Is this lag. likely to continue? 
Has the forward drive of the American economy stopped? Have we 
witnessed the end of our dynamic mass production, lower price, mor© 
employment policy? Are we in for stagnation or decline? What is the 
proper function of government in periods of underinvestment? Is gov- 
ernment debt ■different from personal debt? Under what set of eco- 
nomic conditions can savings be absorbed? What is the influence of 
the present rate of return on investment? 

Are our liberties endangered by the growth of private control? Is 
there a relation between collectivism in private industry and collec- 
tivism in government? How can the dignity and importance of the 
individual be enhanced by choices of economic policies? Should the 
Government intervene to afl'ord the individual businessman a better 
status in competition? 

TMiich segments of the economy have managed their prices and 
production? In which have these possibilities meant fewer jobs? 
What effects have patents had upon expansion of production? 

What has been the record of success of government intervention in 
the various economic processes here and abroad? 

Out of those questions, as they resided in the resolution, as they 
resided in the members of this committee, of course, Mr. Chairman, 
there was a first assignment of jobs to six agencies. The committee 
at its second meeting made an assignment to the six agencies that came 
in, and said, "We believe in terms of this resolution we can do this 
kind of job better from our own experience or from assignment from 
you as to some specific thing on which we believe you will need 
information." 

With that as a base, and for the purpose of giving the widest amount 
of circulation to what this committee has outlined so far, and what are 
some of the things which seem to be immediately over the horizon 
which need study, I have undertaken to set down, as the last part of 
my statement today, what I consider the main Imes of study that are 
indicated by the resolution and by these questions which I have raised. 

I would say, offhand, that I do not need to read that. 

The Chairman. I think that could very properly be put in the 
record. Without objection, this analysis of the main lines of study 
as indicated, will be inserted in the record at this point. 

(Following is the material indicated for inclusion in the record.) 

MAIN LINES OF STUDY INDICATED ' 

A. Concentration and control. Facts. Its causes. Over-all and specific 
industry studies. In natural resources, insurance, financial institutions, trans- 
portation, communications, distribution, etc. Patterns of control. Effect on 
competition, as shown by Government purchasing, price behavior, opportunities 
for entry by individuals and small enterprises, new investment and expansion. 
As related to costs, technical progress, labor policy, individual firm stability. 

' Not all by Temporary National Economic Committee. 



182 CONCENTRATION OF ECONOMIC POWER 

B. Price system and price policies. Patterns. Changes from competitive 
assumptions. Effect on general level of trade, and on demand for specific prod- 
ucts. On long-time profits, consumption. Maintenance of prices versus main- 
tenance of emplo3'ment. Patterns and standards of desirability in rigid and 
flexible prices. The problem of balance. 

C. Effect of governmental policies. 

1. Specific policies; as named by resolution. 

(a) Taxation: Burden on industries, relation to expansion and lack of new 
investment. As stimulus to activity. 

(b) Patents, pools, specific abuses. Place in competitive enterprise. Liti- 
gation: Costs, duration, effect on small enterpriser. Delays in granting pro- 
cedure. Division of ownership: Individuals and corporations. Utilization and 
suppression. As stimulus to activity. Key patents. Place in technological 
displacement. 

(c) Adjustment of purchasing power to 1926 price level. 

2. Government policies not specifically named by resolution. 

(a) Compensatory fiscal policies. 

(b) Governmental intervention; corporations, loan agencies, etc. 

(c) Foreign trade, reciprocal trade agreements. 

(d) Agricultural program. 

(e) Housing. 

(/) Governmental regulation. Lessons to be drawn from experience of Inter- 
state Commerce Commission, Coal Commission, Securities and Exchange Com- 
mission, Federal Power Commission, Maritime Commission, Labor Board, Wage 
and Hour, Walsh-Healey, Federal Communications, etc. 

(g) Social security. 

(h) Results of other legislative committee studies: Munitions, holding com- 
panies, etc. 

D. Bureau of Industrial Economics. 

E. Socially and economically harmful competition. 

F. Improvement of a»titrust policy and procedure. 

1. Codification of law as to restraints of trade, etc. 

2. Procedural study: Investigation, enforcement, adjudicative processes. 

3. Studies of foreign experience, relations of government and business abroad. 

G. National standards for corporations. 

H. Mergers, interlocking relationships, industrial, utility and bank holding 
companies, investment trusts. 

I. Insurance companies. Organization, practices, importance in economy, 
investment policies, etc. 

J. Corporate practices. Existing forms of business organization, trade associa- 
tions, alternative forms. 

K. Distribution. Marketing laws. 

L. Credit mechanisms for small enterprises. 

M. Over-all economic data and special studies. Consumer credit. Labor 
racketeering. Break-even points. Depreciation and cost accounting. Debt 
growth. 

Mr. Henderson. I would like to emphasize, in putting: that in, 
Mr. Chairman, that I think it is highly desirable, because it -svill let 
people know the kinds of things that we are interested in. 

In these statements by Dr. Liibin, Dr. Thorp, and myself, we have 
attempted to- survey the situation in which the Nation finds itself 
today in terms of those fuhdam.entals which are at once the objective 
of any system of economic organization and the test of its success. 

We have tried to show the relationship between these fundamentals 
and the simple essentials of everyday life. Necessarilj^, the problems 
and the significant facts have been presented in broad and general 
terms. There are notable omissions of discussion related to necessary 
adjuncts to the productive system, such as transportation, communi- 
cations, financial institutions, and so forth. 

But, in order that we may devise workable solutions of production 
and distribution problems on the basis of the facts, we must at all 
times bear in mind that the American economy is a vast and complex 
organic growth ; that each industry, and, for that matter, each business 



CONCENTRATION OF ECONOMIC POWER 183 

enterprise within an industry, is likewise an organic growth; and that, 
in consequence, to deal with national problems intelligently, we must 
approach them in much the same way as medical science approaches 
the problems of the human body, and not of original sin. 

Naturally, any attempt at a full description of the anatomy of all 
American industries within the compass of these hearings is out of 
the question. The intention, therefore, is to present by reports and 
hearings a series of typical situations, drawn from different industries, 
and illustrating different problems. 

The underlying connection among these varied situations will be 
their significance as living instances of the complicated and dynamic 
process which constitutes American industry. For their value as 
representative examples, naturally the research staff must take fuU 
responsibility. 

The Chairman. Are there any questions to be asked? The com- 
mittee, when it does stand in recess, will recess imtil 10:30 o'clock on 
Monday morning. 

Are there any announcements that it is desirable for the chairman 
to make at this time? If there are nc> announcements to be made, 
the committee ^^iU stand in recess until Monday morning at 10:30 
o'clock. 

(Whereupon, at 12:35 p. m., an adjournment was taken until 
Monday, December 5, 1938, at 10:30 a. m.) 



I?1i91~39— pt 1- 



APPENDIX 

Exhibit No. 1 

IS. Doc. No. 173, 75th Cong., 3d sess.] 

Message From the Pbesident op the United States Transmitting Recom= 
mendations relative to the strengthening and enforcement of anti- 
TRUST Laws 

To the Congress of the United States: 

Unhappy events abroad have retaught us two simple truths about the liberty 
of a democratic people. 

The first truth is that the liberty of a democracy is not safe if the people tolerate 
the growth of private power to a point where it becomes stronger than their demo- 
cratic state itself. That, in its essence, is fascism — ownership of government 
by an individual, by a group, or by any other controlling private power. 

The second truth is that the liberty of a democracy is not safe if its business 
system. does not provide employment and produce and distribute goods in such 
a way as to sustain an acceptable standard of living. 

Both lessons hit home. 

Among us today a concentration of private power without equal in history 
is growing. 

This concentration is seriously impairing the economic effectiveness of private 
enterprise as a way of providing employment for labor and capital and as a way 
of assuring a nlore equitable distribution of income and earnings among the 
people of the Nation as a whole. 

I. THE GROWING CONCENTRATION OF ECONOMIC POWER 

Statistics of the Bureau of Internal Revenue reveal the following amazing 
figures for 1935: 

"Ownership of corporate assets: Of all corporations reporting from every part 
of the Nation, one-tenth of 1 percent of them owned 52 percent of the assets of 
all of them. 

"And to clinch the point: Of all corporations reporting, less than 5 percent of 
them owned 87 percent of all the assets of all of them. 

"Income and profits of corporations: Of all the corporations reporting from every 
part of the country, one-tenth of 1 percent of them earned 50 percent of the net 
income of all of them. . 

"And to clinch the point: Of all ttie manufacturing corporations reporting, less 
than 4 percent of them earned 84 perx;ent of all the net profits of all of them." 

The statistical history of modern times proves that in times of depression 
concentration of business speeds up. Bigger business then has larger opportunity 
to grow still bigger at the expense of smaller competitors who are weakened by 
financial adversity. 

The danger of this centralization in a handful of huge corporations is not 
reduced or eliminated, ais is sometimes urged, by the wide public distribution of 
their securities. The mere number of security holders gives little clue to the size 
of their individual holdings or to their actual ability to have a voice in the man- 
agement. In fact, the concentration of stock ownership of corporations in the 
hands of a tiny minority of the population matches the concentration of corporate 



The year 1929 was a banner year for distribution of stock ownership. 

But in that year three-tenths of 1 percent of our population received 78 per- 
cent of the dividends reported by individuals. This lias roughly the same effect 
as if, out of every 300 persons in our population, 1 person received 78 cents 
out of every doUar of corporate dividends while the other 299 persons divided 
up the other 22 cents between them. 

185 



IgQ CONCENTRATION OF ECONOMIC POWER 

The efifect of this concentration is reflected in the distribution of national income. 

A recent study by the National Resources Committee shows that in 1935-36 — 

"Forty-seven percent of all American families and single individuals living alone 
had incomes of less than $1,000 for the year; and at the other end of the ladder a 
little less than 1% percent of the Nation's families received incomes which in 
dollars and cents reached the same total as the incomes of the 47 percent at the 
bottom." 

Furthermore, to drive the point home, the Bureau of Internal Revenue reports 
that estate tax returns in 1936 show that — 

"Thirty-three percent of the property which was passed by inheritence waa 
found in only 4 percent of all the reporting estates. (And the figures of concen- 
tration would be far more impressive, if we included all the smaller estates which, 
under the law, do not have to report.)" 

We believe in a way of living in which political democracy and free private 
enterprises for profit should serve and protect each other — to insure a maximum 
of human liberty not for a few but for all. 

It has been well said that, "The freest government, if it could exist, would not 
be long acceptable if the tendency of the laws were to create a rapid accumula- 
tion of property in few hands, and to render the great mass of the population 
dependent and penniless." 

Today many Americans ask the uneasy question: Is the vociferation that our 
liberties are in danger justified by the facts? 

Today's answer on the part of average men and women in every part of the 
country is far more accurate than it would have been in 1929 for the very simple 
reason that during the past 9 years we have been doing a lot of common-sense 
thinking. Their answer is that if there is that danger it comes from that con- 
centrated private economic power which is struggling so hard to master our 
democratic government. It will not come, as some (by no means all) of the 

Sossessors of that private power would make the people believe — from our 
emocratic government itself. 

n. FINANCIAL CONTROL OVEE INDUSTRY 

Even these statistics I have cited do not measure the actual degree of concen- 
tration of control over American industry. 

Close financial control, through interlocking spheres of influence over channels 
of investment, and through the use of financial devices like holding companies 
and strategic minority interests, creates close control of the business policies of 
enterprises which masquerade as independent units. 

That heavy hand of integrated financial and management control lies upon large 
and strategic areas of American industry. The small-business man is unfortu- 
nately being driven into a less and less independent position in American life. 
You and I must admit that. 

Private enterprise is ceasing to be free enterprise and is becoming a cluster of 
private coUectivisms; masking itself as a system of free enterprise after the 
American model, it is in fact becoming a concealed cartel system after the 
European model. 

We all want efficient industrial growth and the advantages of mass produc- 
tion. No one suggests that we return to the hand loom or hand forge. A series 
of processes involved in turning out a given manufactured product may well re- 
quire one or more huge mass-production plants. Modern efficiency may call 
for this. But modern efficient mass production is not furthered by a central 
control which destroys competition between industrial plants each capable of 
efficient mass production while operating as separate units. Industrial efficiency 
does not have to mean industrial empire building. 

And industrial empire building, unfortunately, has evolved into banker control 
of Industry. We oppose that. 

Such control does not offer safety for the investing public. Investment judg- 
ment requires the disinterested appraisal of other people's management. It 
becomes blurred and distorted if it is combined with the conflicting duty of 
controlling the management it is supposed to judge. 

Interlocking financial controls have taken from American business much of its 
traditional virility, independence, adaptability, and daring — without compensat- 
ing advantages. They have not given the stability they promised. 

Business enterprise needs new vitality and the flexibility that comes from the 
'diversified efforts, independent judgments and vibrant energies of thousands upon 
thousands of independent businessmen. 



CONCENTRATION OF ECONOMIC POWER lg7 

The individual must be encouraged tp exercise his own judgment and to venture 
his own small savings, not in stock gambling but in new enterprise investment. 
Men will dare to compete against men but not against giants. 

III. THE DECLINE OP COMPETITION AND ITS EFFECTS ON EMPLOYMENT 

In output per man or machine we are the most efficient industrial nation on 
earth. 

In the matter of complete mutual employment of capital and labor we art 
among the least efficient. 

Our difficulties of employing labor and capital are not new. We have had them 
since good, free land gave out in the West at the turn of the century. They were 
old before we undertook changes in our tax policy or in our labor and social legis- 
lation. They were caused not by this legislation but by the same forces which 
caused the legislation. The problem of bringing idle men and idle money together 
will not be solved by abandoning the forward steps we have taken to adjust the 
burdens of taxation more fairly and to attain social justice and security. 

If you believe with me in private initiative, you must acknowledge the right of 
well-managed small business to expect to make reasonable profits. You must 
admit that the destruction of this opportunity follows -concentration of control of 
any given industry into a small number of dominating corporations. 

One of the primary causes of our present difficulties lies in the disappearance of 
price competition in many industrial fields, particularly in basic manufacture 
where concentrated economic power is most evident and where rigid prices and 
fluctuating pay rolls are general. 

Managed industrial prices mean fewer jobs. It is no accident that in industries 
like cement and steel where prices have remained firm in the face of a falling de- 
mand pay rolls have shrunk as much as 40 and 50 percent in recent months. Nor 
is it mere chance that in most competitive industries where prices fidjust them- 
selves quickly to falling demand, pay rolls and employment have been far better 
maintained. By prices we mean, of course, the prices of the finished articles and 
not the wages paid to workers. 

When prices are privately managed at levels above those which would be deter- 
mined by free competition, everybody pays. 

The contractor pays more for materials; the homebuilder pays more for hi* 
house; the tenant pays more rent; and the worker pays in lost work. 

Even the Government itself is unable, in a large range of materfals, to obtain 
competitive bids. It is repeatedly confronted with bids identical to the last cent. 

Our housing shortage is a perfect example of how ability to control prices 
interferes with the ability of private enterprise to fill the needs of the community 
and provide employment for capital and labor. 

On the other hand, we have some lines of business, large and small, which are 
genuinely competitive. Often these competitive industries must buy their basic 
products from monopolistic industry, thus losing, and causing the public to lose, 
a large part of the benefit of their own competitive policy. Furthermore, in times 
of recession, the practices of monopolistic industries make it difficult for business 
or agriculture, which is competitive and which does not curtail production below 
normal needs, to find a market for its goods even at reduced prices. For at such 
times a large number of customers of agriculture and competitive industry are 
being thrown out of work by those noncompetitive industries which choose to 
hold their prices rather than to move their goods and to employ their workers. 

If private enterprise left to its own devices becomes half-regimented and half- 
competitive, half-slave and half-free, as it is today, it obviously cannot adjust 
itself to meet the needs and the demands of the country. 

Most complaints for violations of the antitrust laws are made by businessmen 
against otner businessmen. Even the most monopolistic businessman disap>- 
proves of all monopolies but his own. We may smile at this as being just an 
example of human nature, but we cannot laugh away the fact that the combined 
efiFeo^ of the monopolistic controls which each business group imposes for its own 
b^efit inevitably destroys the buying power of the Nation as a whole. 

IV. COMPETITION DOES NOT MEAN EXPLOITATION 

Competition, of course, like all other good things, can be carried to excess. 
Competition should not extend to fields where it has demonstrably bad social and 
economic consequences. The exploitation of child labor, the chiseling of workers' 
wages, the stretching of workers' hours, are not necessary, fair, or proper method* 
of competition. I have consistently urged a Federal wages-and-hours bill to 



188 . CONCENTRATION OF ECONOMIC POWER 

take the minimum decencies of life for the working man and woman out of the 
field of competition. 

It ia, of course, necessary to operate the competitive system of free enterprise 
intelligently. In gaging the market for their wares businessmen, like the farmers, 
should be given all possible information by government and by their own asso- 
ciations so that they may act with knowledge and not on impulse. Serious 
problems of temporary overproduction can and should be avoided by disseminat- 
ing information that will discourage the production of more goods than the 
current markets can posibly absorb or the accumulation of dangerously large 
inventories for which there is no obvious need. 

It is, of course, necessary to encourage rises in the level of those competitive 
pricfes, such as agricultural prices, which must rise to put our price structure 
into more workable balance and make the debt burden, more tolerable. Many 
such competitive prices are now too low. 

It may at times be necessary to give special treatment to chronically sick in- 
dustries which have deteriorated too far for natural revival, especially those 
which have a public or quasi-public character. 

But generally over the field of industry and finance we must revive and 
strengthen competition if we wish to preserve and make workable our traditional 
system of free private enterprise. 

The justification of private profit is private risk. We cannot safely make 
America safe for the businessman who does not want to take the burdens and 
risks of being a businessman. 

V. THE CHOICE BEFORE US 

Examination of methods of conducting and controlling private enterprise 
which keep it from furnishing jobs or income or opportunity for one-third of the 
population is long overdue on the part of those who sincerely want to preserve 
the system of private enterprise for profit. 

No pponle, least of aU a democratic people, will be content to go without work 
or to accep« do^^e standard of living which obviously and woefully falls short 
of their capacity to produce. No people, least of all a people with our traditions 
of personal liberty, will endure the slow erosion of opportunity for the common 
man, the oppressive sense of helplessness under the domination of a few, which 
are overshadowing our w^iole economic life. 

A discerning magazine of business has editorially pointed out that big-businees 
collectivism in industry compels an ultimate collectivism in government. 

The power of a few to manage the economic life of the Nation must be dif- 
fused among the many or be transferred to the public and its democratically 
responsible government. It prices are to be managed and administered, if the 
Nation's business is to be allotted by plan and not by competition, that power 
should not be vested in any private group or cartel, however benevolent its i)ro- 
fessions profess to be. 

Those people, in and out of the halls^of government, who encourage the grow- 
ing restriction of competition either by active efforts or by passive resistance to 
sincere attempts to change the trend, are shouldering a terrific responsibility. 
Consciously or unconsciously they are working for centralized business and 
financial control. Consciously or unconsciously they are therefore either working 
for control of the Government itself by business and finance or the other alter- 
native — a growing concentration of public power in the Government to cope with 
Buch concentration of private power. . 

The enforcement of free competition is the least regulation business" can 
expect. 

VI. A PROGRAM 

The traditional approach to the problems I have discussed has been through 
the antitrust, laws. That approach we do not propose to abandon. Ou the con- 
trary, although we must recognize the inadequacies of the existing laws, we 
seek to enforce them so that the put., c shall not be deprived of such protection 
as they afford. To enforce them properly requires thorough investigation not 
only to discover such violations as may exist but to avoid hit-and-miss prosecutions 
harmful to business and government alike. To provide for the proper and fair 
•nforcement of the existing antitrust laws I shall submit, througli the Budget, 
recommendations for a deficiency appropriation of $200,000 for the Department 
of Justice. 

But the existing antitrust laws are inadequate — most importantly because of 
new financial economic conditions with which they are powerless to cope. 



CONCENTUATION OF ECONOMIC POWER JgQ 

The Sherman Act was passed nearly 40 years ago. The Clayton and Federal 
Trade Commission Acts were passed over 20 j'ears ago. We have had con- 
siderable experience under those acts. In the meantime we have had a chance 
to observe the practical operation of large-scale industry and to learn many 
things about the competitive system which we did not know in those days. 

^We have witnessed the merging out of effective competition in many fields of 
enterprise. We have learned that the so-called competitive system workg 
differently in an industry where there are many independent units, from the way 
it works in an industry where a few large producers dominate the market. 

We have also learned that a realistic system of business regulation has to reach 
more than consciously immoral acts. The comm.unity is interested in economic 
results. It must be protected from economic as well as moral wrongs. We must 
find practical controls over blind economic forces as well as over blindly selfish 
men. 

Government can deal and should deal with blindly selfish men. But that is a 
comparatively small part — the easier part — of our problem. The larger, more 
important, and more difficult part of our problem is to deal with men who are 
not selfish and who are good citizens, but who cannot see the social and economic 
consequences of their actions in a modern economically interdependent com- 
munity. They fail to grasp the significance of sorr>e of our most vital social 
and economic problems because they see them only in the light of their own 
personal experience and not in perspective with the experience of other men 
and other industries. They therefore fail to see these problems for the Nation 
as a whole. 

To meet the situation I have described, there should be a thorough study of 
the concentration of economic power in American industry and the effect of that 
concentration upon the decline of competition. There should be an examination 
of the existing price system and the price policies of industry to determine their 
effect upon the general level of trade, upon employment, upon long-term profits, 
and upon consumption. The study should not be confined to the traditional 
antitrust field. The effects of tax, patent, and other Government policies cannot 
be ignored. 

The study should be comprehensive and adequately financed. I recommend 
an appropriation of not less than $500,000 for the conduct of such comprehensive 
study by the Federal Trade Commission, the Department of Justice, the Securities 
and Exchange Commission, and such other agencies of governipent as have special 
experience in various phases of the inquiry. 

I enumerate some of the items that should be embraced in the proposed study. 
The items are not intended to be all inclusive. One or two of the items, such 
as bank holding companies and investment trusts, have already been the subject 
of special study, and legislation concerning these need not be delayed. 

(1) Improvement of antitrust procedure. — A revision of the existing antitrust 
laws should make them susceptible of practical enforcement by casting upon 
those charged with violations the burden of proving facts peculiarly within their 
knowledge. Proof by the Government of identical bids, uniform price increases, 
price leadership, higher domestic than export prices, or other specified price 
rigidities might be accepted as prima facie evidence of unlawful actions. 

The Department of .Justice and the Federal Trade Commission should be given 
more adequate and effective power to investigate whenever there is reason to 
believe that conditions exist or practices prevail which violate the provisions or 
defeat the objectives of the antitrust laws. If investigation reveals border-line 
cases where legitimate cooperative efforts to eliminate socially and economically 
harmful methods of competition in particular industries are thwarted by fear of 
possible technical violations of the antitrust laws, remedial legislation should be 
considered. 

As a really eifective deterrent to personal viTongdoing, I wou'd suggest that 
where a corporation is enjoined from violating the law, the court might be em- 
powered to enjoin the corporation for a specified period of time from giving any 
remunerative employment or any official position to any person who has been 
found to bear a responsibility for the wrongful corporate action. 

As a further deterrent to corporate wrongdoing the Government might well be 
authorized to withhold Government purchases from companies guilty of unfair 
or .monopolistic practice. 

(2) Mergers and interlocking relationships. — More rigid scrutiny through the 
Federal Trade Commission and the Securities and Exchange Commission of 
corporate mergers, consolidations, and acquisitions than that now provided by 
the Cla5'ton Act to prevent their consummation when not clearly in the public 



19Q CONCENTRATION OF ECONOMIC POWER 

Ijiterest; more effective methods for breaking up interlocking relationships and 
like devices for bestowing business by favor. 

(3) Financial controls. — The operations of financial institutions should be 
directed to serve the interests of independent business and restricted against 
abuses which promote concentrations of power over American industry. 

(a) Investment trusts. — Investment trusts should be brought under strict con- 
trol to insure their operations in the interests of their investors rather than of 
their managers. The Securities and Exchange Commission is to make a report 
to Congress on the results of a comprehensive study of investment trusts and their 
operations which it has carried on for nearly 2 years. The investment trust, like 
the holding company, puts huge aggregations of the capital of the public at the 
direction of a few managers. Unless properly restricted, it has potentialities of 
abuse second only to the holding company as a device for the further centralization 
of control over American industry and American finance. 

The tremendous investment funds controlled by our great insurance com- 
panies have a certain kinship to investment trusts, in that these companies invest 
as trustees the savings of millions of our people. The Securities and Exchange 
Commission should be authorized to make an investigation of the facts relating 
to these investments with particular relation to their use as an instrument of 
economic power. 

(b) Bank holding companies. — It is hardly necessary to point out the great 
economic power that might be wielded by a group which may succeed in acquiring 
domination over banking resources in any considerable area of the country. 
That power becomes particularly dangerous when it is exercised from a distance 
and notably so when effective control is maintained without the responsibilities 
of complete ownership. 

We have seen the multiplied evils which have arisen from the holding-company 
eystem in the case of public utilities, where a small minority ownership has been 
able to dominate a far-flung system. 

We do not want those evils repeated in the banking field, and we should take 
steps now to see that they are not. 

It is not a sufficient assurance against the future to say that no great evil has 
yet resulted from holding-company operations in this field. The possibilities of 
great harm are inherent in the situation. 

I recommend that the Congress enact at this session legislation that will effec- 
tively control the operation of bank-holding cofnpanies; prevent holding com- 
panies from acquiring control of any more banks, directly or indirectly; prevent 
banks controlled by holding companies from establishing any more branches; and 
make it illegal for a holding company, or any corporation or enterprise in which 
it is financially interested, to borrow from or sell securities to a bank in which it 
holds stock. 

I recommend that this bank legislation make provision for the gradual separa- 
tion of banks from holding-company control or ownership, allowing a reasonable 
time for this accomplishment — time enough for it to be done in an orderly manner 
and without causing inconvenience to communities served by holding-company 
banks. 

(4) Trade associations. — Supervision and effective publicity of the activities of 
trade asBOciations, and a clarification and delineation of their legit'mate spheres 
of activitv which will enable them to combat unfair methods of competition, but 
which vA\] guard against their interference with legitimate competitive practices. 

(5) Patent laws. — Amendment of the patent laws to prevent their use to suppress 
inventions, and to create industrial monopolies. Of course, such amendment 
should not deprive the inventor of his royalty rights, but, generally speaking, 
future patents might be made available for use by anyone upon payment of 
appropriate royalties. Open patent pools have voluntarily been put into effect 
in a number of important industries with wholesome results. 

(6) Tax correctives. — Tax policies should be devised to give aflSrmative encour- 
agement to competitive eiiterprise. 

Attention might be directed to increasing the intercorporate dividend tax to 
discourage holding companies and to further graduating the corporation income 
tax according to size. The- graduated tax need not be so high as to make bigness 
impracticable, but might be high enough to make bigness demonstrate its alleged 
superior efficiency. 

We have heard much about the undistributed profits tax. When it was enacted 
2 years ago, its objective was known to be closely related to the problem of con- 
centrated economic power and a free capital market. 

Its purpose was not only to prevent individuals whose incomes were taxable 
In the higher surtax brackets from escaping personal income taxes by letting 



CONCENTRATION OF ECONOMIC POWER 191 

their profits be accumulated as corporate surplus. Its purpose was also to en- 
courage the distribution of corporate profits so that the individual recipientt 
coujd freely determine where they would reinvest in a free capital market. 

It is true that the form of the 1936 tax worked a hardship on many of thp 
smaller corporations. Many months ago I recommended that these inequities 
be removed. 

But in the process of the removal of inequities, we must not lose sight of original 
objectives. Obviously the Nation must have some deterrent against special privi- 
leges enjoyed by an exceedingly small group of individuals under the form of the 
laws prior to 1936, whether such deterrent take the form of an undistributed- 
profits tax or some oth^r equally or more efficient method. And obviously an 
undistributed profits tax has a real value in working against a further concentration 
of economic power and in favor of a freer capital market. 

(7) Bureau of Industrial Economics. — Creation of a Bureau of Industrial 
Economics which should be endowed with adequate powers to supplement and 
supervise the collection of industrial statistics by trade associations. Such a 
bureau should perform for businessmen functions similar to those performed for 
the farmers by the Bureau of Agricultural Economics. 

It should disseminate current statistical and other inforijiaiion regarding 
market conditions and be in a position to warn against the dangers of temporary 
overproduction and excessive inventories as weU as against the dangers of short- 
ages and bottleneck conditions and to encourage the maintenance of orderly 
markets. It should study trade fluctuations, credit facilities, and other condi- 
tions which aflfect the welfare of the average businessman. It should be able to 
help small-business men to keep themselves as well informed about trade condi- 
tions as their big competitors. 

No man of good faith will misinterpret these proposals. They derive from the 
oldest American traditions. Concentration of economic power in the few and 
the resulting unemployment of labor and capital are inescapable problems for 
a modern "private enterprise" democracy. I do not believe that we are so lack- 
ing in stability that we wiU lose faith in our own way of living just because we 
seek to find out how to make that way of living work more effectively. 

This program should appeal to the honest common sense of every independent 
businessman interested primarily in running his own business at a profit rather 
than in controlling the business of other men. 

It is not intended as the beginning of any ill-considered "trust-busting" activity 
which lacks proper consideration for economic results. 

It is a program to preserve private enterprise for profit by keeping it free enough 
to be able to utilize all our resources of capital and labor at a profit. 

It is a program whose basic purpose is to stop the progress of collectivism in 
business and turn business back to the democratic competitive order. 

It is a program whose basic thesis is not that the system of free private enter- 
prise for profit has failed in this generation, but that it has not yet been tried. 

Once it is realized that business monopoly in America paralyzes the system of 
free enterprise on which it is grafted, and is as fatal to those who manipulate it 
as to the people who suffer beneath its impositions, action by the Government 
to eliminate these artificial restraints will be welcomed by industry throughout 
the Nation. 

For idle factories and idle workers profit no man. 

Fhanklin D. Roosevelt. 

The White House, April 29, 1938. 



292 CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 2 

[Public Resolution — No. 113 — 75th Congress] 

fCHAPTER 456 — 3d Session] 

rs. J. Res. 300) 

JOINT RESOLUTION To create a temporary national economic committee 

Resolved by the Senate and House of Representatives of the United States of America 
in Congress assembled, That there is hereby established a temporary national 
economic committee (hereinafter referred to as the "committee") i to be composed 
of (1) three Members of the Senate, to be appointed by the President of the Senate; 
(2) three Members of the House of Representatives, to be appointed by the Speaker 
of the House of Representatives; and (3) one representative from each of the 
following departments and agencies, to be designated by the respective heads 
thereof: Department of Justice, Department of the Treasury, Department of 
Labor, Department of Commerce, the Securities and Exchange Commission, and 
the Federal Trade Commission. Such representative may designate an alternate 
to sit and act for him on the committee in his absence. Any such alternate, while 
so acting, shall have the same rights, powers, and duties as are conferred and 
imposed upon a member of the committee by this joint resolution. Any member 
appointed under clauses (1) and (2) may, when unable to attend a meeting of the 
committee, authorize another such member to act and vote for him in his absence. 
A vacancy in the committee shall not affect the power of the remaining members 
to executive the function* of the committee and shall be filled in the same manner 
as the original selection. 

Sec. 2. It shall be the duty of the committee — 

(a) To make a full and complete study and investigation with respect to the 
matters referred to in the President's message of April 29, 1938, on monopoly 
and the concentration of economic power in and financial control over production 
and distribution of goods and services and to hear and receive evidence thereon, 
with a view to determining, but without limitation, (1) the causes of such concen- 
tration and control and their effect upon competition; (2) the effect of the existing 
price system and the price policies of industry upon the -general level of trade, 
upon employment, upon long-term profits, and upon consumption; and (3) the 
effect of existing tax, patent, and other Government poUcies upon competition, 
price levels, unemployment, profits, and consumption; and shall investigate the 
subject of governmental adjustment of the purchasing power of the dollar so as 
to attain 1926 commodity price levels; and 

(b) To make recommendation to Congress with respect to legislation upon the 
foregoing subjects, including the improvement of antitrust policy and procedure 
and the establishment of national standards for corporations engaged in commerce 
among the States and with foreign nations. 

Sec. 3. (a) The committee shall have power to appoint subcommittees to assist 
the committee in its work. The members of the committee shall serve without 
additional compensation but shall be reimbursed for travel, subsistence, and other 
necessary expenses incurred by them in the exercise of the functions vested in 
the committee. 

(b) The Department of Justice, Department of the Treasury, Department of 
Labor, Department of Commerce, the Securities and Exchange Commission, and 
the Federal Trade Commission are directed to appear before the committee or 
its designee and present evidence by examination of witnesses or the introduction 
of documents and reports. The evidence presented by each of these agencies 
shall cover the subject matter of this inquiry which is within its administrative 
jurisdiction under existing law or which may be assigned to such agencies by the 
committee. Each such agency is authorized to request the committee to issue 
such subpoenas as such agency may require for the attendance of witnesses and 
the production of documents and reports. 

(c) The committee shall have power to employ and fix the compensation of 
such officers, experts, and employees as it deems necessary for the performance 
of its duties. The committee is authorized to utilize the services, information, 
facilities, and personnel of the departments and agencies of the Government. 

Sec. 4. (a) Prior to the opening of the first session of the Seventy-sixth Congress 
or as soon thereafter as is practicable the committee shall transmit to the President 
and to the Congress preliminary reports of the studies and investigations carried 
on by it, and by the departments and agencies represented thereon, together with 
the findings and recommendations of the committee, and shall submit to the 



CONCENTRATION OF ECONOMIC POWER 193 

President and to the Congress as soon as practicable thereafter, during or prior to 
the termination of the Seventy-sixth Congress, further and final reports of the 
studies and investigations carried out pursuant to this resolution, together with 
the findings and recommendations of the committee. 

(b) A majority of the committee shall constitute a quorum, and the powers 
conferred upon them by this joint resolution may be exercised by a majority vote. 

(c) All authority conferred by this joint resolution shall terminate upon the 
expiration of the Seventy-sixth Congress. 

Sec. 5. For the purpose of this joint resolution the committee, or any sub- 
committee designated by it, shall be entitled to exercise the same powers and 
rights as are conferred upon the Securities and Exchange Commission by sub- 
section (c) of section 18 of the Act of August 26, 1935 (49 Stat. 831)- and the 
provisions of subsections (d) and (e) of such section shall be applicable to all 
persons summoned by subpoena or otherwise to attend and testify or to produce 
books, papers, correspondence, memoranda, contracts, agreements, or other 
records and documents before the committee. 

Sec. 6. (a) There is hereby authorized to be appropriated, out of any money 
in the Treasury not otherwise appropriated, the sum of $500,000, or so much 
thereof as may be necessary, to carry out the provisions of this joint resolution. 

(b) Of the funds authorized to be appropriated under subsection (a), not to 
exceed $100,000 shall be immediately available for expenditure by the committee 
in carrying out its functions and not to exceed $400,000 shall be available, as the 
President shall direct, among the departments and agencies represented on the 
committee to enable them to carry out their functions under this joint resolution. 

Approved, June 16, 1938. 



Exhibit No. 3 

procedtjhe with respect to" hearings before temporary national eco- 
nomic committee conducted by various member departments and com- 
missions under section 3 (b) joint resolution no. 113, seventy-fifth 
congress 

I. Hearings on reports. — It is the view of the Executive Committee that as 
general practice, it will not be necessary or desirable to have public hearings on 
reports submitted to the Temporary National Economic Committee by the vari- 
ous departments and commissions. Certainly as respects reports based on ma- 
terial deduced at public hearings, a public hearing on such a report would be 
wholly unnecessary. As respects statistical and general economic reports, the 
same conclusion seems obvious. There may be, however, some types of reports 
on which there should be public hearings. In such cases it is recommended that 
the procedure for presentation of the report at a public hearing be worked out 
by the committee case by case. 

II. Hearings on investigations. — It is our conclusion that hearings based .on 
data and evidence, collected as a result of investigations and assembled by The 
various departments and commissions represented on the committee, be con- 
ducted in the following manner: 

(a) These hearings will be before the full committee, or a subcommittee, as 
the case may be. and presented by the representatives of the department or 
commission which has conducted the investigation. 

(6) The list of witnesses to be called will be prepared and submitted by the 
department or commission which has conducted the investigation. 

(c) Each witness will appear under subpena and testify under oath. 

(d) In all examination of witnesses, the rules of evidence shall be observed but 
liberally construed. 

\ (e) Witnesses will not be allowed to substitute prepared statements for testi- 
mony; nor will prepared statements dealing with facts be allowed to be introduced 
at the hearings except with the consent of the df^partment or commission mak- 
ing the presentation, unless the committee in a particular instance otherwise 
orders. 

(/) At a later stage in the hearings, opportimity will be afforded interested 
persons to present to the committee their views as to what solution or solutions 
of particular problems would be desirable or necessary. The agenda for presenta- 
tion of such suggestions should be prepared in the first instance by the respective 
departments and commissions and presented to the committee for approval before 
such hearings are held. 



194 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 4 

(Chart based on following statistical data appears in text on p. 4] 

United States population 



1850 23, 260, 638 

1855 27, 386, 359 

1860 31, 502, 613 

1865 35,060, 138 

1870 38, 655, 016 

1875 44, 453, 721 

1880 50, 262, 382 

1885 66, 658, 347 

1890 63, 056, 438 

1895 69, 579, 868 

1900 76, 129, 408 

1905 84, 219, 378 

Source: National Resources Committee, Problems of a Changing Population, p. 24, table 2. Conti- 
nental United States only. The estimates for 1010 to 1960 were prepared for the National Resources Com- 
mittee under the direction of Warren S. Thompson and P. K. Whelpton, of the Scripps Foundation for 
Kesearch in Population Problems, and assume medium fertility and mortality and no net immigration. 



1910 _ -. 92, 267, 080 

1915 99, 342, 625 

1920 106, 543, 031 

1925 114, 867, 141 

1930 122, 775, 000 

1935 127, 354, 000 

1940 131, 993, 000 

1945 136, 447, 000 

1950 140, 561, 000 

1955. 144, 093, 000 

1960 146, 987, 000 



Exhibit No. 6 
[Chart based on following statistical data appears in text on p. 5] 
United States national income 



Year 


Total 


Per 
capita 


Year 


Total 


Per 
capita 


1850 


$2, 200, 000, 000 
3, 600, 000, 000 
6. 700, 000, 000 
7, 400. 000, 000 
12,100,000,000 
18,000,000,000 
29, 200, 000, 000 
30,700.000,000 
30,600,000,000 
33,200,000,000 
35,000,000,000 
34. 100. 000. 000 
37, 100, 000, 000 
45, 800, 000. 000 
63. 300, 000, 000 
68, 900, 000, 000 
67, 400, 000, 000 
68, 100, 000, 000 


$95 
115 
174 
147 
192 
236 
322 
333 
327 
349 
363 
348 
373 
455 
522 
669 
641 
639 


1921 


$50, 700, 000, 000 
58, 700, 000, 000 
68, 000. 000, 000 
67, 900, 000, 000 

72, 800, 000, 000 
75, 000, 000. 000 

73, 800, 000, 000 
77, 600, 000, 000 
81, 100, 000, 000 
68, 300, 000, 000 
53, 800, 000, 000 
40, 000, 000, 000 
42, 300, 000, 000 
50,100,000,000 
65, 200, 000, 000 
63, 500, 000. 000 
69,800,000,000 

« 61. 500, 000, 000 


$408 


1860 


1922 


636 


1870 


1923 




1880 


1924 


600 


1890 


1925 


633 


1900 


1926 


643 


1909 


1927 


624 


1910 


1928 


648 


1911 


1929 


668 


1912 


1930 


659 


1913 


1931 


434 


1814 


1932 


320 


1915 


1933 


336 


1916 


1934 


395 


1917 


1935 


433 


1918 


1936 


494 


1919 


1937 


640 


1920 


1938 .- 


»473 









> Estimated. 

Sources: U. S. Department of Commerce, for 1929-38; Kuznets in National Income and Capital Forma- 
tion, 1919-35, the National Bureau of Economic Research, on 1919-28; and W. I. King, in Wealth and In- 
come of the People of the United States, for 1850-1918; spliced into a single reasonably comparable series by 
the Department of Commerce. Reduced to a per-capita basis by use of population estimates for the Conti- 
nental United States prepared by the Census Bureau. 



CONCENTRATION OF ECONOMIC POWER 



195 



Exhibit No. 6 

[Chart based on following statistical data appears in text on p. 9] 

National income in constant prices 

[1926=100] 



1850. 
1860. 
1870. 
1880. 
1890- 
1900. 
1909. 
1910. 
1911. 
1912. 
1913. 
1914. 
1915. 
1916. 
1917. 
1918. 
1919. 
1920. 



1921. 
1922. 
1923. 
1924. 
1925. 
1926. 
1927. 
1928. 



69.3 

81.0 

90.2 

92.3 

93.8 

100.0 

103. 1 

107.0 

1929 113. 4 



1930. 
1931. 
1932. 
1933. 
1934. 



105.4 

98.2 

82.3 

85.6 

90.5 

1935 92. O 

1936 104. 8 

1937 107. 9- 



Sctorce: National income data given In table 6, transformed into a relative with 1926=100, and reduced 
approximately to constant prices by use of the Index of Wholesale Prices since 18C0, published by the 
Bureau of Labor Statistics. 



Exhibit No. 7 

[Chart based on following statistical data appears In text on p. 10] 
National income 



Y«ar 


Current prices 


1929 prices 


Year 


Current prices 


1929 prices 


1919 


$61, 842, 000, 000 

74, 969, 000, 000 
59, 393, 000, 000 
60, 254, 000, 000 

70, 799, 000, 000 

71, 257, 000, 000 

75, 621, 000, 000 
80, 192, 000, 000 
78, 128. 000, 000 


$57,762,000,000 
61, 342, 000, 000 
55,804,000,000 
60,858,000,000 
70, 173, 000, 000 
70, 756, 000, 000 
73, 872, 000, 000 
77, 654, 000, 000 
77, 048, 000, 000 


1928 


$80,970,000,000 
84,111,000,000 
73,297,000,000 
56,000,000,000 
39, 184, 000, 000 
38. 824. 000, 000 
47,834,000,000 
53.110.000,000 


$80, 925, 000, 000 
84,094 000,000 


1920 


1929 


1921 


1930 


75 003 000 000 


1922 


1931 


62, 529, 000, 000 


1923 


1932 




1924 


1933 . 


50, 539, 000, 000 


1925 


1934 


59,257,000.000 
63,577,000,000 


1926 


1935 


1927 









Source: Kuznets National Income and Capital Formation, 1919-35, table 1 and appendix I, published 
by the National Bureau of Economic Research. Unadjusted for disparity between depreciation, depletion, 
and fire losses at book value and reproduction prices. 



Exhibit No. 8 

[Chart based on following statistical data appears in text on p. 11] 

Per capita national income, 19S4-35 



United States $432 Sweden $321 

England 401 France 267 

Germany 345 

Source: Tax Systems of the World, published by the Tax Research Foundation. 
1938, p. 374. 



195 CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 9 

[Chart based on followinp statistical data appears in text on p. 13] 

Employment lost in depression in nonagricultural occupations (man-years) 



Year 


Employ- 
ment 


Loss from 
1929 


Year 


Employ- 
ment 


Loss from 
1929 


1929 


36,141,000 
33, 925, 000 
30,870,000 
27, G61, 000 
27, 726, 000 
30,259,000 




1935 

1936 


31, 482, 000 
33. 201, 000 
34, 557, 000 
132,153,000 


4 659 000 


1930 


2, 216, 000 
5, 271, 000 
8, 480, 000 
8. 415, 000 
5,882,000 


2, 940, 000 


1931 


1937 1 


1,584,000 


1932 


1938 - 


1 3, 98S, 000 




Totalloss 1930-38... 




1934 




43,43.5,000 









1 Estimated. 

Source of basic data: Bureau of Labor Statistics. The annual employment figures are averages of monthly 
figures. , 



Exhibit No. 10 

[Chart based on following statistical data appears in text on p. 14] 
Salaries and wages lost in depression in nonagricultural occupations 



Year 


Salaries and 

wages paid 


Lo-sS from 1939 


Year 


Salaries and 
V. ages paid 


Loss from 1929 


1929 


$49,200,000,000 
45, 453, 000, 000 
38, 299, one, 000 
29,941,000,000 
27, 479, 000, 000 
31,138,000.000 
33, 672, 000, 000 




1936 


$37, 418, 000, 000 

42, 086, 000, 000 

138,500,000,000 


$11,842,000,000 




$3, 807, 000, 000 
10,961,000,000 
19, 319, 000, 000 
21, 781, 000, 000 
18,122,000,000 
15, 588, 000, 000 


1937 


7,174,000,000 




1938 


1 10, 760, 000. 000 




Total loss, 
1930-38 . 




1933 






1934 


119,354.000,000 


1935 











1 Estimated. 



Source of basic data; From estimates of "monthly income payments," showing compsns/ition of employees 
In nonagricultural industries, made by the National Income Section of the Division of Economic Research 
of the Bureau of Foreign and Domestic Commerce, Department of Commerce. 



Exhibit No. 11 

[Chart based on following statistical data appears in text on p. 15] 
Dividends lost in depression 



Year 


Dividend 
payments to 
individuals 


Loss from 
1929 


Year 


Dividend 
payments to 
individuals 


Loss from 
1929 


1929 


$6,000,000,000 
5, 800, 000, 000 
4, 300, 000, 000 

. 2, 700, 000, 000 
2, 200, 000, 000 
2, 800, 000, 000 
3, 000, 000, 000 




1936 

1937 

1928 - 

Total loss, 
1930-38... 


$4, 300, 000, 000 

5, 000, 000, 000 

> 3, 800, 000, 000 


$1,700,000,000 


1930 

1931 


$200, 000, 000 
1, 700, 000, 000 
3, 300, 000, 000 
3, 800, 000, 000 
3, 200, 000, 000 
3, 000, 000, 000 


1,000,000,000 
1 2, 200, 000, 000 


1933 







1034 

1935 


20,100,000.000 







Source of basic data: Estimates of dividends "originated" prepared by the National Income Section of 
the Division of Economic Research of the Bureau of Foreign and Domestic Commerce, Department of 
Commerce. 



CONCENTRATION OF ECONOMIC POWER 
Exhibit No. 12 

[Chart based on following statistical data appears in text on p. 16] 
Gross farm income lost in depression 



197 



Year 


Gross farm 
income 


Loss from 
1929 


Year 


Gross farm 
income 


Loss from 
1929 


1929 


$12, 000, 000, 000 
9, 800, 000, 000 
7, 000, 000, 000 
S, 300, 000, 000 
6, 000, 000, 000 
6, 800, 000, 000 
7, 800, 000, 000 




1936 

1937 


$9, 000, 000, 000 

9, 600, 000, 000 

» 8, 400, 000, 000 


$3,000 000 000 


1930 


$2, 256, 000, 556 

5,000,000,000 
6, 700, 000, 000 
6, 000, 000, 000 
5, 200, 000, 000 
4, 200, 000, 000 


2 300 000 000 


1931 


1938 


13,800,000,000 


1932 

1933 


Total loss, 
1930-38 . 






1934 


38, 400, 000, 000 


1935 







1 Estimated. 

Source of basic data: U. S. Department of Agricultm-e. Government payments are not in .luded. 



Exhibit No. 13 

[Chart based on following statistical data appears in text on p. 17] 

National income lost in depression at 1929 prices 



Year 


National income 


Loss from 1929 


Year 


National income 


Loss from 1929 


1929 . - 


$81, 100, 000, 000 
70, 200, 000, 000 
60, 500, 000, 000 
49, 800, 000, 000 
55, 200, 000, 000 
62, 700, 000, 000 
67, 500, 000, 000 




1936 


$76, 700, 000, 000 

81,000,000,000 

1 73, 700, 000, 000 


$4, 400, 000, 000 

100, 000, 000 

' 7, 400, 000, 000 


1930 


$10,900,000,000 
20,600,000,000 
31, 300, 000, 000 
25, 900, 000, 000 
18, 400, 000. 000 
13,600,000,000 


1937 


1931 


1938 


1932 


Total loss, 
1930-38... 


1933 






1934 


132,600,000,000 


1935 







I Estimated. 

Source: Estimates of national income iiiude by the Xation;;! Income Section of the Division of Economic 
Research of the Bureau of Foreign and Domestic Commerce, Department of Commerce, expressed in termi 
of 1929 prices by the Division of Economic Research, Bureau of Foreign and Domestic Commerce, using 
indices compiled by Mr. Fabricant, of the National Bureau of Economic Research, and by the Cost of 
Living Division of the Bureau of Labor Statistics. 



Exhibit No. 13-A 

[Chart based on following statistical data appears in text on p. 20] 
Distribution of national income by type of payment excluding income from Government 



Year 


Compensation 
of employees 


Miscellaneous 
net incomes 


Interest, divi- 
dends, and ac- 
crued incomes 


Total 


1919.. 


$36, 703, 000, 000 
43, 383, 000, 000 
33, 848, 000, 000 
36, 194, 000, 000 
42,541,000,000 
42, 360, 000, 000 
44,412,000,000 
47, 356, 000, 000 
46, 834, 000, 000 
48, 299, 000, 000 
50, 964, 000, 000 
45, 629, 000, 000 
37.507,000,000 
27, 857, 000, 000 
26, 386, 000, 000 
30, 475, 000, 000 


$17,191,000,000 
15, 476, 000, 000 
12, 756, OOO, 000 
11,414,000,000 
12, 867, 000, 000 
13, 550, 000, 000 
13, 900, 000, 000 
13, 574, 000, 000 
12, 723, OOO, 000 
12,852,000,000 
12, 850, 000, 000 
10, 537. 000, 000 
6, 936, 000, 000 
4,169,000,000 
4, 502. 000, 000 
6, 131, 000, 000 


$7, 025, 000, 000 
9, 204, 000, 000 
6. r,37, 000, 000 
6, 090, 000, 000 
8, 238, 000, 000 
7,987,000,000 
9,081,000,000 
11,118,000,000 
10,041,000,000 
11,313,000,000 
ll,7fi2,000,000 
8, 947, 000, 000 
4.915,000,000 
1,298,000,000 
756, 000, 000 
3, 436, 000, 000 




1920 






53,241,000,000 
53 698 000 000 


1922 


1923 


63 646 000 000 


1924 


03, 897, 000, 000 
67,993,000,000 
72, 048, 000, COO 


1925 


1926. 


1927 


09, 598, 000, 000 
72, 404, 000, 000 
75, 576, 000, 000 
65 113 000 000 


1928 


1929 . . 


1930 


1931 


49 358 000 000 


1932 


33 324 000 000 


1933 


31 804 000 000 


1931 









Source; Kuznets, National Income and Capital Formation, 1919-35, published by the National Bureau of 
Economic Research. Income payments by the Government have been excluded. "Miscellaneous net 
incomes" includes Incomes of unincorporated businesses, farmers, professional men and the estimated net 
income from home ownership of persons occupying homes they own. "Accrued incomes" are the additions 
to the surplus accounts of business corporations. 



198 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 14 

[Chart based on foUowiDg statistical data appears in text on p. 21] 

Monthly income payments 

(Indices— 1929 average for total- 100) 





Total 
income 
pay- 
ments 


Compen- 
sation of 
employ- 
ees 


Entre- 
pr^ju- 

Income 


Divi- 
dends 
and 
interest 


Direct 
. relief 


Pay- 
ments 

to 
veterans 


1929: 

January 


97.8 
98.2 
98.3 
98.6 
99.0 
99.6 
101.1 
102.9 
102.1 
102.4 
100.2 
100.0 

99.8 
97.4 
9«.l 
95.9 
95.7 
94.7 
93.1 
92.2 
91.1 
89.4 
87.9 
86.6 

86.1 
84.4 
88.6 
88.6 
83.1 
81.0 
79.6 
77.6 
76.4 
74.2 
73.6 
72.4 

70.8 
69.7 
68.0 
66.4 
64.7 
62.3 

60.7 
60.2 
61.1 
59.4 
69.1 
68.0 

67.9 
66.9 
66.1 
66.3 
66. 2 
67.8 
67.8 
69.1 
60.6 
61.0 
61.3 
63.0 


63.6 
64.0 
64.3 
64.4 
65.1 
65.7 
66.5 
67.3 
67.2 
66.8 
65.7 
66.2 

65.2 
63.1 
62.6 
62.1 
62.1 
61.7 
60.8 
69.8 
69.2 
68.0 
66.8 
66.8 

64.6 
64.3 
64.0 
63.7 
62.7 
62.2 
61.3 
50.3 
49.2 
48.0 
47.2 
46.6 

45.2 
44.3 
43.2 
42.2 
41.0 
39.7 

38.3 
37.9 
39.3 
38.0 
37.6 
38.9 

37.0 
36.6 
34.9 
36.0 
36.4 
36.8 
36.8 
38.6 
39.4 
39.8 
39.9 
41.7 


20.2 
.20.2 
19.8 
19.8 
19.6 
19.6 

zao 

20.8 
20.0 
20.7 
19.6 
19.8 

19.5 
19.3 
18.6 
18.9 
18.8 
18.4 
17.9 
18.2 
17.9 
17.6 
17.3 
17.1 

17.0 
16.7 
16.6 
16.3 
16.9 
16.3 
15.1 
14.6 
13.7 
13.8 
14.1 
13.7 

13.6 
13.6 
13.1 
12.8 
12.6 
11.7 

11.6 
11.6 
11.3 
11.0 
11.1 
10.8 

11.0 
10.6 
10.3 

ia6 

11.0 
11.2 
11.3 
10.9 
11.2 
11.3 
11.4 
11.2 


14.0 
14.1 
14.2 
14.3 
14.3 
14.4 
14.5 
14.7 
14.8 
14.8 
14.9 
16.0 

16.0 
14.9 
14.9 
14.8 
14.7 
14.6 
14.3 
14.1 
13.9 
13.8 
13.6 
13.4 

13.3 
13.1 
13.0 
12.9 
12.8 
12.7 
12.6 
12.3 
12.1 
11.9 
11.7 
11.6 

11.4 
11.1 
10.9 
10.7 
10.5 
10.3 

10.1 
9.9 
9.8 
9.7 
9.6 
9.3 

9.2 
9.1 
9.0 
9.0 
9.0 
9.0 
9.1 
9.1 
9.2 

11 

9.2 


0.06 
.06 
.06 
.06 
.06 
.05 
.06 
.06 
.06 
.06 
.06 
.08 

.09 
.09 
.11 
.11 
.09 
.08 
.09 
.09 
.09 
.12 
.14 
.21 

.23 
.24 
.26 
.24 
.26 
.24 
.26 
.23 

!26 
.29 
.38 

.41 
.49 
.68 
.50 
.52 
.62 

.47 
.54 
.64 
.61 
.73 
.89 

.70 
.76 
.86 
.77 
.72 
.69 
.63 

.60 
.63 
.76 
.80 




February 




March 




April 




May : 




June 




July 








September 




October .... 












1930: 

January . . ... 




February 




MaiS^::::::::::::::::::::::::::::: 




April 




May 




June 




July 












October . . 




November 








1931: 




February . ..... 


o'os 


March 


4.69 


April 


6.39 


May :: I...: :.:: : 


1.41 


June. .. . ... 


.60 


July 


.88 




.29 




.26 


October . 


.26 




.20 




.33 


1932: 

January 


.29 


February . ... 


.18 


March 


.16 


AprU 


.15 


May I.....:. 


.14 




.14 


1932: 

July.. 


.32 




.40 




.17 


October 


.12 


November. . . .... 


.00 


December 


.00 


1033: 

January i. 


.00 
.08 


March 


.11 


April 


.00 


May... :::::::::; 


.08 


June 


.08 


July 


.06 


August 




September 


.05 


October 

November . 


.06 
.06 


December 


.06 



CONCENTRATION OF ECONOMIC POWER 
Monthly income payments — Continued 



199 



1934: 

January... 
February. . 
March 

April 

May 

June 

July 

August 

September. 

October 

November., 

December. . 
1936: 

January 

February... 

March 

AprU 

May 

June L... 

July 

August..... 

September.. 

October 

November.. 

December.. 
1936: 

January 

February... 

March_„.. 

April 

May. 

June 

1936: 

July 

August , 

September... 

October , 

November... 

December... 
1937: 

January . 

February 

March 

April 

May 

June.. 

July 

August 

September... 

October 

November... 
December... 
1938: 

January 

February 

March 

April 

May 

June , 

July 

August 

September 

October , 



Total 
Income 
pay- 
ments 



Compen- 
sation of 
employ- 
ees 



65.6 
65.6 
66.2 
65.3 
65.5 
65.6 
65.9 
66.9 
66.0 
66.9 
67.3 
67.8 

69.3 
69.6 
70.0 
70.4 
70.0 
69.7 
69.6 
71.9 
72.0 
72.9 
73.6 
75.4 

76.6 
75.9 
76.7 
77.0 
77.6- 
91.2 

86.7 
82.0 
81.6 
82.6 
83.9 
85.9 

85.4 
86.4 



90.2 
88.7 
88.0 
86.5 



83.6 
82.6 
82.7 
81.4 
80.4 
80.7 
81.3 
82.6 



43.8 
43.5 
44.0 
43.2 
43.2 
43.0 
42.9 
43.3 
42.6 
43.1 
43.6 
44.2 

45.4 
45.7 
45.8 
45.9 
46.* 7 
45.6 
45.6 
47.1 
47.1 
47.6 
48.3 
60.2 



60.7 
61.2 
61.6 
51.9 
52.3 

62.8 
63.6 
63.6 
64.4 
55.6 
66.9 

66.3 
67.1 

68.° 4 
68.8 
68.8 

59.' 6 
58.6 
68.0 
56.7 
65.8 

64.0 
63.3 
63.1 
62.5 
62.1 
62.1 
62.2 
63.4 
64.1 
64.4 



Entre- 
preneu- 
rial 
income 



1U7 
11. t 
11.7 
11.6 
11.7 
12.0 
12.4 
13.1 
12.9 
13.0 
12.8 
12.6 

12.7 
12.9 
13.0 
13.3 
13.1 
13.0 
13.0 
13.8 
13.7 
14.2 
14.2 
14.2 

14.0 
14.1 
14.4 
14.5 

14.7 
15.2 

16.6 
15.2 
15.1 
15.4 
15.7 
16.1 

16.9 
16.0 
16.8 
18.6 
16.1 
16.6 
17.1 
17.4 
16.8 
16.7 
16.5 
16.7 

16.3 
16.9 
16.0 
15.7 
15.4 
16.6 
16.7 
15.6 
16.6 
15.6 



Divi- 
dends 
and 
Interest 



10.0 
9.9 
10.0 

10.1 
10.1 
10.1 
10.2 
10.2 
10.7 

n.z 

11.2 
11.2 
11.3 
11.4 
11.6 

11.8 
12.0 
12.1 
12.2 
12.2 
12.2 
12.2 
12.2 
12.2 
12.1 
12.0 
11.9 

11.7 
11.5 
11.4 
11.1 
11.0 
11.1 
11.3 
11.4 
11.6 
11.0 



Direct 
relief 



1.09 
1.10 
1.16 
1.10 
1.02 
1.02 
1.02 
1.05 
1.09 
1.13 
1.22 
1.39 

1.44 

1.45 

1.5 

1.4 

1.3 

1.3 

1.3 

1.3 

1.3 

1.3 



Pay- 
ments 
to 
veterans 



0.06 
.03 
.05 



1.24 


.03 


1.21 


.03 


1.33 


.03 


1.35 


.03 


1.27 


.03 


1.1« 


.03 


1.07 


.03 


1.18 


.02 


1.21 


.02 


1.30 


.02 


1.18 


.02 


1.01 


.02 


.93 


.02 


.93 


.02 


.92 


02 


.84 


.00 


.77 


.00 


.75 


12.24 


.76 


6.34 


.77 


1.18 


.80 


.73 


.84 


.64 



Source: Complied by National Incc«ne Section, Division of Economic Research, Bureau of Foreign and 
Domestic Commerce, Department of Commerce. The individual series represent points In the Index and 



124491— 39— pt. 1- 



200 



CONCENTRATION OF ECONOMIC POWER 



Exhibit No. 15 
[Chart based on following statistical data appears In text on p. 23] 
National income from commodity producing and all other private industries 
[In millions of dollars] 



1919. 
1920- 
1921. 
1922. 
1923. 
1924. 
1925. 
1926. 
1927. 



Percent 
commodity 
producing 



50.5 
49.5 
42.2 
41.4 
44.4 
43.2 
43.4 
42.8 
42.3 



49.5 

50.5 

57.8 

55.6 
56.8 
56.6 
57.2 
57.7 



1928. 
1929. 
1930. 
1931. 
1932. 
1933. 
1934. 
1935. 



Percent 
commodity 
producing 



41.4 
42.4 



33.7 
39.7 
40.2 



Percent 
all other 



58.fi 
57.6 
60.4 
65. .'5 
71.1 
66.3 
60 3 



TKmmS producing industries are agriculture, construction, manufacturmg and mmmg. 



Exhibit No. 16 

[Chart based on following statistical data appears in text on p. 25] 

United States industrial production 

[1899=100] 



1863. 
1864. 
1865. 
1868. 
1867. 



1870.. 
1871. 
1872.. 
1873. 
1874., 
1875. 
1876. 
1877. 
1878. 
1879. 
1880. 



Total in- 
dustrial 
production 



Per capita 

industrial 
production 



28.1 
27.5 
26.6 
26.6 
30.1 
31.5 
34.3 
42.5 
43.5 
49.2 
49.0 
49.3 
■17.6 
56.2 
58.8 
60.4 
66.8 
71.9 
78.0 
79.0 
70.2 

8.16 



94.1 

100. 

101. G 



26.0 
29.4 

■.ii. 

37.3 
36.0 
42.6 
41.0 
43.8 
51.8 
49.9 
47.5 
44.8 
43.6 
48.2 
49.1 
52.3 
63.2 
63.1 

67! 8 
66.6 
62.9 
72.5 
74.2 
74.7 
80.9 
85.3 
90.7 
90.0 
78.4 
75.4 
89.9 
,S2.0 
.SO. 8 
05. 7 



1901. 
1902. 
1903. 
1904. 
1905. 
1906. 
1907. 



190S.. 
1910.. 
1911.. 
1912.. 
1G13.. 
1914.. 
1915.. 
1016.. 
1917.. 
1918.. 
1919.. 
1920., 
1921.. 
1922. 
1923. 
1924. 
1925. 
1926. 
1927. 
1928. 
1929. 
1930. 
1931. 
1932. 
1933. 
1934. 
1935. 
1936. 
1937. 
1938. 



Total in- 
dustrial 
production 



112.3 
122.1 
125.4 
124.0 
146.3 
1.55. 7 
157.3 
132.3 
162.4 
167. 2 
160.9 
183.6 
190.9 
175.7 
193.8 
228.0 
231.3 
227.9 
219.0 
231.6 
177.9 
224.1 
273 8 
255.5 
281.0 
291.4 
284.3 
297.2 
319.4 
257.0 
215.9 
170.7 
201.8 
210.1 
236.9 
275.6 
289.1 
I 223. 8 



Per capita 
industrial 
production 



108.1 
115.1 
11.5.8 
112.3 
129. 9 
135.6 
134.6 
111.1 
134. 
135.5 
128.5 
144.5 
148.0 
134.2 
145.0 
169.3 
169.3 
164.5 
156.0 
162.6 
122.9 
152.6 
183.6 
168.9 
182.9 
187.0 
179.9 
185.5 
196.6 
156.1 
130.1 
102. 2 
120.0 
124.1 
138.9 
160.6 
167.3 
I 128. 5 



Estimated. 



1 Estimated. ^. . » « 

source: The industrial production Azures represent a spli^e^fth^ 

o?Bureau of Census cstlnmtes of the population of continental Unites* Matos 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 17 

[Chart based on following statistical data appears in text on p. 26] 

Physical volume of industrial production 

[1923-25 average = 100] 



201 



Year 


Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


A„.. 


Sept. 


Oct. 


Nov. 


Dec. 


1919 


82 
95 
67 
73 
99 
100 
105 
106 
107 
107 
119 
106 
S3 

i 

78 
91 
98 
114 
80 


79 
95 
66 
76 
100 
102 
104 
105 
108 
109 
118 
107 
86 
69 
63 
81 
89 
94 
116 
79 


76 
93 
64 
80 
103 
100 
103 
106 
110 
108 
118 
103 
S7 
67 
59 
84 

93 

118 
79 


78 
88 
64 
77 
lOfi 
95 
102 
107 
108 
108 
121 
104 
88 
63 
66 
85 
86 
100 
118 
77 


78 
90 
66 
81 
106 
89 
102 
106 
109 
108 
122 
102 
87 
60 
78 
86 
85 
101 
118 
76 


83 
91 
65 
85 
106 
85 
102 
108 
107 
108 
125 
98 
83 
59 
9i 
83 
86 
103 
114 


87 
89 
65 
85 
104 
84 
103 
108 
106 
109 
124 

82 
• 58 
100 

76 

86 
107 
114 

83 


89 
89 
67 
83 
103 
89 
103 
110 
106 
110 
121 
90 
78 
60 
91 
73 
86 
108 
117 
88 


86 
68 
88 
102 
94 
101 
111 
104 
113 
121 
90 
76 
66 
84 
71 

109 
111 
90 


86 
83 
71 
93 
99 
95 
104 
111 
102 
115 
18 

73 

67 
76 
73 
95 
109 
103 
96 


85 
76 
71 
97 
98 
97 
107 
110 
101 
117 
110 
86 
73 
65 
72 
74 
97 
114 
89 
1 101 


80 


1920 


72 


1921 


70 


1922.. 


100 


1923 .. . . 




1924 


101 


1925 


109 


1926 


107 


1927... 


102 


1928 . - . 




1929 


103 

84 


1931 _ 




1932 




1933 . . . 




1934 


85 


1935 


104 


1936. 

1937. 


121 











> Preliminary. 

Source: Compiled by the Board of Governors of Federal Reserve System . 
tion. 



Exhibit No. 18 

[Chart based on following statistical data appears in text 
Output of commodities 



Adjusted for seasonal varia- 



i p. 28] 





Percent du- 
rable com- 
modities 


Percent non- 
durable com- 
modities 




Percent du- 
rable com- 
modities 


Percent non- 
durable com- 
modities 


1879 


31 
35 
36 
36 
37 


69 
65 
64 
64 
63 




37 
38 
41 
44 

27 


03 


1889 


1919 


62 


1899^ 


1925 


50 


1904 


1929 


56 


1909 


1933.. 


73 







Source: National Bureau of Economic Resear h, and Kuznets, Commodity Flow and Capital Formation 
1919-1935. published by National Bureau of Economic Research. Percentages are based on dollar figures 
at current manufacturer's prices. "Durable commodities" includes construction materials and consumer 
durable goods. Figures for years prior to 1919 were provided by the courtesy of Dr. Wesley C. Mitchell, 
Director of Research of the National Bureau of Economic Research. 



202 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 19 

[Chart based on following statistical data appears In text on p. 20] 

Federal Reserve index of manufacturing production 

[1023-25 average for total -100] 





Total 
Index 


Points In Index 


Year and month 


Total 
Index 


Points In Index 


Year and month 


Non- 
durable 


Durable 


Non- 
durable 


Durable 


1010 


82.2 
80.7 
77.7 
78.0 
78.8 
84.6 
80.2 
ei.fi 
87.0 
86.fi 
80.3 
88.3 

06.6 
06.4 
04.0 
88.0 
01.7 
0J.6 
88.8 
80.1 
86.7 
81. 
73.2 
68.0 

64.6 
64.1 
62.6 
63.2 
66.3 
65.6 
66.2 
67.0 
68.6 
72.4 
72.6 
71.6 

73.4 
76.2 
78.6 
81.7 
86.2 
00.1 
00.8 
87.3 
80.1 
04.3 
07.8 
100.3 

00.4 
100.6 
103.3 
105.0 
106.0 
106.7 
103.1 
101.4 
101.1 
08.2 
06.8 
06.7 


41.4 
30.0 
30.6 
42.8 
45.6 
46.7 
48.0 
47.0 
40.3 
40.0 
60.7 
40.8 

61.6 
60.4 
40.7 
48.8 
40.1 
46.6 
44.7 
43.4 
41.8 
30.1 
36.0 
32.4 

35.0 
36.7 
38.6 
40.4 
41.4 
43.1 
44.0 
44.4 
45.0 
46.0 
45.8 
46.6 

46.3 
46.1 
46.7 
46.4 
48.0 
40.8 
40.0 
61.2 
61.3 
62.3 
64.7 
66.1 

63.0 
65.3 
66.2 
66.0 
65.6 
65.1 
62.0 
62.1 
62.3 
61.0 
61.6 
60.9. 


40.8 
40.4 
38.1 
36.1 
33.3 
37.8 
41.2 
43.6 
38.6 
38.6 
38.6 
38.6 

45.0 
46.0 
45.2 
40.1 
42.6 
45.0 
44.1 
45.7 
44.0 
42.8 
38.2 
36.6 

20.6 
27.4 
23.0 
22.8 
23.0 
22.5 
21.2 
23.5 
23.6 
26.4 
26.8 
25.0 

27.1 
20.1 
31.8 
36.2 
38.2 
40.3 
40.0 
36.1 
37.8 
42.0 
43.1 
46.2 

46.6 
45.3 
47.0 
40.0 
60.4 
60.6 
60.2 
40.4 
48.8 
46.3 
46.2 
46.8 


1024 


00.2 
101.4 
100.3 
05.3 
87.0 
83.4 

U.l 

03.2 
04.0 
07.3 
101.6 

106.3 
104.8 
104.2 
102.7 
101.0 
101.8 
102.8 
102.1 
102.0 
106.4 
100.2 
112.1 

100.0 
107.3 
106.6 
106.2 
106.1 
107.0 
107.6 
110.1 
111.3 
111.1 
108.2 
104.4 

106.4 
106.7 
108.4 
107.0 
100.5 
107.8 
107. 1 
105.6 
104.3 
102.0 
101.1 
101.7 

107.6 
100.6 
100.2 
108.0 
108.1 
100.0 
100.6 
111.1 
114.1 
116.4 
117.3 
110.1 


62.0 
62.0 
62.1 
61.4 
40.4 
48.0 
48.1 
40.3 
62.1 
63.6 
64.1 
66.1 

66.1 
66.4 
66.8 
66.8 
64.0 
64.7 
65.4 
66.3 
54.8 
65.7 
66.3 
67.0 

67.2 
66.6 
66.4 
65.0 
65.3 
66.4 
66.0 
67.6 

60.' 3 
68.7 
68.0 

68.2 
68.0 
69.6 
60.6 
60.3 
61.0 
60.6 
50.6 
60.4 
68.6 
68.4 
68.2 

60!6 
60.3 
68.0 
68.8 
68.0 
67.7 
59.0 
60.0 
61.0 
62.3 
63.1 


46.3 








March 


March 


48 2 


April : 


April 


43 


May 


May....::::::::::: 


38.4 






35.4 


July 


July 


34 1 


August. 


August .. 


30 3 






41.1 






41.3 


November 


November ... 


43.2 


December 


December 


46 6 


1020 
Janoary 


1026 
January 


40.2 


February 


February. 


48 4 


March 


March 


48.4 




April 


46.0 


May — .. . . 


May 


47.0 


June 


June. 


47.1 




July 


47.4 






46.8 


Bentember . . . . 


September 


48. 1 


October 


October . . 


60.8 






52.0 






64.2 


1021 


1026 


61.8 






60.6 


March . 


March 


60.1 


April . 


April .. 


60.3 


l^ay 


May 


60.8 






61.4 


July... 


July 


61.6 


August 


August. 


62.6 


September 


September 


62.4 






61.8 






49.5 


December 


December . . 


46.4 


1022 


1027 


47.2 


February 


February 


48.6 


March 


March 


49.0 


April 


April 


48.2 


it^ay..:.:::.::::::: 


May 


40.3 






46.8 


July.. . . 


July 


46.6 


August 


August .. 


46.0 


September 


September 


44.0 


October 




43.4 






42.6 


December 


December .... 


43.4 


1023 


1028 


48.3 






49.0 


March 


March 


48.0 


April 


April i... 

May 


50.9 


Uay 


49.3 






60.1 


July 


July 


61.0 






52.1 






54.1 


October 


October 


64.6 


November 


November 


66.0 


December 


December 


60.0 



CONCENTRATION OF ECONOMIC POWER 

Federal Reserve index of manufacturing productic-i — Continued 
[1923-26 average for total =100] 



203 





Total 
index 


Points in index 


Year and month 


Total 
index 


Points in index 


Year and month 


Non- 
durable 


Durable 


Non. 
durable 


Durable 


1920 


119.4 
118.0 
119.8 
121.3 
122.7 
126.4 
124.9 
122.4 
120.8 
118.3 
109.8 
100.2 

104.8 
107.2 
104.4 
104.4 
101.3 
97.3 
91.0 
88.3 
88.6 
86.2 
84.5 
81.9 

82.9 
85.9 
87.3 
87.7 
87.0 
82.4 
82.0 
78.0 
76.4 
71.3 
71.4 
72.6 

71.0 
68.1 
64.3 
60 7 
68.5 
58.0 
56.8 
69.2 
65.4 
65.6 
63.4 
64.0 

63.4 
60.9 
56.; 
6.5.4 
77.3 
92.5 
101.9 
91.2 
83.3 
75.5 
70.4 
73.2 


63.3 
62.4 
62.8 
63.8 
63.4 
64.1 
62.9 
63.4 
63.2 
63.3 
60.4 
57.7 

68.6 
67.7 
66.8 
67.0 
55.2 
53.1 
52.4 
60.9 
62.9 
63.0 
62.4 
61.2 

61.3 
63.6 
54.1 
65.1 
56.4 
53.8 
55.3 
64.3 
64.3 
61.3 
60.3 
61.1" 

61.2 
49.6 
47.9 
44.6 
42.0 
42.8 
43.4 
47.4 
51.9 
51.2 
48.4 
48.0 

47.1 
46.0 
43.7 
48.9 
56.1 
63.3 
64 3 

L.s 

51.1. 
50.0 
48. < 


o5:6 

66.9 
57.4 

62: 3 
62.0 
59.0 
67.6 
65.0 
49.4 
42.4 

46.2 
49.5 
47.6 
47.4 
46.1 
44.2 
39.5 
37.4 
35.7 
33.2 
32.1 
30.7 

31.6 
32.3 
33.2 
32.6 
31.6 
28.6 
26.8 
23.7 
21.1 
20.0 
21.0 
21.5 

19.8 
18.4 
16.4 
16.1 
15.6 
15.2 
13.4 
11.8 
13.5 
14.4 
15.1 
16.1 

16.3 
14.9 
12.4 
16.4 
21.3 
29.2 
37.5 
32 6 
2;. 4 
24.6 
19.8 
24.'' ': 


1934 
January 


76.4 
79.7 
82.0 
84.9 
85.9 
83.1 
74.1 
72.3 
68.9 
72.4 
73.6 
84.9 

89.7 
88.4 
86.6 
86.3 
84.3 
84.9 
86.6 
89.3 
01.8 
05.3 
06.0 
101.2 

06.1 
01.6 

S2:f 

101.1 
104.7 
109.4 
109.6 
110. 
110.4 
114.6 
121.2 

114.9 
116.1 
116.7 
118.3 
117.9 
113.9 
114.4 
117.4 
110.3 
100.6 
85.0 
78.8 

76.1 
75.3 
74.9 
73.3 
73.2 
74. 4 
81.5 
SV. i 
S9.4 
..-4. 3 


61.7 
62.4 
52.4 
53.2 
52.9 
60.0 
50.6 
61.3 
49.0 
62.8 
62.7 
56.0 

66.6 
64.1 
53.1 
63.6 
64.2 
63.2 
63.8 
.64.0 
55.0 
56.0 
65.8 
57.8 

67.1 
65.2 
64.0 
66.0 
65.8 
57.6 
tJO. 1 
60.0 
61.0 
60.0 
62.6 
67.4 

62.0 
63.6 
64.2 
64.0 
62.3 
61.8 
58.1 
59.1 
57.4 
53.8 
50.6 
60.8 

60.0 
60.2 
60.1 
48.0 

49.8 
51.3 
54.6 

57.7 
57.8 
66.2 


24.7 


February 


February 


27.2 


March 


March 


20.7 


April 


April 


31.7 


May 


May 


33.0 


June 


June 


33.0 


July 


July 


23.4 






21.0 


September 


September 


10.0 


October 


October.- . . 


19.6 






20.0 






28.0 


1930 


1936 


34.1 






34.4 


March 


March 


33.4 


April . 


April 


32 7 


Miy"".:::::::::: 


May.:::::::::::::: 


30.1 






31.7 


July . 


July 


32.7 


August 


August 


36.3 


September 




30.8 


October 


October 

November . . 


38.4 


November 


4L1 






43:4 


1931 
January . . 


1930 
January 


30.0 






36.4 


March 




37.0 


April 


AprU 


43.7 


May . .. 


May 


45 3 


June 




47.1 


Ju. • 


July 


40.3 


AUftUSt . 


Augu'it 


48:? 


September 


September 


40 


October 




60.4 






51.0 


December 


December 


63.8 


1932 
January 


1937 
January . . 


62.0 


February . , 


February 


62.4 


March 


March 


62.6 


April 


April 


64.3 


May 


May 




June 


June 


62.0 


July 


July 


66.4 


August 


August 


58 4 


September 


September 


62.0 


October . 


October 


46 8 






34.4 


December 


December 


27.9 


1933 


1933 


26.1 




Februnry 

March 




March. 


24 8 


April... 


'^pril 


24 4 


May.--::::::::::: 


May . 


27 4 








July::::::::::::::: 


July 


27 1 


August 




29.0 


Sep tember 


Peptember 

OctoDor 

November ■ 

:.v ember... i 


31 


October 








December 









Source: Board of Governors of Federal Aet. r Adjusted tor Sdasona', -1 

durable and nondurable are the paints whlc>: each tv pe of ou:put i^i-iei-w.ts in tae tc „ 



Vo-a. r.. data on 
ilnv^-cieav'" r.-o)-,!; 



204 



CONCENTRATION OF ECONOMIC POWER 



Exhibit No. 20 
[Chart based on following statistical data appears in teit on p. 
United States Agricultural Production 
[1923-25 averaee =100] 
TOTAL 



1901- 

1902. 
1903- 
1904- 
1905- 
1906- 
1907. 
1908- 
1909- 
1910. 
1911. 
1912. 
1913. 
1914- 
1915. 
1916. 
1917. 
1918. 
1919. 



59. 7 
72.3 
68. 1 
74.7 
75.2 

80. 1 
72.3 
76.4 
75.8 
78.2 
76.4 
87.2 
77.7 
87.0 
94.0 

81. 5 
88.4 
87.0 
90.9 



1920. 
1921. 
1922. 
1923. 
1924. 
1925. 
1926. 
1927. 
1928. 
1929. 
1930. 
1931. 
1932. 
1933. 
1934. 
1935. 
1936. 
1937. 



90. 4 
S7. 
95.3 
98. 5 

100. 4 

101. 1 
105.7 

102. 8 
108. 2 
104. 8 

•'04. 7 

110. 7 

i03. 4 

100. 6 

97. 1 

96.0 

98.4 

112. 



190.. 
1^02. 
1903. 
1904. 
1905. 
1906. 
1907. 
1908- 
1909- 
1910- 
1911- 
1912- 
19]3_ 
1914- 
1915- 
1916- 
1917- 
1018. 
1919. 



PER CAPITA 

1920.. 
1921-. 
1922- . 
1923.. 
1924.. 
1925.. 
1926.. 
1927.. 
1928.. 
1929.. 
1930.. 
1931.. 
1932.. 
1933.. 
1934.. 
1935.. 
1936.. 
1937.. 



103. 

95. 
102. 
101. 
105. 

93. 

97. 

94. 

95. 

92. 
103. 

91. 
100. 
107. 

91. 

97. 

95. 

ys. 



102.4 
91.0 
98.2 



100. 
100. 

99. 
102. 

98. 
102. 



97.6 



96. 
101. 
93. 
90. 
86. 
85. 
86. 
98. 



Prellmtnary. 



Source: The Inde--^ was spliced under the direction of the Central Statistical Board from the indlxes pre- 
pared by F. C. Mills for lSOl-21 and published in his Econon-.lc Tendencies in the United States, and by 
the Bureau of Agricultural Economics for 1922 to date, and published annually in Agricultural Statistics. 
Products of the farm fed to livestock, used for seed, or in other forms of production are not Included. Bureau 
of Census estimates of population of continental United States were used to secure the '^•"' r-noita figures. 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 21 

[Chart based on following statistical data appears in text on p. 32] 

Value of all construction 



205 



Year 


Public works 


Private non- 
residential 


Residential 


Total 


mo 


$1,422,000,000 
1,714,000,000 

1, 678, 000, 000 
2.076,000,000 
1,921,000,000 

2, 264, 000, 000 
2, 546, 000, 000 
2, 470. 000, 000 
2, 786, 000, 000 
2,932,000,000 
2 928.000,000 
3, 023, 000, 000 
2,015,000,000 
1,9.';5,000.000 

1, 902, 000, 000 
2,726,000,000 

2, 684, OOO, 000 
> 3, 556, 000, 000 
'3,072,000,000 


$2, 762, 000, 000 
3,129,1)00,000 
2,186,000,000 

2, 783, 000, 000 

3, 300, 000, 000 
3,513,000,000 
4, 002, 000, 000 

4, 366, 000, 000 
4,477,000.000 
4,385,000,000 
4,581,000,000 
3, 8f)0, 000, 000 
2, 232, 000, 000 
1,097,000,000 

936, 000, 000 

1.180.000,000 

1,461,000,000 

1 2, 523, 000, 000 

'3.805,000,000 


$1,732,000,000 
1,439,000,000 
2,241,a0Orfi00 

3, 524, 000, 000 
4,422,000,000 
4,713,000,000 
5,202,000,000 

4, 757, 000, 000 
4,524,000,000 
4,255.000,000 
3.010,000,000 
1, 805, 000, 000 
1, 262, 000, 000 

444,000,000 
392,000,000 
458, 000, 000 
923, 000, 000 
' 1,807,000.000 
■1,885,000,000 


$5,916,000,000 


1920 


6,336,000.000 


1921 , - 

1922... - 


6,105,000,000 
8, 383, 000, 000 


1023 

1924 


9,643.000.000 
10, 490, 000, 000 


1025. 

1926 _ 


11,810,000,000 
11,593,000,000 


1927 .- 

1928 

1020 


11,787,000,000 
11,572,000,000 
10, 519, 000, 000 


1930 

1931..... 


8,628,000,000 
■ 6,109,000,000 


1932 

1933 


3,496,000,000 
3,230,000,000 


1934 


4,364,000,000 


1035 

1938 


5,068,000,000 
' 7, 886, 000, 000 


1037 


'8,762,000,000 



> Estimated. 

Source: Kuziiets National Ic^me and Capital Fornwtion 1919-35, published by National Bureau of 
Economic Research, table 10. Data for 1930 and 1937 estimated from contracts awarded figures published 
by F. W. Dodge Corporation, except for residential, which is derived from the percent^e change In the 
number of residential units provided in nonfurm areas. 



Exhibit No. 22 

[Chart based on following statistical data appears in text on p. 33] 

Residential units provided for in new nonfarm construction 



Year 


1-family 


2-famUy 


Apart- 
ments 


Total 


1920 


202. 000 
316, 000 
437. 000 
513. 000 
534, 000 
572. 000 
491, 000 
454.000 
436. 000 
316, 000 
185. 000 
147,000 
61.000 
39,000 
42,000 
110,000 
211.000 
I 233. 000 


24,000 

70, 000 

146, 000 

175,000 

173, 000 

157, 000 

117,000 

99,000 

78,000 

51,000 

28,000 

21,000 

6,000 

4,000 

3,000 

6,000 

12,000 

1 14, 000 


21,000 
63,000 
133,000 
183, 000 
186, 000 
208, 000 
241, 000 
257, 000 
239,000 
142,000 
73,000 
44,000 
7,000 
11,000 
10.000 
28,000 
69,000 
< 48, 000 


247,000 


1921 


449,000 


1922 


716,000 


1923 


871,000 


1924 


893, OOO 


1925 .... 


937 000 


1926 


849 OOO 


1927 


810,000 


1928 


753,000 


1929 


509,000 


1930 


286,000 
212, 000 


1931 


1932 


74,000 
54,000 


1933 


1934 . 


56 000 


1935 


144,000 


1936 


282,000 


1937' ■. 


'294,000 







206 CONCENTRATION OF ECONOMIC POWER 

Residential units provided for in new nonfarm construction — Continued 
BY REGIONS 



Year 


Northeast 


North 
Central 


South 


West 


1020 - . . 


65,000 
121,000 
224, 000 
278, 000 
302, 000 
315,000 
300,000 
301, 000 
263,000 
156, 000 
99, 000 
81,000 
24,000 
18,000 
22,000 
39,000 
77,000 


70,000 
109,000 
186, 000 
244, 000 
244, 000 
252, 000 
231, 000 
213, 000 
196, 000 
140, 000 
53,000 
34, 000 
11, 000 
7,000 
8,000 
26, 000 
60,000 


78, 000 
132, 000 
178, 000 
194, 000 
207, 000 
228, 000 
196, 000 
185, 000 
188, 000 
131,000 
78,000 
59, 000 
24,000 
18,000 
17,000 
68.000 
110, 000 


44 000 


1921 „..i 

1922 


87,000 
128,000 


1923 


1924 


140 000 


1925 


142 000 


1928 


122,000 


1927 


111,000 


1928 


106,000 


1929 . . 


81 000 


1930 


56,000 


1931 


38,000 


1932 


15,000 


1933 


11,000 


1934 


8,000 


1935 


21,000 


1936 


45,000 







Source: Wlckens & Foster, Non-farm Residential Construction, 1920-36, Bulletin 65 of the National 
Bureau of Economic Research, Sept. 13, 1936, table 3. 



Exhibit No. 23 

[Chart based on following statistical data appears in text on p. 34] 
Production and capacity of Portland cement mills (barrels) 



Year 


Produc- 
tion 


Practical 
capacity 


Year 


Produc- 
tion 


Practical 
capacity 


1010 


76, 600, 000 
78,500,000 
82,400,000 
92,100,000 
88, 200, 000 
85,900,000 
91, 500, 000 
92, 800, 000 
71,100,000 
80,800,000 
100,000,000 
98, 800, 000 
114,800,000 
137,500,000 


95,500,000 
102,500,000 
106,300,000 
108, 900, 000 
111,100,000 
113^100.000 
115,600,000 
118,200,000 
120,100,000 
119,000,000 
121,500,000 
119,100,000 
121,300,000 
131,900,000 


1924 


149, 400, 000 
161,700,000 
164, 500, 000 
173, 200, 000 
176, 300, 000 
170,600,000 
161. 200, 000 
125, 400, 000 
76,700,000 
63,500,000 
77,700,000 
76, 700. 000 
112,700,000 
116,200,000 


143, 400. 000 


1911 


1925 


158,200.000 


1912 


1926... 


177,200,000 


1913 


1927 


186,400,000 


1914 


1928 


196, 000, 000 


1915. 


1929 


2)0,800,000 


1916 


1930 


215.100,000 


1917 


1931 


221,000.000 


1918. .. . 


1932 


225. 100, 000 


iwS::::::::::::::::::;::: 


1933 


224, 200, 000 


1920...... 


1934 


223, 300, 000 


1921 


1935 


223, 500, 000 


1922- 


1936 


221,000,000 


1923 


1937 


213, 300, 000 









Source: Production data from reports of the Bureau of Mines. Department of the Interior: capacity flgiirei 
are based on data furnished by the Bureau of Mlns with allowance for a seasonal discount of !17 percent. 
Figures compiled by the Division of Economic Research of the Bureau of Foreign and Domestic Commerce. 



CONCENTRATION OF ECONOMIC POWER 



207 



Exhibit No. 24 

[Chart based on following statistical data appears in text on p. 35] 

Pig-iron production and capacity of blast furnaces {gross ions) 



Year 


Production 


Practical 
capacity 


Year 


Production 


Practical 
capacity 


1910 . - 


26.900,000 
23, 400. 000 
29, 400, 000 
30. 600, 000 
23, 100, 000 

29, fiOO, 000 
39, 100, 000 
38, 200, 000 
38. 700, 000 

30, 700, 000 
36, 600, 000 
16, 600, 000 
27, 000, 000 
40, 100, 000 


32,800,000 
34, 400, 000 
36, 600, 000 
36, 600, 000 

36, 600, 000 

37, 200, 000 
37, 900, 000 
39,700.000 
40, 700, 000 
41, 600. 000 

42, 800, 000 

43, 500, 000 
43, 600, 000 
43, 700, 000 


1924 


31, 200, 000 
36, 500, 000 
39, 200, 000 
36, 400, 000 
38, 000, 000 
42, 500, 000 
31, 700, 000 
18, 400, 000 
8,800,000 
13, 300, 000 
16, 100, 000 
21, 300, 000 
31, 000, 000 
37,000,000 


44, 300, 000 


1911 


1025 


45, 000, 000 


1912 


1926 


46, 200, 000 


1913 


1927 


44, 600, 000 




1928 


45, 200. 000 






45, 600, 000 


1916 


1930 - 


46, 500, 000 


1917 


1931 


45, 700, 000 




1932 


44, 600. 000 




1933 


45, 200, 000 






45, 000, 000 


1921 


1035 


44, 100, 000 


1922 


1936 


43, 900, 000 


1923 


1937 


44,800,000 









Source: Data for production and theoretical capacity of blast furnaces were obtained from annual reports 
of the American Iron and Steel Institute and compiled by the Division of Economic Research of the Bureau 
of Foreign and Domestic Commerce of the Department of Commerce. The practical capacity is computed 
by deflating the theoretical capacity by 11.4 percent in order to reflect practically attainable standards. 
The deflation factor Is the result of a survey made about I92."i by a special committee designated by the 
American Iron and Steel Institute. The following statement was made by the committee: "Individual 
plant.'^ or Individual units of plants *11 have a record or maximum production for some one month which 
cannot be maintained throughout a year. Accidents, interruptions for repairs, holidays, and various other 
causes and conditions reduce the yearly output. The figure for practical capacityls the result of thejudg- 
mont of those making the survey, after weighing all information given by the producers in answering th« 
questionnaires and having regard to pa-t records of production as reported to the Institute." (See Annual 
Report of the American Iron and Steel Institute, 1925, p. VI.) 

Capacity production figures exclude the capacity of furnaces which have long been idle. Figures plotted 
(or each year on capacity are for the month of December. 



Exhibit No. 25 

[Chart based on following statistical data appears In text on p. 36] 



Annual production of automobiles 

Number 

1919 1, 933, 600 

1920 2, 227, 300 

1921 1, 596, 800 

1922 2, 544, 176 

1923 4, 034. 012 



1924. 
1925. 
1926. 
1927. 
1928. 



3, 602, 540 

4, 265, 830 
4, 300, 934 

3, 401, 326 

4. 358. 759 



Numbtr 
358, 420 
355, 991 
389, 730 
370, 728 



1929. -_ _ 

1930. __ 

1931 

1932 

1933- - i; 920, 057 

1934 _ 2,753, 111 

1935 3, 946, 934 

1936 4, 454, 115 

1937 _ .- 4, 808, 974 



Source: Bureau of the Census. Includes passenger cars and commercial vehicles. 



Exhibit No. 26 



[Chart based on following statistical data appears In text on p. 37] 

Annual production of biiuminoui coal 

Thoutandi of 
net tont 

1919. 465, 860 

1920 568, 667 

1921 415, 922 

1922 422, 268 

1923 564, 565 

1924 .._ 483, 687 

1925 520. 053 

1926 . 573, 367 

1927 517, 763 

1928 500, 745 

Sooroi: Bareta of Mines. 



Tkousandi of 
net tont 

1929 534, 989 

1930 467, 526 

1931 382, 089 

1932 309, 710 

1933 . 333, 631 

1934 359, 368 

1935 372, 373 

1936 439, 088 

1937 .._ 442, 455 



208 



CONCENTRATION OF ECONOMIC POWER 



Exhibit No. 27 
[Chart based on following statistical data appears in text on p. 38 
Annual production of lumber 
Miltions of board feet 

1919 34,503,000,000 1929 

1920 35,002,000,000 1930 

1921 29,001,000,000 1931 

1922 35,252,000,000 1932 

1923 41,000,000,000 1933 

1924 . 39,501,000,000 1934 

1925 41,000,000,000 1935 . 

1926 39,751,000,000 1936 

1927 37,250,000,000 1937 . ' 

1928 36, 750, 000, OCO 

1 Estimated. 

Source: ieia-28, Board of Qovernors of the Federal Reserve System. 1929-37, Bureau of the Census. 



Millions 
36, 886, 
26, 051, 
16, 523, 
10, 151, 
13, 961, 
15, 494, 
19, 539, 

24, 355, 

25, 600, 



)f board feet 
000, 000 
000, 000 
000, 000 
000, 000 
000, 000 
000, 000 
000, 000 
000, 000 
000, 000 



Exhibit No. 28 

[Chart based on following statistical data appears in text on p. 
Annual production of shoes 



Thousands of pairs 

1919 331,225,000 

1920 . '315.000,000 

]92]_ 286. 771.000 

1 922 323, 877, 000 

1923... 351, 114,000 

1 924 3 13. 229, 000 

] 92.') 323, 552. 000 

1 9 2 G 324,513.000 

1 927 3 13. G08, 000 

J928 344; 352, 000 

» Estimate. 

Source: Bureau of the Census. lucludos boots, shoe*, and slippers other than rubber. 



Thousands <., . . 

1929 361,402,000 

1930 304, 168,000 

1931 316, 239, 000 

1932 313,291,000 

1933 350, 380,000 

1934 357, 121,000 

1935 • .383,761.000 

1936 41,5,227,000 

1937 411, 969, 000 



ExHiRiT No. 29 
[Chart baseil on f'.llov.inc; statistical data appears in text on p. .39] 
Textile fiber consumption by United States manufacturers, 1S70-19S7 



Totnl rayou 
Y?ar fiber non- 
sumplion ' 


Cotton » 


Net raw-silk 
imports « 


Wool con- 
sumption < 


Pounds 
1870.: 


3ules 

800, 000 
1, "00, 000 
1,100,000 
1.100,000 
1,200.000 
1,100.000 
1,300.000 
1. 300, 000 

1, 500, 000 
1,500,000 
1,500,000 
1,900,000 
1,800,000 

2, 000, 000 
1,300.000 
1. 700. 000 
2. 100, 000 
2, 100. 000 
2. 200, 000 
2, 300, 000 
2. 500, 000 
2, 800, 000 
2,800,000 


Pounds 

700, 000 
1, 300, 000 
1, 200, 000 
800, 000 
800, 000 
1,300,000 
1,200,000 
1,000,000 
1, 000, 000 
2,300,000 
2,600,000 
2, 509, 000 
3. 100. 000 
3. 30(1, 000 
3. 400, 000 

3, 900, 000 

4. SCO. 000 
4.S00.000 
6,400.000 
6.800.000 
4. 600, 000 
7, 100, 000 
7,800.000 


Pounds 


1871 . 




2)5, 400, 000 


1872 




262,100,000 


iS73 






1874 




217,800,000 


1S75 .. 




229 900,000 


1876 




229, 000, 000 


1S77 






1378 1 




238, 500, COO 


1879 




278, 200, 000 


1880 




340, 300. 000 


1881 .. 




292, 600, 000 


1882 




338, 700, 000 


1S83 




304 000,000 


1884. 




367, 400, 000 


1.S85 




403, 600, 000 


1SS6 




422, 9(Xj, 000 


1887 ^ 




335. 100, OCO 


1888... 




374. 100, 000 


1889 




389, 500, 000 


1890 




381,700,000 


1891 - 




421, 600, 000 


1892 




458,200,000 



S«d footnotes at end of table. 



CONCENTRATION OF ECONOMIC POWER 209 

Textile fiber consumption by United States manufacturers, 1870-1937 — Continued 



Year 


Total rayon 
fiber con- 
sumption 


Cotton 


Ket raw-sUk 
imports 


Wool con- 
sumption 


1803 


Pounds 


Bales 
2, 400, 000 
2,300,000 
3, 000, 000 

2, 500, 000 
2, 800, 000 
3,500.000 
3, 700, 000 

3, 700, 000 

3, 600, 000 
4. 100, 000 
4,200,000 
4, 000, 000 
4, 300, 000 
4, 900, 000 
5, 000, 000 

4, 50©rQ00 
5. 100. 000 

4, GOO. 000 
1,500.00(. 

5, ion, 000 
5, 500, 000 

5, 600. 000 
5. 600. 000 

6, 400. 000 
6.800,000 
0-. 600, 000 
5. 800. 000 
6. 400, 000 
1, 500, 000 
5, 900, 000 

6, 700, OOO 
5, 700, 000 
6, 200, 000 
6, 500, 000 

7, 200, 000 
fi..*.00.000 
7.100.000 
6. 100, 000 

5. 300."000 
4. 900, 000 

6. 100. 000 
5. 700, 000 
5. 400. 000 
6, 400. 000 
8.000.000 
5, 700, 000 


Pounds 
4, 400, 000 
7,800,000 
9, 100, 000 
4, 900, 000 
10, 000, 000 
8, 400, 000 
11,700,000 
8, 100, 000 
12, 200, 000 
13,600,000 
11,500,000 
16,400.000 
15.400,000 
16, 700, 000 
15,600,000 
18. 600, 000 
22; 100,000 
21,500,000 
20, 700, 000 
24, 700, 000 
27,800,000 
25, 500. 000 
30, 800, 000 
32, 000, 000 
36, 000, 000 
32, 300, 000 
44. 300. 000 
29. 300. 000 
44, 900, 000 
50, 100, 000 
49,100,000 
50, 500, 000 
63.100,000 
65. 600, 000 
72. 700. 000 
74. 700. 000 
85. 900. 000 
72. 300. 000 
82. 000. 000 
71. 300, 000 
64. 600. 000 
53. 500. 000 
64. 200, 000 
58, 100. 000 
55.200,000 
48,700.000 


Pounds 
453, 300, 000 


1894 




436, 600, 000 


1895 




534, 600, 000 


1896 




417,300,000 


1897 




612,800,000 


1898 




361, 900, 000 


1899 




361.100,000 


1900 




425, 100, 000 


1901 




424, 000, 000 


1902 




489, 000, 000 


1903. _. 




457, 400, 000 


1904 




476, 000, 000 


1905 




538. Ono, 000 


1906 




491, 000, 000 


1907 




483, 400, 000 


1908 




446, 500, 000 


1909 




639, 100, 000 


1910 




492, 400, 000 


1911 


7, 100, 000 

2,900,000 

4,000,000 

5, 200. 000 

C, 600. 000 

6, 600. 000 

6, 800. 000 

6, 000. 000 

9, 300, 000 

8,700,000 

19, 800. 000 

24, 700, 000 

:i2. 600. 000 

42,200.000 

58, 300, 000 

60, 600. 000 

100. 100. 000 

100, 500, 000 

133,400.000 

118,800,000 

159,000,000 

155, 300, 00 1 

217,30aO00 

197. 200. 000 

258. 700. 000 

322. 600, 000 

301. 500, 000 

•27.5,000.000 


471, 000, 000 






IPiS 


443, 800, 000 


1914 


540, 000, 000 


1915 

1916 

1917. : . 


678, 100, 000 
725, 100. 000 
694. 900, 000 


1918 


715.000.000 


1919 


627. 600. OCO 


1920 


580. 200, 000 


1921 


658, 100, OCO 


1922 


770, 500, 000 


1923 


755, 300, 000 


1924 


644, 700, 000 


1925 


659. 700. 000 


1926 


614. 600. 000 


1927 




192S . 


050, 000, 000 


1929 


712, 100, 000 


1930 


533, 500, 000 


1C31... 


648, 400, 000 


1932 ... 


498, 400, 000 


1933 


673. 000. 000 


1934 


470, 100, 000 


1935 


855, 000, 0(10 


1936 ■ .. . . 


769, 800. 000 


1937 


675, 100,000 


1038 :„: 


5 498, 200, 000 



Compiled in the Division of Economic Researcti of the Bureau of Foreign and Demcstic Commerce of th« 
Department of Commerce from the following sources. 

' Rayon Organon, Special Supjilement, Textile economics Bureau, Inc., January 1938, p. 16. 

Domestic consumption of rayon fiber includes rayon flJament yarn and rayon staple fiber. Domestic 
consumption is calculated ss the sum of domestic shipments by American producers plus yarn imports for 
consumption. 

' Cotton Production and Distribution, Bureau of the Census, U. 8. Department of Commerce, Bulletin 
167,-p. 58, for the years 1870 to 1904, inclusive; ibid., Bulletin 174, p. 42. for the years, 1905 to 1937, inclusive. 
The 1938 figure is unpublished. 

Mill consumption in the United States of all growths of cotton. Statistics from 1870 to 1904. inclusive, are 
in bales of 500 pounds and include linters; statistics from 1905 to 1938, inclusive, are in running bales and 
exclude linters. As published, the annual figures are for cotton years begininng in September. They are 
presented here as of the year the cotton year ends, i. e.. September 1870 to August 1871 is given as 1871. The 
Bureau of the Census has collected these figures since 1905. They obtained figures from publication of the 
Department of Agriculture for the years 1870 to 1895, and from reports of Latham Alexandbr & Co., for the 
years 1896 to 1904. 

« Foreign Commerce and Navigation of the United States, Bureau of Foreign and Domestic Commerce, 
V. S. Department of Commerce, 1870 to 1937. 

Net raw-silk imports are the difference between general imports and foreign exports. Figures for general 
Imports have not been published since 1933 and "imports for consumption" have been used for this series 
since that year. Waste, cocoons, silk worms, and eggs of silkworms are excluded. Published figures prior 
to 1918 are for fiscal years. The entire series presented here is on a calendar year basis. Although these are 
not manufacturers' consumption figures, they may be used as such because of the immediacy with which 
imports are delivered to manufacturers and the relatively small stocks of silk iLsually carried. 

• Agriculture Yearbook, U. S. Department of Agriculture. 1923, p. 1001. for the years 1870 to 1917. inclu- 
sive. Raw Wool Consumption Report, Bureau of the Census, U. S. Department of Commerce, annual 
reports, for the years 1918 to 1936, inclusive. The 1937 figure is preliminary and unpublished. 

The series from 1870 to 1917, inclusive, is "apparent wool consumption" and is the sum of domestic produc- 
tion and the excess of imports over all exports. The figures are not on any one comparable base but ary 
roughly comparable to "greasy shorn," althoughsome fleece and scoured wool are included and the grease 
wool varies in the amount of grease by years and by origin of the wool. The figures, therefore, although not 
strictly comparable, represent the general trend from 1870 to 1917, inclusive. Mill-consumption figures 
the years 1918 to 1937, inclusive, are given on a greasy shorn basis in order that they may be more nearly 
comparable with the earlier series. 

• Estimated on basis of first 10 months of the year. 



210 CONCENTRATION OF ECONOMIC POWER 

Exhibit No, 30 

[Chart based on following statistical data appears In text on p. 40] 

Cigarette production 



Millions of 
pound) 

1919 53, 112 

1920 44, 616 

1921- - 50.856 

1922 _ 53,556 

1923 - 64, 440 

1924 71,004 

1925 79,956 

1926 : - 89,436 

1927.. --- 97, 176 

1928 105, 912 

> Estimate based on data for first 8 months. 

Source: Tax-paid withdrawals as reported to the Bureau of Internal Revenue and published In the Survey 
of Current Business by the Department of Commerce. 



Millions 0/ 
pounds 

1929 - 119, 028 

1930 - --- 119, 616 

1931.. 113, 448 

1932 103, 584 

1933 111. 756 

1934 - 125, 604 

1935 -- 134, 604 

1936- 153, 187 

1937 162, 626 

1938 ' 164, 184 



Exhibit No. 31 

[Chart based on following statistical data appears In text on p. 41] 

Department store sales 

[1923-25 average =100] 



Year 


Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


Aug. 


Sept. 


Oct. 


Nov. 


Dec. 


igi9 


66 
90 
92 
83 
91 
99 
99 
106 
107 
108 
110 
107 
99 
80 
62 
73 
76 
81 
93 
90 


71 
89 
92 

11 
101 
103 
105 
108 
106 
110 
108 
99 
79 
62 
73 
77 
83 
95 
88 


72 
95 
90 
85 
95 
99 
102 
103 
107 
107 
113 
107 
100 
73 
6« 
76 
79 
84 
93 
86 


72 
91 
89 
86 
100 
98 
103 
103 
105 
106 
109 
105 
100 
74 
64 
76 
75 
84 
93 


69 
96 
87 
87 
98 
97 
102 
109 
105 
107 
109 
105 
97 
72 
66 
75 
74 
87 
93 
78 


76 
96 
87 
88 
101 
100 
102 
105 
106 
107 
113 
103 
95 
68 
67 
73 
79 
87 
93 
82 


80 
98 
87 
86 
98 
96 
100 
106 
105 
110 
109 
100 
94 
65 
69 
73 
80 
90 
92 
83 


80 
97 
84 
88 
101 
90 
101 
108 
111 
107 
111 
102 
89 
64 
74 
76 
77 
87 
93 
83 


83 
05 
82 
91 
100 
101 
101 
106 
104 
112 
113 
09 
85 
67 
68 
74 
81 
88 
04 
86 


81 
02 
86 
03 
101 
09 
111 
109 
107 
108 
111 
101 
85 
68 
70 
74 
78 
00 
03 
84 


86 
96 
83 
92 
100 
100 
104 
106 
108 
108 
108 
99 
86 
64 
67 
75 
82 
94 
91 


80 


1920 


00 


1921 . ■ 


84 


1922 


03 


1923. 


00 


1924 


09 


1925 


104 


1929 


107 


1927..., 


10« 


1928 


111 


W29 


110 


1930 


00 


1931 

1932 


83 
62 


1933 


60 


1934 


77 


1935 


83 


1936 


03 


1937 


89 


1938 ... 











Source: Board of Oovemors of Federal Reserve System. It is an index of dollar sales, adjusted for leason&l 
variation. 



CONCENTRATION OF ECONOMIC POWER 



211 



Exhibit No. 32 
[Chart based on following statistical data appears in text on p. 42] 
Index of freight-car loadings 
[1923-23 average^ 100] 



1919. 
1020. 
1921. 
1922. 
1923. 
1924. 
1925. 
1926. 
1927. 
1928. 
1929. 
1930. 
1931. 
1932. 
1933. 
1934. 
1935. 



Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Deo. 



Source: Board of Governors of Federal Reserve System. Seasonally adjusted Index of daily average 
volume of loadings, based on data collected by the Association of American Railroads. 



Exhibit No. 33 

[Chart based on following statistical data appears in text on p. 44] 

Nonagricultural employment in the United States 

(Thousands of jJersons] 

TOTAL 



January 

February 

March 

AprU 

May 

June 

July 

August 

September 

October 

November 

December 

Average. 



1929 



34,876 
35, 625 
35,355 
35, 857 
36,254 
36,649 
36,690 
36,989 
37,049 
37,026 
36,406 
35,620 

36, 141 



34,630 
34, 342 
34,281 
34, 534 
34,659 
34, 491 
34, 079 
33,788 
33, 716 
33,462 
32,834 
32,282 

33,925 



31,456 
31,071 
31,213 
31, 512 
31,645 
31, 434 
31,069 
30,826 
30, 720 
30,397 
29,760 
29,438 

30,870 



28,420 
28,239 
28,027 
27,726 
27,428 
27,055 
27,063 
27.409 
27,628 
27, 332 
27,000 

27,661 



26,289 
26,228 
25,946 
26, 318 
26,723 
27,397 
27,883 
28,655 
29,278 
29,631 
29,326 
29, 143 

27,726 



29,247 
29,834 
30, 269 
30,686 
30,786 
30,541 
30,563 
30,404 
30, 726 
30, 583 
30, 714 

30,259 



31,272 
31.348 
31,419 
31, 404 
31. 677 
32,011 
32, 336 
32.218 
32. 316 



1936 



31.610 
31,628 
32,064 
32, 619 
32, 994 
33,312 
33. 511 
33,698 
34. 032 
34. 308 
34.212 
34,423 



31,482 33,201 



33, 596 
33.923 
34,411 
34.683 
34, 993 
35, 062 
35.034 
36.039 
35. 106 
35, 020 
34.233 
33, 689 

34, 557 



32. 177 
32,017 
31.976 
32. 106 
31,834 
31.781 
31,756 
31.960 
32, 438 
32. 693 



212 



co^'CKNTRATIO^■ OF ix'ONOMic powp:r 

NonagriculUtral eynployment in the United Stales — Continued 

INDUSTRY 

(ManufactuiiDg, mining, construction, transportation, and public utilities) 





1929 


1930 


1931 


1932 


1933 


1934 


1935 


1936 


1937 


1938 




15, 138 
15,359 
15,564 
15,977 
16, 281 
16,519 
16,682 
16,900 
16,886 
16,825 
16, 238 
15, 456 

16, 153 


14, 874 
H,779 
14, 763 
14,926 
15,004 
14,916 
14,681 
14, 536 
14, 426 
14, 226 
13, 687 
13, 109 

14, 494 


12, 538 
12, 520 
12, 596 
12,806 
12, 879 
12, 788 
12, 692 
12, 630 
12,514 
12,225 
11,727 

12,441 


10,985 
10,937 
10, 803 
10, 635 
10,443 
10, 242 
10,051 
10,163 
10, 457 
10,612 
10, 414 
10, 051 

10,483 


9,672 
9,706 
9,499 
9,670 
9, 994 
10,500 
10, 945 
11,428 
11,760 
11,837 
11,606 
11,277 

10, 658 


11,072 
11,430 
11,798 
12,073 
12, 355 
12,400 
12,203 
12,242 
11,901 
12, 137 
11,954 
11,883 

11,954 


11,843 
12, 075 
12, 242 
12,417 
12,488 
12,488 
12,472 
12,717 
12,822 
13,017 

12; 741 

12, 517 


12, 485 
12, 509 

12, 756 

13, 105 

13, 394 
13, 616 
13,784 
13,982 
14, 139 
14, 323 

14, 256 
14, 205 

13,546 


13,832 
14,071 
14,318 
14,508 
14, 745 
14, 742 
14,786 
14, 862 
14, 789 
14, 705 
14,045 
13,232 

14,386 


12, 436- 




12,349 


March. L. 

April -" 


12,288. 
12, 162 
12,061 




11,984 


July 


12,011 




12,283 




1 12, 583 




' 12, 802 


November - 








Average 





DISTRIBUTION AND SERVICE 
(Trade, service, finance, and government) 





12,611 
12, 536 
12,636 
12, 678 
12, 736 
12, 777 
12, 755 
12,849 
12, 940 
13,005 
13,004 
13,016 

12, 794 


12, 640 
12, 488 
12, 430 
12,488 
12, 516 
12, 447 
12,285 
12, 179 
12, 244 
12,231 
12,187 
12, 249 

12, 365 


12,020 
11,658 
11,733 
11,822 
11,789 
11,779 
11,534 
11,373 
11,409 
11,416 
1 1 . 316 
lI,-3^2 

11,603 


10,994 
10, 876 
10,841 
10,805 
10, 707 
10, 628 
10, 477 
10, 397 
10, 471 
10,547 
ID, 485 
10,543 

10,648 


10,254 
10, 181 
10,111 
10,304 
10,337 
10, 465 
10, 470 
10, 730 
11,004 
11,153 
11,174 
11,313 

10, 625 


11,116 
11,216 
11,408 
11,522 
11,621 
11,634 
11,557 
11,515 
11,678 
11,732 
11,760 
11,961 

11,560 


11,596 
11,649 
11,736 
11,900 
11,861 
11,912 
11,892 
11,893 
12, 107 
12, 222 
12, 255 
12, 498 

11,960 


12, 046 
12,031 
12, 192 
12, 363 
12,397 
12,453 
12, 457 
12,421 
12, 590 
12, 682 
12.724 
1.', 994 

12, 446 


12,548 
12, 584 
12, 782 
12, 809 
12,860 
12,909 
12,836 
12, 755 
12,905 
12, 927 
12,840 
13, 032 

12,816 


12, 426 


February 


12, 353 


March.. 


12,375 


June . -. 


12, 605 
12, 420 
12, 43C 


July 


12,393 




12, 325 




' 12,508 




1 12, 542 


November 




December 




Average 





PROPRIETORS, SELF-EMPLOYED AND CASUAL WORKERS 





7,127 


7,116 


6.898 


6,629 


6. 363 


6.574 


6,863 


7,079 


7,216 


7,315 


February 


7,130 


7.075 


6. 893 


6,607 


6,341 


6.601 


6,874 


7, 088 


7,268 


7,315 


March 


7,155 


7.088 


6.884 


6. 595 


6,336 


6.628 


6,910 


7.116 


7.311 


7,313 


April 

May - 


7,202 


7.120 


6.884 


6, 587 


6.344 


6.6M 


6.955 


7.151 


7,366 


7,339 


7,237 


7,139 


6,877 


6. 575 


6, 392 


6.710 


6.999 


7,203 


7.388 


7.353 




7, 253. 


7, 128 


6,867 


6, 558 


6. 432 


6. 752 


7.019 


7.243 


7,411 


7,361 


July 


7,253 


7.113 


6,843 


6.527 


6.468 


6.781 


7,040 


7,270 


7.412 


7,352 


August 


7,240 
7,223 


7.073 
7.046 


6, 823 
6,797 


6, 503 
6,481 


6.497 
6,514 


6.806 
6.825 


7.067 
7,082 


7,295 
7,303 


7,422 
7,412 


7,352 


September 


17,347 


October 


7,196 
7, 164 
7,139 


7.005 
6. 960 
6,924 


6,756 
6,717 
6,676 


6.460 
6,433 
6,406 


6.541 
6. 546 
6,553 


6,857 
6, 869 
6,870 


7.096 
7.083 
7,077 


7,303 
7.232 
7,224 


7,38S 
7,348 
7,325 


' 7, 349 






December 





Average 


7,194 


7,066 


6,826 


6,531 


6,444 


6,745 


7,006 


7,209 


7,356 





Source: Bureau of Labor Statistics. Estimated from reports to the Bureau of the Census, the Interstate 
Commerce Commis.sion, the Bure:iu of Labor Statistics, and a wide variety of other governmental and 
nongovernmental agencies. 



CONCENTRATION OF ECONOMIC POWER 



2ia 



Exhibit No. 34 

[Chart based on following statistical data appears in text on p. 45] 

Employment and pay rolls in manufacturing durable-goods group 

[1923-25 average =100] 





Employ- 
ment 


Pay rolls 




Employ- 
ment 


Pay rolls 


1923 


97.7 
101.0 
103.6 
105.6 
106.6 
107.4 
106.1 
105.8 
105.4 
104.6 
103.7 
101.6 

100.6 
102.6 
103. 8 
103.4 
99. a 
94.8 
90.7 
90.6 
91.4 
92.8 
92.5 
94.3 

95.3 
97.3 
98.7 
99.9 
100.1 
99.2 
97.9 

ioo!i 

102.0 
102.3 
102.2 

101.3 
102.9 
103.9 
104.3 
103.7 
103.2 
101.8 
103.0 
103.5 
103.0 
100.8 
98.6 

96.0 
97.9 
99.1 
99.3 
99.2 
98.2 
95.8 
96.4 
95.9 
95. 2 
92.9 
91.5 


94^9 
100.7 
104.0 
109.0 
109.2 
103.6 
105.0 
104.5 
107.9 
106.7 
103.8 

98.3 
106.6 
107.8 
106.7 
100.9 
92.7 
83.6 

92^0 
90.8 
95.4 

92.7 
99.9 
102.2 
101.6 
103.3 
100.2 
06.3 
98.5 
98.1 
105.8 
106.1 
106.6 

99.9 
106.4 
108. 6 
107.8 
106.5 
106.1 
100.2 
104.7 
104.6 
108. 2 
103.9 
101.1 

93.6 
101.8 
104. 8 
104.6 
104.7 
101.2 
94.8 
98.5 
9r.. 1 
97.7 
93.7 
94.7 


1928 


90.3 
92.8 
94.9 
96.1 
97.7 
98.2 
97.4 
99.9 
101.3 
101.6 
101.0 
100.6 

101.0 
103.9 
105.9 
108.0 
109.3 
109.3 
109.2 
110.3 
109.8 
107.7 
102. 5 
97.6 

94.8 
95.3 
95.1 
94.9 
93.8 
90.8 
86.3 
83.7 
82.3 
80.9 
78.1 
75.7 

72.3 
72.4 
73.5 
72.6 
71.9 
69.8 
67.1 
65.8 
65.0 
62.2 
60.6 
60.2 

58. 1 
5S.8 
57.5 
55.5 
54.0 
52.5 
50.1 
48.9 
49.2 
49. G 
50.0 
49.6 


90.1 


Ffthninrv 




98.0 


March 


March 


101.0 




April 


101.4 


tfa? 




103.9 


j^ 




103.0 




July. 


99.0 




August 


104.5 


g "^""i""' 


September. . 


104.8 




October.. 


109.4 






106.1 




December 


105. 8 


1924 


1929 


102.3^ 


T^inmrv 




111.5 


|^,y.gll 


March 


114.(5 


Aoril 


April - 


117.5 




May 


118.7 






115.8 


July 


July 


109.8 




August 


115.4 






114. R 




October -- 


113.4 




November 


102.9 




December 


97.4 


1925 


1930 


91.(1 


iSirniiv 


February 


96.1 


March 


March 


96 8 




April - 


97.0 


Xy " 


May.... 


94.8 




June 


90.3 


July 


July. - 


79.1 






76.0 






75.4 




October 

November 


74.4 


November 


C8 6 






66.1 


1926 


1931 
January 


SO 1 


r^lrnSv 


February ..- 


f^rr 




March 


65.2 




April 


64. R 


May 


May.. 


63.7 


j^^ 


June 


58.7 


Tnlv 


July... .- 


53.6 






52.2 






48.8 


Ortober 


October 


47.7 


November 




45.3 


December 


44 9 


1927 


1932 


40.7 


Fphninrv 


February 


41 S 


March 


March 


39 5 


April 


April 


36 9 


May" 


May - 


35.8 






32.6 




July.... 


29.4 




August 


27.9 




September 




October 


October.. 


29.8 






29.6 


December 


December 


29 



214 CONCENTRATION OF ECONOMIC POWER 

Employment and pay rolls in manufacturing durable-goods group — Continued 





Employ- 
ment 


Pay rolls 




Employ- 
ment 


Payrolls 


1933 
January 


47.7 
48.6 
46.8 
47.9 
80.9 
55.3 
69.8 
66.0 
68.3 
68.0 
66.1 
65.8 

66.2 
69.6 
73.8 
77.0 
78.8 
78.1 
75.7 
73.6 
71.5 
70.2 
69.8 
72.3 

74.7 
78.6 
80.6 
81.7 
81.2 
78.6 
79.0 
80.6 
81.6 
86.5 
86.7 
86.3 


27.5 
27.8 
25.8 
27.6 
32.0 
3R.4 

45.2 
46.0 
46.3 
43.6 
43.8 

43.2 

49.7 
65.0 

6l!2 
69.5 
51.7 
62.1 
47.6 
48.7 
48.7 
53.3 

65.8 
62.4 
64.4 
65.7 
63.5 
60.9 
59.2 
63.6 
66.6 
71.4 
72.9 
74.6 


1936 
January . .. 


84.6 
84.4 
86.0 
88.6 
90.6 
01.4 
01.7 
91.0 
93.0 
96.7 
08.7 
100.5 

07.0 
101.2 
104.8 
107.4 
109.0 
107.5 
107.8 
107.0 
106.3 
106.6 
100.8 

01.7 

81.7 
80.1 
79.3 
77.0 
75.0 
72.4 
70.3 
71.8 
75.3 
79.0 


60 


February 


68.0 


March 


March 


74.2 




April 


70.3 


ivfav 


May 


82.1 






82.6 


July 


July 


70.7 




August 


80.8 




September 


81.0 


October 


October ... 


80.6 






03.4 




December 


08.4 


1034 


1037 


91.2 






97.9 




March 


106.1 


Aoril 


April 


113.3 


I^av 


IVfay 


114.6 






111.1 




July 


107.3 




August 


110.6 




September 


105.8 




October 


108.2 






94.8 


December 


December 


81.0 


1036 


1038 


67.1 






67.2 




March 


67.4 


Anril 


April 


65.0 


Mav 


May . . . 


64.3 






61.7 




July.. 


58.0 


AURUSt 


August 


63.5 




September 








75.0 


November . 















Source: Bureau of Labor Statistics. The Indexes are not adjusted for seasonal variation. 



Exhibit No. 35 

[Chart based on following statistical data appears in text on p. 46) 

Employment and pay rolls, all manufacturing industries 

11923-25 average=1001 





Employ- 
ment 


Pay rolls 




Employ- 
ment 


Pay roU» 


1023 
January 


100.2 
102.4 
104.6 
105.1 
105.2 
105 7 
104.6 
104.8 
105.3 
104.0 
102.8 
101.1 


93.9 
97.8 
102.6 
103.8 
107.3 
107.2 
102.9 
103.1 
103.8 
105.9 
103.9 
102.7 


1924 
January 


100.1 
101.7 
101.9 
100.1 
96.8 
93.8 
90.6 
92.0 
94.2 
95.0 
94.6 
96.1 


08.0 






104.6 


March 


March 


104.8 


April 


April 


102.0 


Uiy 


May 


97.0 


June 


June .. . . . 


91.0 


July. 


July.. 


85.3 






89.1 


September 


September , 


92.4 


October 


October 


94.0 


November. .... 


November 


03.1 


December 


December 


07.0 



CONCENTRATION OF ECONOMIC POWER 215 

Employment and pay rolls, all manufacturing industries — Continued 





Employ- 
ment 


Pay rolls 




Employ 
ment 


Pay roU* 


1925 
January . 


96.6 
98.3 
99.2 
99.1 
98.6 
98.4 
98.3 
100.0 
101.9 
102.6 
102.2 
101.8 

101.0 
102.0 
102.6 
101.8 
100.8 
100.8 
99.7 
101.8 
104. 
103.6 
101.6 
100.3 

98.6 
100.2 
100.9 
100.3 
99.6 
99.7 
98.6 
99.9 
101.2 
100.2 
98.0 
96.5 

95.3 
97.2 
98.2 
97.8 
97.8 
98.6 
98.4 
101.1 
103.3 
103.5 
102.6 
102.1 

101.7 
104.1 
105.4 
106.7 
106.5 
106.8 
107.3 
109.2 
110.3 
109.0 
lot. 6 
100.7 

98.2 
98.3 
97.9 
97.3 
95.6 
93.6 
90.4 

90.' 7 
88.7 
85.4 
82.9 


96.0 
101.0 
102.8 
100.4 
101.4 

97- 5 
100.1 

99.4 
105.3 
105.1 
105.5 

101.6 
105.7 
107.2 
104.9 
103.5 
103.7 
99.4 
103.8 
105.1 
108.0 
104.3 
103.6 

98.6 
104.8 
106.6 
105.0 
104.8 
103.2 

102:5 
102.1 
102.7 
98.9 
100.0 

96.0 
102.0 
103.5 
101.3 
102.3 
102.7 
100.2 
104.6 
106.2 
109.5 
106.2 
»06.9 

103.8 
110.8 
113.0 
114.1 
114.3 
112.7 
108.6 
113.6 
114.4 
113.7 
104.9 
101.2 

96.6 
99.6 
99.7 
98.6 
96.1 
92.9 
85.0 
83.8 
84.8 
82.9 
77.3 
75.4 


1931 
January 


80.1 
80.8 
81.2 
81.2 
80.6 
78.8 
77.7 
77.9 
78.3 
75.6 
72.7 
72.0 

70.0 
71.2 
70.1 
67.8 
65.2 
63.2 
61.0 
62.7 
66.1 
67.2 
66.3 
65.1 

a? 

62.3 
63.9 
66.8 
71.6 
76.2 
81.3 
85.0 
84.6 
81.2 
79.5 

78.8 
83.7 
87.2 
88.8 
89.0 
87.8 
86.3 
87.4 
83.6 
85.9 
84.3 
86.6 

86.6 
89.6 
91.1 
91.3 
90.0 
88.3 
88.9 
91.7 
93.8 
95.2 
94.5 
94.0 

92.1 
92.2 
93.4 
94.7 
95.4 
95.9 
97.1 
99.9 

101.9 

103.2 

103.3 

104.4 


70 S 








March 


March 






April 




May 


May 


73 6 




June 


69 


July 


July 




August 


August 


66 4 


September ... ... 


September . 


63 8 


October . . . . . 


October 


61 8 








December .- 


December 


57 8 


1026 
January . . - 


1932 
January 


54.0 






March 


March 




April 


April 


49 6 


May 


May..... 










July 


July 


40 4 




August 


41 4 








October 






November 


November .. 


43 6 




December 


42 4 


1927 
January ... 


1933 
January .... 


40 3 


February .. 


February 


41 4 


March 


March 


38.3 








Mav 


May". 


44 4 




June 


49 1 


July 


July- 


52.7 








September - 


September 


61 3 


October 


October 


61 1 






57.3 








1928 


1934 


56.1 






62.9 


March - 


March 


67.2 


\pril . .. 


April 


69.6 


M^;::::::;:::::::::::::::: 


May 


69.7 






67.4 


July 


July 


62.8 


August - ..... 


August 


65.1 




September 


60.8 




October 


64 


November . 


November. . .. 


62.5 


December .- 


December 


66.2 


1929 


1936 


67.6 


February 


February 


72.6 


March 


March .... 


74.3 


April 


April 


74.4 


May 


May 


71.7 






69.0 


July 


July . ... 


69.1 


August 


August 


74.0 






76.7 




October 


79.4 


November 


November 


78.6 


December 


December 


80 4 


1930 


1936 


76.7 






76.6 


March 


March .... 


80.3 


April .. . .. .. 


April 


82.3 


M^:::::: :::::::::::::::::: 


May 


83.9 


June 




84.1 


July 


July 


83.4 






87.1 


September 


September 


86.9 


October 


October 


92.6 






94.0 


December 


December 


98.8 



124491— 39— pt. 1 



-15 



2] 6 CONCETS'TRATION OF Kt'ONOMIC POWER 

Emplotjment and pay rolls, all manufacturing industries — Continued 





Employ- 
ment 


Pay rolls 




Employ- 
ment 


Pay rolls 


1937 


102.7 
105.3 
107.7 
108.8 
108.9 
107. 5 
108.0 
109.1 
109.0 
107.2 
101.1 
94.5 


94.4 
99.7 
105.5 
109.3 
109.7 
107.0 
104.6 
108.2 
104.4 
104. 5 
92.9 
84.2 


1938 
January 


87.8 
88.2 
87.7 
85.7 
83.4 
81.6 
81.9 
85.7 
88.8 
89.5 


75.0 


February 


February 

March 


76.9 




77.1 


Ant-il 


April 


74.6 


Mav ' 


May 


72 9 






70.8 


July 


July... 


70.fi 


August 




76.8 




81.0 




October 


83.7 


November 















Source: Bureau of Labor Statistics. The indexes are not adju-sted for seasonal variation. 



Exhibit No. 36 

[Chart based on following statistical data appears in text on p. 50] 

Employment and pay rolls in manufacturing nondurable goods group 
[1923-25 average=100] 





Employ- 
ment 


roll^ 




Employ- 
ment 


Pay 
roUs 


1923 


102.6 
103. 9 
105. 6 
104.6 
104.0 
104.1 
103.2 
103.8 
105.2 
103. 3 
101.8 
100.7 

99.6 
100.9 
100.2 
97.1 
94.5 
92.8 
90.6 
93.2 
96.9 
97.0 
96.4 
97.7 

97.8 
99.3 
99.7 
98.4 
97.1 
97.7 
98.7 
101.3 
103.7 
103.2 
102. 2 
101.4 


99.0 
101.! 
104.7 
103.6 
105.5 
104.8 
102.1 
101. 
103.0 
103.6 
100.7 
101.4 

99.6 
102.2 
100.8 
96.8 
93.9 
91.0 
87.2 
91.6 
96.6 
97.4 
95.6 
100.1 

99.7 
102.2 
103.4 
99.1 
99.3 
98.1 
98.7 
101.9 
101. 
104. 9 
103.9 
104.4 


1926 


100.7 
101.1 
101.2 
99.4 
98.0 

97.' 7 
100.7 
104.4 
104.2 
102.4 
101.9 

101.1 
102.3 
102.6 
101.2 
100.0 
101.1 
101.2 
103.3 
106.2 
104.9 
102.8 
101.3 

100. 1 
101.3 
101.3 
99.4 
98.0 
98.7 
99.4 
102.2 
105.1 
105. 4 
104.1 
103.6 


103.5 


February 


February . ... 


105.0 


March 


March 


105.6 


April 


April 


101. fl 


May 


May 


100.2 


June 


June - - - 


101. 1 


July 


July 


98 6 






102.8 


September 


September.- 


105.6 


October 


October 


107.9 






104.0 






106.3 


1924 
January 


1927 
January 


104.3 






108.? 


March 


March 


108.5 


April 


April 


105.5 


May 


May 


101.9 


June 


June 


105 4 


July 


July 


103.9 






107.0 


September. 


September 


108.8 


October 


October 


108 3 






104.7 






106.0 


1925 
January . . 


1928 
January 


103. 8 






106.4 


March 


March 


106.3 


April 




101.2 


May 


May 


100.6 


June . . 


June 


102.3 


July 


July 


101.5 






104.8 






107: 7 






109.7 








December 




108.2 



CONCENTRATION OF ECONOMIC POWER 217 

Employment and pay rolls in manufacturing nondurable goods group — Continued 



January... 
February.. 

March 

April 

May 

June 

July 

August 

September. 

October 

November- 
December - 



January 

February.. 

March 

April 

May 

June -. 

July 

August 

September. 

October 

November.. 
December.. 



January 

February... 

March 

April 

May 

June. 

July 

August 

September. 

October 

November.. 
December.. 



January 

February.. 

March 

April 

May 

June 

July 

August 

September. 

October 

November. 
December.. 



January 

February... 

March 

April 

May 

June 

July 

August 

September. 

October 

November. 
December.. 



Employ- Pay 
ment rolls 



102.3 
104.3 
105.0 
105.4 
103.9 
104.4 
105.fi 
108.2 
110.8 
110.2 
106.6 
103.6 



101.2 
100.5 
99.6 
97.4 
96.3 
94.3 
95.3 
98.6 



87.4 
87.8 
89.5 



81.4 
83.0 
82.1 
79.5 
75.9 
73.4 
7L5 
75.9 
82.2 
83.9 
81.8 
79.8 



80.1 
77.0 
79.1 
82.0 
87.1 
91.8 
97.0 
100.8 
100.3 
95.6 
92.5 



105.6 
110. n 
111.2 
110.3 
109. 5 
109. 2 
107.2 
111.3 
114.2 
114.0 
107.1 
105.4 



102.6 
103.5 
103. 
100.3 
97.6 
95.7 
91.6 
92.6 
95.3 
92.5 
87.0 
85. 8 



82.8 
86.6 
87.9 
86.0 
84.8 
82.4 
81.1 
82.2 
80.6 
77.7 
72.9 
72.3 



59.1 
56.1 
52.8 
56.4 
62.1 
63.8 



54.6 
56.6 
52.4 
54.8 
58.3 
63.3 
67.3 
73.5 
78.4 
77.7 
72.5 
70.8 



January 

February... 

March 

April 

May 

June 

July 

August 

September. 

October 

November., 
December. 



January 

February... 

March 

April.. 

May..'. 

June 

July... 

August 

September. 

October 

November.. 
December.. 



January... 
February.. 

March 

April 

May. , 

June 

July ,. 

August 

September. 

October 

November. 
December.. 



January.. 
February. 

March 

April 



Ma; 



June 

July 

.\UgUPt 

September. 

October 

November. 
December.. 



January 

February... 

March 

April 

May 

June -. 

July 

August 

September. 
October 



Employ- 
ment 



98.0 
100.0 
101.1 
100.5 



97.2 
98.2 
102.2 
105.5 
10».5 
102.0 
101.3 



99.2 
99.6 
100.5 
100.6 
100.0 
100.1 
102.2 
107.5 
110.4 
109.3 
107.6 
108.0 



107.3 
109 3 
110.5 
110.1 
108.9 
107. 5 
108.2 
111.1 
111.6 
107.8 
101.4 
97.2 



9.5.9 
95.8 
94.0 
91.5 
90.3 
92.9 

10L6 
99.4 



Source: Bureau of Labor Statistics. The Indexes are not adjusted for seasonal variation. 



218 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 37 

[Chart based on following statistical data appears In text on p. 51] 

Employment and pay rolls, locomotive 

[1923-25 average- 100] 

PAY ROLLS 



Year 


Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


Aug. 


Sept. 


Oct. 


Nov. 


Dec. 


1923 


139 3 


152,4 


157.6 


157.1 


169.6 


178.8 


190.2 


185. 1 


179.5 


176.9 


168,2 


164.6 


1924 


92.5 


74.4 


65,4 


67.0 


73. 5 


82.2 


78.8 


61. 8 


57.4 


63.6 


76.7 


81.8 


1925 


fi5.fi 


62.9 


65.4 


64,6 


65.6 


58.8 


68.3 


49.7 


51.7 


52.6 


68.3 


64.9 


1926 


7fi 4 


79.fi 


81.1 


78,7 


80,2 


84.4 


84.6 


79.8 


77.2 


78.7 


77.9 


88.6 


1927 


fi8,2 


70.fi 


67.7 


60,3 


56.4 


62.8 


57.1 


59.6 


60.0 


60.1 


43.2 


40.2 


1928 


40.2 


43.4 


42.2 


38.8 


40.0 


44. ;; 


40. 5 


39.1 


39.7 


36. 3 


34.6 


36.4 


1929 


38.8 


41.8 


49.4 




64.3 


03.3 


68.4 


67.7 


64.6 


63.8 


69.4 


69.3 


1930 


59.2 


60.7 


fi2.6 


64.4 


62.8 


61.0 


52.4 


47.4 


44.2 


36.2 


33.9 


32.9 


1931 


19.fi 


21.3 


25. 


23. H 


21.1 


20.6 


18.8 


16.2 


16.1 


12. V 


11.4 


12.1 


1932 


11.2 


11.6 


11.8 


12.0 


11.1 


9.3 


7.U 


7.6 


6.2 


6.2 


6.3 


6. J 


1933 


5.fi 


6.1 


4.4 


4.1 


4.2 


4.6 


6.6 


6.1 


6.8 


8.7 


8.9 


8.0 


1934 


7.7 


7.9 


9.3 


11.1 


12.9 


14.8 


16.6 


17.9 


17.7 


17.2 


16.9 


16.8 


1936 


13 3 


13.5 


14,4 


14.7 


13.4 


12.8 


9.3 


10.1 


11.2 


13. 


13.6 


14.3 


1936 


11.2 


13.6 


15.7 


17.9 


20.6 


22.4 


24.2 


24.6 


26.7 


26.9 


28.1 


31.4 


1937 


31.0 


37.1 


40.6 


45.0 


47.1 


61.2 


50.3 


62.6 


64.8 


66.8 


61.2 


63.6 




37.6 


36.9 


32.6 


26.6 


22.3 


19.6 


15.5 


13.1 


11.1 


111. 1 













EMPLOYMENT 



1023 


148.2 


153.4 


161.6 


165.8 


160.7 


166.7 


171.6 


171.9 


162.1 


160.6 


147.2 


133.9 


1924 


98.7 


78.8 


71.1 


69.4 


74.1 


81.0 


78.9 


69.9 


66.7 


70.2 


76.8 


81.7 


1926 


70,9 


68,0 


69.8 


69.6 


63.4 


64.4 


65.3 


61.3 


59.6 


60.4 


66.3 


71.3 


1926 


81.8 


85.6 


86.8 


84.4 


86.4 


89.8 


88.2 


88.9 


83.7 


83.2 


83.6 


92.0 


1027.. 


77.1 


77.4 


75.6 


69.9 


67.4 


67.7 


69.1 


71.9 


68. 2 


68.2 


60.6 


47.6 


1028 :... 


46.6 
41.6 


48.6 
42.4 


48.9 

48.1 


48.2 
57. 3 


47.0 
63.4 


48.2 
62.2 


45.7 
66.2 


44.8 
64.4 


42.7 
60.2 


42.0 
60.3 


40.9 
67.7 


41.4 


1029 


57.7 


1930: - 


56.5 


67.4 


58.5 


60.3 


60.4 


61.3 


56.0 


50.1 


47.3 


42.7 


39.3 


37.7 


1931 


30.3 


31.2 


33.8 


32.4 


29.8 


28.9 


28.4 


26.6 


25.1 


23.4 


22.6 


23.1 


1032 


22 2 


22.3 


21.7 


22. 3 


20. H 


18.3 


16.6 


15.6 


13.9 


12.9 


13.1 


12.7 


1033 


11.2 


10.1 


8,5 


7.9 


7.7 


8.3 


y.6 


13.9 


14.9 


18.8 


18.4 


16.5 


1034 


15.6 


15.0 


17.8 


19.6 


22.7 


25.2 


27.5 


29.8 


28.9 


28.9 


28.3 


27.1 


10.36 


21.7 


21.7 


22.8 


22.6 


20.4 


19.6 


14.8 


16.8 


16.6 


18.2 


20.1 


19.7 


1936 


17,9 


19,5 


21,8 


23. 8 


26.7 


28.9 


30. 6 


29.7 


30.9 


32.4 


33.3 


36.0 


1937 


36.8 


41.4 


44.5 


47.1 


48.3 


48.8 


61.3 


61.9 


62.9 


62.6 


60.6 


48.8 


1938 ., 


42.9 


39.4 


36.9 


30.8 


27.1 


26.1 


20.2 


18.0 


16.1 


116.1 













« Preliminary. 

Source: U. S. Bureau of Labor Statistics. 



Exhibit No. 38 

[Chart based on following statistical data appears In text on p. 52j 

Employment and pay rolls, lumber sawmills {192S-25 average=* 100) 

PAY ROLLS 



Year 


Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


Aug. 


Sept. 


Oct. 


Nov. 


Dec. 


1923 


85.8 


88 6 


93.2 


98.5 


105.1 


109.8 


109.0 


108.3 


108.6 


108.8 


108.8 


106.9 


1924 


95.3 

h88.6 


101.6 
95.3 


102.6 
97.3 


104.0 
98.1 


104.6 
100.5 


103.2 
104.0 


95.8 
99.7 


95.0 
97.6 


98.0 
101.6 


98.2 
101.4 


96.1 
98.6 


96.6 


1926 


97.3 


1926 


87.8 


92. 6 


93. 


96, 


99.3 


101.9 


97.4 


100.2 


100. 1 


100.3 


97.6 


93.3 


1037 


84.1 


85.9 


87.5 


86,5 


91.9 


92,6 


89.0 


91.1 


92.6 


92.3 


90.0 


84.9 


1028 


77.3 


79,8 


84,1 


86,7 


89,6 


90.1 


87.9 


89.8 


91.3 


92,2 


90.6 


87.1 


1020 


79 9 


82,5 


84.7 


90.1 


04 6 


94,1 


95,6 


95.5 


97. 2 


95, 6 


91.2 


87.8 


1030 


76.6 


74.3 


79.3 


79.7 


79.1 


76.6 


67.2 


01.9 


60. 3 


58.3 


62.3 


46.0 


1031 


38.6 


38.1 


38,3 


36.8 


38.3 


38.0 


34.7 


33.0 


32.1 


28.9 


25.4 


20.7 


1033 


17.8 


17.7 


17.8 


18,2 


18,6 


18.5 


17.8 


17.9 


18.8 


20.0 


19.6 


18.3 


1033 


17.4 


17,2 


17.1 


18,1 


19,8 


23.1 


25, 8 


29. 


32. 2 


32. 4 


31.0 


29.4 


1034 


26.9 
31 
41.7 


28.6 
34.4 
40.8 


31.2 

35.8 
46.3 


33.8 
38.4 
49,0 


36.6 
33.3 
51,9 


34.8 
34.2 

,52,5 


32.1 
38.2 
49,8 


34.6 
45.9 
52.8 


34.6 
47.9 
53.8 


35.6 
4.8,1 
54,7 


33.9 
43.8 
49.2 


32.0 


1036 . - 


42.0 


1036 -. 


47.9 


1037 


43.6 


47.1 


66. 3 


61.3 


62 3 


67.8 


62.7 


66.9 


62.6 


58,9 


48.2 


40.4 


1038 


37.6 


39.3 


44.6 


44.4 


45.4 


45.4 


41.6 


50.2 


50.7 


'50.4 













CONCENTRATION OF ECONOMIC POWER 



219 



Emphymeni and pay rolls, lumher sawmills {1923-25 auerage = 100) — Continued 

EMPLOYMENT 



Year 


Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


Aug. 


Sept. 


Oct. 


Nov. 


Deo. 


1923 -.. 


96.4 


98.9 


99.7 


102.0 


104.3 


107.3 


108.1 


107.3 


107.4 


106.0 


104.6 


101.6 


1924 


98.() 


100.0 


99.6 


101.1 


102.0 


99 6 


98.2 


98.0 


98.2 


98.6 


97.1 


96.4 


1825 


94.7 


96.2 


95.2 


97.9 


98.8 


100. 6 


99.3 


98.7 


99.8 


98.8 


96.8 


94.8 


1926 


92.3 

86.8 


92.0 

85.5 


92.4 
85.3 


96.6 
85.7 


98.3 
88.0 


99.3 

88.3 


98.7 
88.0 


99.1 
88.6 


97.0 
88.7 


95.4 
87.2 


93.7 
86.3 


91.8 


1927 


81.4 


1928 


78.8 


78.8 


81.2 


83.4 


84.4 


86.3 


85.1 


87.2 


87.8 


87.6 


87.2 


84.9 


1929 


82. 3 


82.5 


83.9 


87.3 


89.5 


91.0 


91.2 


92.9 


91.4 


89.0 


87.2 


83.7 


1930 


77.8 


75. 


75.7 


75.2 


74.6 


72.1 


67.8 


64.5 


61.1 


69.7 


60.0 


61.8 


1931 


46.6 


45.4 


43.9 


44.3 


44.3 


43.8 


41.4 


40.3 


38. 9 


37.6 


35.6 


31.4 


1932 


30. 2 


29.8 


29.7 


30.8 


31.1 


31.7 


31.4 


31.7 


32. 7 


34.0 


33 8 


33.0 


1933 


31.8 


31.3 


31.2 


32.5 


34.4 


38.7 


42. 2 


45.1 


47.3 


48.0 


46.8 


46.6 


1934 


42.2 


43.7 


45.9 


48.5 


51.2 


60.2 


49.3 


60.1 


49.7 


50.6 


49.1 


47.9 


1935 


47.0 


50. 


51.3 


63.3 


62.6 


48.3 


5;{.l 


67.5 


68.1 


68.4 


66.4 


64.7 


1936 


53.7 


53.9 


56.4 


58.5 


60.4 


60.7 


61.2 


61.6 


62.6 


62.4 


59.3 


68.1 


1937 . . . 


56.0 
47.9 


67.3 
48.3 


62.2 
61.0 


63.8 
61.0 


65.4 
51.1 


66.9 
50.1 


67.7 
49.8 


67.5 
62.4 


66.0 
53.6 


63.6 
'63.6 


57.4 


61.0 


1938 











I Preliminary. 

Pource: U. S. Bureau of Labor Statistics. 



Exhibit No. 39 
[Chart based on following statistical data appears In text on p. 6^ 

Emjdoyment and pay rolls, cement 

(1923-26 average=100) 
PAY ROLLS 



Year 


Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


Aug. 


Sept. 


Oct. 


Nov. 


Doc. 


1923. 

1924 

1925 

1926 

1927 


81.9 
S4.5 
85.6 
86.2 
86.8 
89.6 
81.6 
72.0 
50.5 
32.7 
19.7 
23.9 
27.8 
28.6 
49.3 
43.9 


83.7 
98.6 
90.9 
87.9 

85^2 
84.1 
74.8 
67.1 
33.0 
19.7 
28.3 
28.4 
29.0 
52.0 
44.2 


87.2 
101.1 
95.5 
91.3 
95.3 
87.9 
88.1 
82.0 
60.2 
32.2 
20.3 
30.3 
31.6 
38.8 
61.8 
49.7 


89.1 
104.3 
100.0 
95.1 
102.6 
95.9 
92.9 
91.1 
65.3 
31.8 
22.5 
38.9 
39.1 
46.8 
67.7 
68.0 


92.9 
104.1 
104.2 
102.7 
109.9 
100.9 
96.9 
95.8 
69.2 
32.1 
25.6 
45.3 
45.2 
53.8 
70.7 
66.7 


95.3 
109.0 
107.2 
108.7 
108.6 
102.1 

99.9 
101.9 

30^9 
29.8 
60.3 
49.3 
65.6 
74.2 
65.1 


97.7 
103.6 
106.9 
105.1 
106.3 
104.7 
97.5 
90.1 
63.6 
28.3 
32.3 
49.3 
46.6 
57.3 
71.7 
66.0 


100.8 
106.1 
110.7 
113.1 
108.2 
106.0 
100.7 
90.6 
69.6 
27.8 
36.6 
44.7 
44.0 
59.6 
76.2 
66.4 


102.4 
105.9 
109.8 
108.8 
106.9 
101.7 
100.6 
87.3 
54.1 
29.2 
30.3 
42.9 
43.3 
60.3 
72.0 
63.4 


102.8 
104.8 
108.7 
109.0 
105.7 
102.0 
96.8 
83.7 
60.8 
30.1 
29.2 
41.1 
43.0 
61.3 
71.4 
66.6 


101.7 
102.4 
108.7 
105.1 
100.8 
95.3 
90.9 
69.7 
45.6 
28.1 
27.6 
37.9 
40.7 
62.4 
60.6 


99.3 
99.0 
102.0 
98.0 
93 4 


3928 

1929 

1930 

1931 


91.1 
86.3 
62.0 
38.0 


1932 


21.8 


1933 

1934 


23.0 


1985 

1936 


38.0 
68 1 


1937 

1938 


67.4 



EMPLOYMENT 



1924. 
1926- 
1926. 
1927. 
1028. 
1929. 
1030. 
1931. 
1032. 
1033. 
1034.. 
1036.. 
1936. 
1037.. 



84.9 
09.6 
94.6 
95.9 
01.6 
86.0 
86.6 
76.0 
63.1 
48.6 
34.0 
39.0 
43.7 
43.1 
61.7 
64.3 



86.8 


90.4 


96.1 


98.2 


92.7 


96.6 


94.9 


94.4 




04.9 


84.3 


86.9 


84.9 


87,3 


75.9 


82.0 


63.7 


67.1 


47.7 


47.6 


33.7 


34.1 


46.1 


47.0 


44.0 


48.0 


43.1 


60.4 


63.0 


68.7 


63.3 


67.7 



92.4 
100.6 
102.6 
98.2 
98.6 
90.2 
8ff.6 
88.6 
71.4 
48.0 
40.2 
63.9 
66.1 
69.4 
72.4 
64.6 



95.2 
103.0 
105.3 
103.3 
101. 1 
94.1 
92.4 
93.2 
73.8 
45.8 
42.1 
64.0 
63.6 
66.3 
74.1 
66.7 



96.7 
102.6 
107.8 
106.6 
103.3 
96.9 
94.7 
95.4 
71.6 
46.0 
48.2 
65.8 
66.9 
66.8 
76.3 
68.1 



99.5 
103.4 
108.9 
107.8 
104.2 
97.8 
96.6 
91.7 
71.8 
46.2 
61.9 
65.2 
64.3 
68.2 
75.3 
70.3 



98.7 
104.1 
109.8 
108.3 
104.2 
99.6 
95.7 
91.8 
68.1 
42.6 
64.9 
61.8 
60.4 
69.4 
76.6 
69.9 



99.2 
103.2 
110.3 
107.6 
103.6 
97.1 
94.4 
88.3 
64.6 
46.8 
49.8 
60.0 
68.4 
7a 4 
76.6 
68.0 



98.5 
101.8 
100.0 
106.3 
100.7 
96.8 
91.4 
84.1 
63.0 
47.8 
43.3 
67.6 
60.4 
70.9 
74.8 
<60.0 



90.6 
102.6 
106.7 
103.0 
97.1 
93.3 
88.7 
77.8 
68.0 
46.0 
43.3 
66.6 
66.0 
69.4 
71.8 



08.0 
00.4 
104.4 
08.4 
BO.O 
80.0 
83.0 
70. T 
63.8 
87.3 
38.7 
48.6 
61.0 
07.0 
08.1 



» Preliminary. 

Bource: U. 8. Bureau of Labor Statistics. 



220 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 40 

(Chart based on following statistical data appears in text on p. 53] 
Employment and pay rolls, cotton goods 

[1923-25 average =100] 
PAY ROLLS 



1923.... 
1»24.... 
1925.... 
192G ... 
1927.... 
1928.... 
1929...- 
1930... . 
1931 ... 
1932.... 
1933.... 
1934 ... 
1935.... 
1936.... 
1937.... 
1938.... 



Jan. Feb. Mar. Apr. May June July 



107.5 
109. 8 
102.0 
104.4 
103.7 
96.6 
93.7 
81.3 
61.6 
51.6 
43.7 
71.8 
73.5 
69.9 
91.7 
64.3 



107.7 
107.9 
103.3 
105. fl 
107.6 
94.7 
90. 1 
80.3 
62.1 
.54.6 
43.4 
77.4 
74.4 
70 
92.0 
65.1 



110.0 
100.4 
104 3 
106.8 
109. 1 
92.3 
95.9 
78.5 
65.8 
53.0 
39.7 
81.4 
72.0 
69.3 
92.9 
66.5 



113. 4 

104! 1 
105.0 
107.5 
88. 2 
94.6 
77.9 

44^8 
41.1 
82.2 
65.8 
68.6- 
98.6 
62.1 



121.3 

89.4 
102 1 

97.1 
106.9 

84.4 

68' 5 
37.7 
47 5 
75.7 
62.7 
68.9 
97.5 
60.3 



115.9 
S3.0 
96.5 
94.2 

106.6 
82.5 
91.0 
69.6 
64.1 
32.2 
59.2 
61.8 
57.7 
69.4 
92.6 
58.5 



106.1 
73.5 
89.5 
83.8 

103. 5 
81.7 
86.8 
61.3 
61.9 
30.0 

62^3 
56.3 
71.8 
88.6 
63.7 



Aug. Sept. Oct. Nov. Dec, 



107.8 
78.0 
90.4 
86.5 
104.2 
79.5. 
84.3 
58.2 
60.4 
35.0 
80.2 
59.3 
56.8 
75.6 
88.8 
68.4 



111.7 
82.7 
84.2 
94.7 

105.7 
83.1 
86.8 
61.1 
58.6 
46.0 
78.0 
35.3 
62.4 
74.7 
84.6 
71.1 



103.5 
89.7 
97.6 
99.2 

107.0 
89.6 
89.7 
63.1 
56.4 
49.1 
78.6 
70.4 
67.2 
79.4 
77.9 

•72.6 



103.6 
88.6 
100.6 
100.4 
104.1 
92.6 
85.3 
63.1 
52.5 
47.1 
73.7 
67.7 
68.1 
8C. 6 
70.2 



112.8 
101.5 
104. 9 
104.7 
102.8 
95.9 
83.5 
65.2 
53.2 
45.3 
69.7 
72.8 
72.3 
90.0 
67.8 



EMPLOYMENT 



1923 


111.9 


112.4 


113.7 


113.4 


113.3 


111.3 


102. 5 


100.2 


101.4 


98.5 


100.1 


102.2 


1924 -. 


100.3 


100.6 


97.7 


94.2 


91.5 


89.7 


82.0 


84.3 


86.8 


91.6 


92.2 


98.9 




101. 1 

105.7 


102.5 
106.1 


102.7 
107.0 


103. 5 
10.5.9 


102.4 
103.0 


101.2 
100.3 


94.2 
93.fi 


95.1 
93.3 


94.5 
99.1 


1C1.9 
102.0 


104.5 
102.8 


105.8 


1926 


104.4 


1927 


105. 


106. 5 


106.9 


106.4 


106. 1 


106.2 


105.6 


104.7 


105.9 


106.2 


106.1 


103.7 


192S _ 


102.4 


101.4 


99.7 


97.3 


92.7 


92.0 


90.1 


88.9 


90.8 


94.4 


97.4 


98.7 


1929 


99. 


99,6 


99,0 


97.2 


97.5 


97.4 


94.1 


92.1 


94.7 


9.5.6 


94,4 


92.8 


1930 


91.1 


89.2 


88.2 


87.4 


84.2 


81.5 


76.0 


72.9 


74.3 


74.2 


7,5.1 


74.4 


1931 - 


72. 8 


72.8 


70.2 


76.6 


7K.4 


76.2 


75.3 


74.0 


74.3 


72.9 


72.2 


72.4 


1932 


71.4 
72.3 


73.9 
71.7 


73.4 
69 3 


67.6 
70.7 


61.9 
76.3 


55. 7 
88,4 


53.7 
97.8 


59. 3 
99.9 


69.7 
97.9 


73.4 
99.1 


73.0 
95. 3 


72.7 


1933..-.. - 


92.4 


1934 


03. 1 


97 7 


100.8 


100.8 


98.8 


91.6 


89.6 


85.8 


48.1 


87,9 


87.8 


89.5 


1935 


90.1 


90.3 


89.1 


85.6 


82.0 


79.3 


76.6 


75.9 


79.3 


82.4 


84.6 


86.3 


1936 


85 8 


8.5.7 
99.0 


.S5. 8 
100,3 


84.7 
100.9 


84.7 
100.8 


85.0 
98.3 


87.6 
97.3 


90. 3 
96.2 


91.6 
9.3.8 


93.2 

89.5 


94.9 
86.9 


96 8 


1937 - 


98.0 


84.8 


1938 


82. 6 


81.8 


K2.4 


„., 


77.1 


76.0 


78.2 


81.3 


83.2 


'83.7 













1 Preliminary. 

Source: U. S. Buri-au of 



Exhibit No. 41 

(Chart based on following statistical data appears- in text on p. 53] 

Employment and pay rolls, cigars and cigarettes 

[1923-25 average =-100] 

PAY ROLLS 



Year 1 Jan. 


Feb. 


Mar. 


Xvr. 


May 


June 


July 


Aug. 


Sept. 


Oct. 


Nov. 
108.8 


Dec. 


i 
1923...- J109.0 


104.7 


109,4 


103. 7 


101,8 


104.8 


100.0 


90.1 


101.2 


108,4 


Ill 9 


1924 






103.2 


101.2 


100.8 


92,9 


96,1 


99.6 


97.1 


96.3 


100.2 


90,4 


105. 6 


106,9 


1925 






99.1 


91.4 




77.7 


96 7 


95.8 


91 3 


9,5,4 


95,4 


103, 5 


106.3 


106.7 


192(i 






91.2 


87.4 


92.9 


86.6 


86. 4 


92.6 




88.4 


94.1 


98,4 


98.8 


96.2 


1927 






81.1 
84. 4 


84.4 
84.0 


87.0 

85, 7 


84.8 
79 2 


91.2 
S3 1 


94.6 


93.8 
83,9 


87.3 
87.4 


100.2 
91,5 


100,3 
93.6 


100.2 
92.8 


96.2 


1928 






92.0 


1929 






71.5 


77.8 


80.3 


S2.0 


82.3 


84.0 


83.5 


86.1 


88.9 


89.3 


89. 5 


82,2 


1930 






69.7 


72.7 


74.0 


70,6 


7,5.8 


78. 


75.6 


70.6 


73. 5 


72.0 


70.7 


71.4 


1931 -. 






57.2 


.58,0 


61.2 


.59, 5 


61.6 


62.0 


61.2 


59.8 


56.5 


,58.4 


58.7 


52,6 


1932 . 






40.5 


47.4 


46. U 


44.1 


43.5 


47,2 


46. 9 


44. 9 


46.3 


48.0 


48.2 


46,5 


1933..^ 






34.0 


36.7 


33. 2 


33.0 


42.1 


43.9 


44.2 


44.5 


48.6 


52. 1 


51. 5 


47,5 


1934 






39.3 


45, 


46 4 


47.8 


4H.3 


49.8 


49.6 


,52,3 


53. 3 


52,7 


52. 9 


53,8 


1935 






43.8 


43 4 


47.5 


46,7 


47.7 


,51.1 


52.2 


51.3 


54.5 


56,1 


54.4 


54.8 


1936 






44.4 

48.9 


47.1 

SS 7 


48.8 
55. 3 


46.0 
55. 2 


51.1 
56.6 


53.6 
58.9 


54.5 
59.4 


57.5 
61.2 


56.6 
59.7 


68,5 
61.4 


58.5 
61,2 


58.9 


^m^ 






58.7 


J938 




45.4 


50.3 


53.0 


51.3 


55.4 


58.0 


55.6 


58.1 


59.6 


60.4 

















CONCENTRATION OF ECONOMIC POWER 

Employment and pay rolls, cigars and cigarettes — Continued 

EMPLOYMENT 



221 



Year 


Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


Aug. 


Sept. 


Oct. 


Nov. 


Dec. 


1923 - 


109.0 


108.3 


110.4 


106.6 


ia5.8 


105. 8 


102.7 


99.7 


lOfi.2 


106.2 


107.7 


107.1 


1924 


101.3 


101.5 


100.0 


96.1 


96.1 


96.5 


97.6 


96.9 


99.2 


91.1 


101.7 


100.0 


1925.. 


9fi 8 


96 


97.7 


89.4 


95.8 


94.3 


93.9 


92.6 


95.4 


98.5 


98.4 


98.8 


1926 


87.6 


91 7 


90.8 


87,4 


87.9 


91.7 


88.4 


85.8 


91.3 


94.1 


94.3 


94.3 


1927 


84.9 


91.4 
92.3 


91.8 
93.4 


91.0 
90.7 


92.9 
92.1 


95.8 
92.5 


96.6 
87.1 


89.4 
93.7 


100.8 
95.5 


102.9 
97.8 


102.7 
97. ff 


98.1 


1928.. 


92. g 


1929 


79 4 


87,6 


87.4 


86,8 


8,5.6 


86.2 


85.4 


87.5 


87.4 


88. 7 


.89.4 


80.6 


1930 


75 3 


80 3 


81.0 


80,1 


81,4 


81.3 


80. 5 


76.4 


79.9 


80.2 


79.4 


77.3 


1931 


67.3 


75.2 


74.8 


73 4 


73 4 


72,8 


72. 5 


-72. 1 


72.7 


73. 1 


V2.6 


65.3 


1932 


62.5 


65. 5 


64.8 


63.2 


62.2 


64.0 


6:^.6 


63.8 


65,9 




69.1 


66.6 


1933 


57 1 


61,0 


55. 3 


54. 5 


62.4 


64.5 


64.0 


65.7 


6,5.2 


68.4 


70.4 


66.2 


1934 


56,8 


65,8 






66.1 


68.2 


66.8 


71.8 


71.5 


72.4 


71.0 


68.9 


1935.... .- 


62 3 


63 6 


64 ft 


64 


64,1 


65.8 


65.7 


66.3 


67. 5 


68.8 


68.4 


66.6 


1936 


58.4 


63.0 


63.6 


63.0 


64.8 


65.1 


65. 5 


68.4 


69.2 


70.0 


71.6 


68.6 


1937 


61,1 


65,0 


65.8 


65.0 


64.7 


64.9 


65.8 


67.0 


67.4 


67.8 


68.2 


65.6 




54.8 


63.0 


64.0 


.63.6 


64.2 


65.3 


61.7 


64.9 


66:8 


167.4 













1 Preliminary. 

Source: U. S. Bureau of Labor Statistics. 



Exhibit No. 42 

[Chart based on following statistical data appears In text on p. 54] 

Employment and pay rolls, woolen and worsted goods 

(1923-25 average = 100) 

PAY ROLLS 



Year 


Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


Aug. 


Sept. 


Oct. 


Nov. 


Dec. 


1923 


101.7 


103.6 


lO.S. 3 


107.0 


118.9 


117.3 


111.9 


106.4 


108.2 


110.6 


108.6 


110.0 


1924 


104.3 


106.8 


102.8 


94.3 


91.6 


86.0 


80.9 


87.2 


94.8 


104.3 


106.3 


111.4 


1925 


107.6 


104.6 


99.5 


9.5.4 


92.8 


88. 9 


88.7 


86.5 


84. 3 


89.4 


91.2 


90.6 


1926 


90.0 


82.8 


80.9 


78.7 


78.8 


79.6 


79.2 


79.6 


82.1 


92.8 


90.7 


92.7 


1927 


90 6 


91,3 


86 1 


82. 5 


81.7 


82.7 


78.3 


82.9 


8;i.9 


8,5.9 


85. 


86.0 


1928 


aro 


82.5 


76.9- 


73.7 


78.2 


79.3 


74.2 


76.2 


74.7 


83.0 


Ki.5 


86.8 


1929 


82.4 


83.1 


81.0 


82.1 


8:i.o 


80.7 


77.3 


80.5 


81.4 


83.6 


74.4 


71.^ 


1930 


69,7 


66,6 


(iO.4 


,55. 6 


6;{.fi 


64 


60.4 


60.7 


61.2- 


56.5 


.53. 2 


53.7 


1931 


51.9 


60.4 


61.7 


£5.4 


61.3 


6:^.1 


66.3 


68.4 


67.4 


48.8 


4«.8 


46.1 


1932 


47.3 


52.6. 


43.9 


30. 2 


27.3 


25.5 


30.2 


40. 1< 


45.0 


4.5.2 


38.9 


40.3 


1933 


38.6 


44.4 


2.5.8 


28.8 


39.7 


.56.3 


64.9 




64.9 


61.5 


61.4 


61.0 


1934. 


£2.2 


59.2 


5o. 1 


51.3 


60.3 


45.9 


47.0 


45.2 


23. « 


44.6 


60.8 


62.8 


1935 


(W.8 


70.6 


68.6 


63.2 


67.7 


73.0 


70.9 


7.3.1 


72.1 


7,5.1 


76.4 


79.9 


1936 


74.3 


7.3.1 


67.8 


6,3.7 


6.3.6 


64.1 


65. 3 


67.4 


57.8 


63.0 


68.9 


87.9 


1937... 


86.7 
51.0 


85.7 
52.5 


82.4 
41.1 


86.9 
35.4 


84.9 
38.9 


81.9 
47.4 


74.9 
65.5 


71.5 
62.1 


60.1 
67.5 


55.1 
•58.2 


44.6 


51.7 


1938 











EMPLOYMENT 



1923 


107.8 
10,5. 5 


109.4 
10.5. 1 


110.6 
104.0 


111.8 
98.3 


112.0 
9,5.4 


110.9 
91.7 


109.7 
87.0 


108.7 
88.0 


106.9 
93.7 


107.3 
100.2 


108.8 
102.0 


107.7 


1924 


103. t 


192.5 


100.8 


99.4 


96.8 


95. 2 


91.9 


90.8 


89.3 




89.3 


90.2 


90.8 


89.8 


1926 




82.8 


81.0 


80.4 


80.1 


79.9 


79.9 


80.3 


84.3 


89.4 


91.1 


90.7 


1927 


90.6 


91.0 


87.9 


8.5.8 


84.1 


84.8 


81.3 


85.1 


86.2 


87.4 


88. 4 


88.1 


1928 : 


86. 5 


8.5.6 


82.6 


80.8 


81.7 


83. 


79.5 


81.3 


79.4 


Ki.\) 


86.8 


86.4 


1929 


85 2 


84,5 


KVS 


,S3, 6 


84.0 


82. 7 


SO, 7 


83,1 


S3, 6 


84.3 


79.9 


76.1 


1930 


75.0 


72.5 


67.5 


63.3 


67.3 


69.0 


67.0 




68.0 


64.6 


62.8 


61.2 


1931. .• 


60.6 


66.2 


68.1 


64.3 


69.2 


72.4 


75. 5 


76.9 


72.4 


61.2 


60.0 


58.7 


1932 


,59.6 


6,5.1 


.58.1 


46.5 


43. 2 


41.5 


48.2 


60.1 


(•4.9 


65. 3 


60.0 


59.9 


193.3 


59.4 


65.3 


48.2 


.50.2 


61.8 


77.5 


88.7 


91.7 


86.5 


Ki.7 


73.6 


• 70.9 


1934.. 


72.4 


78.8 


75.7 


69.2 


69.8 


64.1 


65.5 


64.1 


34.8 


64.3 


70.7 


80.6 


1935 


92:8 


88.6 
92.4 


87.3 
88.3 


,82.0 
8.3.3 


86.4 

82.2 


91.7 
82.6 


89.7 
8.3.5 


92.4 

8,5.4 


91.2 
81.5 


93.6 
82.1 


97.8 
87.7 


97 2 


1936 


95.8 


1937 


96.8 


96.6 


94.5 


93.1 


92.0 


90.0 


84.4 


81.9 


73.7 


71.6 


62.6 


63.9 


1938 


61.9 


62.6 


54.4 


48.8 


54.1 


61.0 


68.4 


75.1 


72.7 


■72.0 













« Preliminary. 

Source: U. Si Bureau o( Labor Statistics. 



222 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 43 
[Chart based on following statistical data appears In text on p. M] 



Employment and average weekly hours in manufacturing, mining, and steam 

railroads 











(1914 


= 100] 








Year 


Average 
number 
of wage 
earners 


Average 
weekly 
hourB 


Total 
man- 
hours 


Year 


Average 
number 
of wage 
earners 


Average 
weekly 
hours 


Total 
man- 
houn 




100.0 
126.4 
123.6 
114.9 
117.5 
119.7 
117.1 
116.4 
120.9 


100,0 


100.0 
117.6 
112.2 
100.1 
104.0 
107.8 
104.7 
102.6 
107.5 


1930 


106.3 
90.1 
76.9 
81.5 
93.6 
98.4 
105.4 
113.2 


84.7 
81.2 
76.7 
73.3 
68.6 
71.0 
76.3 
74.3 


90.0 


1919 


92 
90 
86 
88 
90 
89 
88 


9 
6 
9 

4 

4 
8 

8 


1931.... 


73. t 


1923 


1932 


67.8 




1533 - 


69.8 




1934 


64.2 


1926 


1935 


69.9 


1927 


1936 


79.5 




1937 


84.1 


1929 















Source: Compiled by the U. 8. Bureau of Labor Statistics. 



Exhibit No. 44 

[Chart based on following statistical data appears in text on p. 67] 

All manufacturing industries 





Average 
weekly 
earnings 
(in dol- 
lars) 


Average 
hours 
worked 
per week 
(in hours) 


Average 
hourly 
earnings 
(in cents) 




Aerage 
weekly 

rioT 

(lars) 


Average 
hours 
worked 
per week 
(in hours) 


Averag* 

hourly 
earnings 
(in cents) 


1932 


19.86 
19.97 
19.77 
18.85 
18.65 
17.89 
17.19 
16.79 
16.82 
17.36 
17.00 
16.94 

16.62 
16.48 
16.70 
16.23 

17.17 
17.89 
17.87 
18.68 
18.38 
18.69 
17.71 
17.97 

18.01 
19.02 
19.48 
19.96 
19.81 
19.48 


38.4 
39.2 
38.6 
37.4 
37.4 
36.5 
36.6 
36.6 
38.4 
39.8 

38! 2 

37.6 
38.1 
36.6 
38.0 
40.8 
42.6 
42.6 
38.5 
36.2 
35.8 
34.4 
34.2 

33.7 
36.8 
36.3 
36.2 
35.4 
34.9 


50.6 
60.1 
48.3 
48.1 
48.1 
46.9 
46.6 
45.3 
43.8 
43.1 
43.4 
43.2 

42.6 
42.3 
43.4 
42.7 
42.2 
41.8 
41.9 
48.2 
50.9 
52.1 
51.9 
62.5 

63.3 
63.1 
53.1 
54.1 
65.1 
55.0 


July 


18.60 
18.89 
18.55 
18.95 
18.87 
19.73 

19.99 
20.93 
21.09 
21.17 
20.78 
20.64 
20.12 
20.86 
21.14 
21.64 
21.80 
22.33 

21.59 
21.44 
22.25 
22.66 
22.95 
22 92 
22.39 
22.67 
22.20 
23.46 
3».94 
24.87 


33.4 
34.0 
33.3 
34.3 
34.1 
35.2 

35.2 
36.4 
36.6 
36.4 
35.8 
35.4 
35.2 
36.6 
37.4 
38.2 
37.8 

37.3 
37.4 

39.2 
39.2 

39^4 
38. 7 
40.6 
40.6 
41.1 


56.6 


February 

March 


August 


55.6 


September 

October 


55.9 


April 


65.3 


May 




55.4 




December 


56 


July 


1936 








September. 




October 


56.4 






66.7 


December 


March 


56.8 




April 


57.1 


1933 


May 


57.1 






57.6 




July 


56. 9 


February 


August 


50.8 


March 




56.3 


April 




56.4 


May .. . . 


November . . 


56.7 






57.2 


July 


1936 
January 




August 




September . . 




October 


67.3 


TTovember 


February 


67.1 




March 


67.2 




April ■ 


67.3 


1934 


Alay 


67.4 




June 


57.6 




July 


57.2 






67.1 


March 




66.9 






57.4 


May 




57 9 


June 


December 


69.4 



CONCENTRATION OF ECONOMIC POWER 
All manufacturing industries — Continued 



223 





Average 
weekly 
earnings 
(in dol- 
lars) 


Average 
hours 
worked 
per week 
(in hours) 


Average 
hourly 
earnings 
(in cents) 




Average 
weekly 
earnings 
(in dol- 
lars) 


Average 
hours 
worked 
per week 
(in hours) 


Averag* 
hourly 
earnings 
(in centt) 


1937 


24.02 
24.73 
25.54 
26.30 
26.39 
26.00 
25.31 
25.84 
24.9'? 

:..92 
^.'2.93 


39.6 
40.4 
41.0 
40.4 
39.8 

3?; 9 

37.4 
37.6 
35.4 
34.4 


59.6 
60.2 
61.3 
63.8 
64.9 
65.3 
65,7 
05. 6 
.35. 3 
Go. 6 
66.7 
66.6 


1938 


21.89 
22.30 
22.46 
22.28 
22.17 
22.30 
2M7 
22.90 
23. 32 


33.2 
34.3 
34.5 
34.2 
34.4 
3:. 4 
34.9 
36." 


66.1 


February 


February. 


65.6 


March 


March 


65.8 


April 


April 


65.2 


May 


May ^ 


65.0 






64.8 


July 


Julv 


63.0 




■ '.i:r,ust 


■r,2 S 




53. a 


October 






November 














^ 





Source: Compile:' by the U.S. Bureau of Labor Statistics. 



Exhibit No. 45 
[Chart based on foUow'ng s lijtical data appears In text on p. 581 
Output per man-hour 
[1923-25 average =1001 



Year 


Manufactur- 
ing 


Bituminous- 
coal mining 


Anthracite 
mining 


Steam rail- 
roads 


1909 


61.9 
71.6 
93.8 
120.3 
124.7 
140.4 
137.3 


67.1 
74.8 
99.1 
107.1 
110.3 
119. 4 
122.0 


85.1 
90.0 
103.7 
99.9 
119.0 
149.1 
1.58.0 




1914 


75.8 


1923 - 


90. > 


1929 : 


113.8 


1932 . 


111.8 


1936 - 


140.4 


1937 


143.1 







Source: Compiled by the U. S. Bureau of Labor Statistics. 



Exhibit No. 46 

[Chart based on following statistical data apptars In teit on p. fiO] 

Real wages, in manufacluring, mining and sieam. railroads 



Year 


Weekly 
cash 
wages 


Weekly 
real 
wages 


Year 


Weekly 
cash 
wages 


Weekly 
real 
wages 


1914 


.$11.60 
22.85 
24.53 
24. 51 
24.89 
25.37 
25.24 
25.47 
25.65 


$11.60 
13.15 
14.42 
14.38 
14.23 
14.39 
14.60 
14.89 
15.00 


1930 


$24. 02 
21.72 
17.86 
17.30 
18.00 
20.32 
21.87 
23.83 


$14. 41 


1919 


1931 


14 27 


1923 


1932 


13.08 


1924 




13.29 


1925 


1934 


13.00 


1926 


1935 


14. 6£ 


1927 


1936 


16.60 


1928 


1937 


i8i4a 


1929- - - 











Source: Compiled by the U. S. Bureau of Labor Statistics. Weekly real wages are computed from ■kreskly 
cash wages by the use of the U. S. Bureau of Labor Statistics index of the cost of living with 1914 = 100. 



Exhibit No. 47 appears in the text on p. 61 



224 CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 48 

[Chart based on following statistical data appears in text on p. 64] 

Estimated number and age of the unemployed, by sex, November 1937 



Age 


Sex 


Number of 
unem- 
ployed 


Age 


Sex 


Number of 
unem- 
ployed 


16-19 


Male.. 

Female 

Male... 

Female 

Male 

Female 

Male 

Female 

Male 

Female 

Male 

Female 


1, 144, 110 
813,643 

1,255,724 
747, 388 
824. 096 
430, 639 
651,420 
324, 429 
618, 529 
319, 564 
628, 885 
275, 131 


45-49 


Male 

Female 

Male 

Female 

Male. 

Female 

Male 

Female . 

Male 

Female 

Male. 

Female 


604, 539 




50-54 


229,715 
564, 781 


2{h29 


55-59 


178, 993 
466, 006 




60-64 


120, 123 
367, 909 


35 39 


65-69 


74, 791 
223, 361 




70-74 


36, 994 
81. 006 






8,263 



Source: Census of Partial Employment, rnomployment and Occupations. November 1937. The data 
Include all totally unemployed and those with emergency employment. The figures differ slightly from 
those published in table 3, vol. IV, of the final report on Total and Partial Unemployment due to revisions. 
They represent the adjustment of the unemployment census figures by the enumerative check. 



Exhibit No. 49 

[Chart based on following statistical data appears in text on p. 67] 

Estimated net total number of households and persons receiving relief, and emergency 
employment on Federal work programs, continental United States 





House- 
holds 


Persons 




House- 
holds 


Persons 


1933 


4, 656, 000 
4, 976, 000 
5,472,000 
5, 361, 000 
5, 287, 000 
4. 868, 000 
4, 570, 000 
4, 396, 000 
3,996,000 

4, 142, 000 

5, 455, 000 
7,101,000 

7, 855, 000 
7,916,000 
7,201,000 
6, 326, 000 
5, 757, 000 
5, 698, 000 
5, 944, 000 
6,165,000 

6, 165, 000 
6, 276, 000 
6. 444, 000 
6, 598, 000 

6, 779, 000 
6, 702, 000 
6, 667, 000 
6, 656, 000 
6, 584, 000 
6, 265. 000 
6, 037. 000 
5, 984, 000 
5, 593 000 
.5,621,000 
5, 533, 000 
5, 863, 000 


18, 283, 000 

19, 565, 000 
21,537,000 
21,113,000 
20. 719, 000 
18.919,000 
17, 365, 000 
16. 992, 000 
15,162,000 
15, 688, 000 
19,973,000 
24, 946. 000 

27, 578, 000 
27, 749, 000 
2.5,613,000 
22, 639, 000 
20, 954, 000 
20,716,000 
21,615,000 
22, 459, 000 

22, 259, 000 
22, 409, 000 
22, 953, 000 
23, 672, 000 

24,211,000 
23, 965, 000 

23, 704, 000 
23, 451, 000 
23, 054, 000 
21,898,000 
21,133,000 

20, 739, 000 
19. 235. 000 
19, 053, 000 
18,686,000 
20.034.000 


1936 


6,051,000 
6, 209. 000 
6, 208, 000 
5.970,000 
5, 7.59, 000 
5, 556, 000 
5. 393, 000 
5. 506, 000 
5, 579, 000 
5, 848, 000 
5,918,000 
5, S76, 000 

5. 905, 000 
5.873,000 

5. 942, o;;o 

5.K45,000 
5, 652, 000 
5, 382, 000 
4. 973, 000 

4, 773, 000 
4. 689, 000 
4, 825, 000 
4, 977, 000 

5, 322, 000 

5, 781, 000 
6,116.000 

6, 463, 000 
6,588,000 
6, 723, 000 
6,711,000 
6,641,000 
6, 745, 000 

16,790,000 
1 6, 993, 000 


20, 594, 000 


February 


F(>bruary 


21, 188.000 


March 


March 


21,147,000 






20, 300, 000 


May 


May . - . - 


19. 278, 000 






18,444.000 


July 


July 


17, 765, 000 


August 

September 

October. 


August 

September 

October 

1 November .. . .. . 


18.144,000 
18. 470, 000 
18, S56, 000 


November 


19, 021, 000 


December 


December 


18 ■■'5 nnn 


1934 
January 


1937 
January . . 


19, 004, 000 


February 


Februarv 


18 634 000 


M^X!::::::::::::::::: 


March... 


IS, 869. 000 


April 




18. 357. 000 


May. 


May 


17,516,000 






16,761.000 


July 


July -. 


15,213,000 






14. 398. 000 


September 


September 


13. 993, 000 


October 


October 


14 159 000 






14, 660, 000 






15,919.000 


1935 
January 


1938 


17 650 000 




February 

March 

April 


18,910.000 


March 

April 


20, 174, 000 
20 719 000 


May 


May 


21 158 000 






21,297,000 


July 


July 


21, 208, 000 


August 




21 581,000 


September 

October 


September 


121,720,000 
1 22, 2.50, 000 


November 






December .. .. 









• Preliminary. 

Source: Works Progress Adalnlstratlon. 



CONCENTRATION OF ECONOMIC POWER 



225 



Exhibit No, 50 

[Chart based on following statistical data appears in text on p. 69) 
Estimated total ' funds used for relief and work programs by major programs 





Total ' 


Public works a 


Work pro- 
grams « 


Direct as- 
sistance • 


1933-.. 


$1,563,000,000 
3,815,000,000 
3,954,000,000 
6, 460, 000, 000 
4, 771, 000, 000 
5,638,000,000 


$464, 000, 000 
1, 196, 000, 000 
1, 054. 000. 000 
1, 914. 000, 000 
1, 647, 000, 000 
1,666,000,000 


$301, 000. 000 
1,064,000,000 
944, 000, 000 
2,678,000.000 
2, 133, 000, 000 
2, 761, 000, 000 


$609, 000, 000 


1934 - 

1935- 

1936 


1, 555, 000, 000 

1,956,000.000 

868. 000, 000 


1937- — . 


991. 000, 000 


1938 > 


1,211,000,000 



1 Includes Federal, State, and local funds. Data are for calendar years. 

> Estimated. 

' Public works: Public Works Administration, non-Federal (value of goods and services in place). Bu- 
reau of Public Roads (funds earned by States). Other Federal agencies— regular (obligations incurred). 
Emergency funds— Public Works Administration fund (value of goods and services in place), Emergency 
Relief Administration funds (voucher payments), Works Progress Administration fund (voucher pay- 
ments). 

* Work programs: Civil Works Administration (obligations incurred), Civilian Conservation Corps 
(obligations incurred), Works Progress Administration (obligations incurred and sponsors' pledges 
liquidated). 

» Direct assistance: Federal Emergency Relief Administration and State and local relief programs (obli- 
gations incurred); rural rehabilitation, loans, and grants (Farm Security Admini.^traticn and Puerto Rico 
Reconstruction Adfiiinistratlon) [voucher payments]; Social Security Board and other categorical assistance 
(obligations incurred). 

Source: Works Progress Administration. 



"Exhibit No. 51 

[Chart based on following statistical data appears in text on p. 70] 

Persons employed by the Federal Government and on work programs 

[Thousands of employees] 

MILITARY 



Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec 



1933 
1934 
1935 
1936 
1937 



1933 


835 

879 

923 

1,068 

1,108 

1,184 


83. 


830 


839 

880 

930 

1,065 

1,113 

1,117 


842 

896 

939 

1,073 

1,119 

1,126 


912 

937 

1,081 

1,123 

1,132 


839 

912 

945 

1,087 

1 151 

1,156 


829 

921 

M3 

1,096 

1,142 

1,187 


831 

925 

1,002 

1,101 

1,129 


845 

929 

1,024 

1, 105 

1,123 


867 

932 

1,039 

1,112 

1,113 


876 


1934 


• 865 
924 
1,050 
1,110 
1.109 


866 

929 

1,053 

1,109 

1,110 


927 


1935 


1,047 


1936.... 


1,112 


1937 


1,109 


1938 













CONSTRUCTED FROM REGULAR FEDERAL FUNDS 



1933. 
1934. 
1935. 
1936. 
1937. 



1,123 
1.228 
1,338 



962 
l.C 
1,223 
1,254 



1,010 



1,267 



1,041 
922 
973 
1,131 
1,246 
1,291 



982 
1,156 
1,279 



1,091 
965 
987 
1,191 
1,301 
1,354 



1,048 
958 
997 
1,235 
1,344 
1,392 



l,01i 



- 986 
971 

1,0141 1,064 
1,263 1,27.5 
],346| 1,330 
1,440. 



1,282 
1,341 



974 
1,114 



1,324 



941 

974 

1,113 

1,265 



226 CONCENTRATION OF ECONOMIC t'OWER 

Persons employed by the Federal Government and on work programs — Continued 
PUBLIC WORKS ADMINISTRATION 





Jan. 


Feb. 


Mar. 


Apr. 


May 


June 


July 


^ug. 


Sept. 


Oct. 


Nov. 


Dec. 


1933 














1,048 
1,601 
1,438 
1,023 
1,643 
1,502 


1,016 
1,601 
1,444 
1,644 
1,534 
1,549 


1,033 
1,546 
1.437 
1,634 
1,503 


1.116 
1,504 
1,431 
1,610 
1,491 


1,223 
1,477 
1,403 
1,585 
1,445 


1,243 


1034 . . 


1,222 
1,291 
1.345 
1,430 
1,435 


1,215 
1,250 
1,301 
1,398 
1,346 


1,204 
1,269 
1, 354 
1,402 
1,361 


1,305 
1,342 
1,441 
1,438 
1,395 


1,455 
1,411 
1,521 
1,485 
1,444 


1,677 
1,442 
1,591 
1,505 
1,481 


1,383 


1035 


1,367 


1936 


1,527 


1937 


1,394 


1938 















CIVILIAN CONSERVATION CORPS 



1933 












1,282 
1,913 
1,825 
1, 993 
1, SX 
1,783 


1,332 
1,881 
1,865 
2.001 
1,864 
1, 792 


1,332 
1,990 
1,924 
2,043 
1,879 
1,861 


1,340 
1,931 
2,024 
2,013 
1,828 


1,35S 
1,840 
1, 961 
1,926 
1,777 


1,618 
1,869 
1,950 
1,985 
1,805 


1,68« 


1934 

1935 


1,543 
1,640 
1,847 
M,801 
1,769 


1,54G 
1,G47 
1,773 
1.802 
1,677 


1,526 
1,642 
1,802 
1.793 
1,685 


1,552 
1,636 
1.791 
1,741 
1,706 


1, 769 
1,778 
1,906 
1,851 
1,745 


1,769 
1,897 


1936.. 


1,913 


1937 


1,741 

















WORK RELIEF 



1933 

1034 


2,567 

1,636 


2,n5 
1,641 


2,980 
1,716 


2,990 


2,966 


2,927 


3,011 


3,051 


2.779 


2,824 


3,071 


1,T63 























EMERGENCY WORK RELIEF 



1934 






2,641 
3,912 
1,812 
1,753 
1,727 


3.131 
3.975 
1,925 
1,859 
1,766 


3,418 
3,847 
2,013 
1,857 
1,804 


3,607 
3,793 
2,021 
i;871 
1,813 


3,915 
3,336 
2.061 

1,889 
1,881 


3,884 
2,913 
2,029 
1,838 


3,840 
2,606 
1,941 
1,789 


4,034 
2,296 
1,999 
1,818 


4,073 


1935 


4,086 4,082 
1,874 1,795 
1,817 1,818 
1,789 1,696 


4,012 
1,825 
1,808 
1,706 


1,967 


1936 


1,928 


1937 


1,758 


1038 















CIVIL WORKS ADMINISTRATION 



1933 . 
























3,284 


1934 


6,269 


6,806 


6,143 


4,606 


3,191 


3,427 


3,613 


3,918 





















WORKS PROGRESS ADMINISTRATION AND OTHER WORKS PROGRAMS 



1935 










3,802 
4,729 
3,955 


3,367 
4,762 
3,669 
1 4 946 


3,254 
4,848 
3,613 


3,201 
3; 434 


3,267 
4,986 
3,480 


4,640 
4 783 


1936 


4,877 
4,339 
3,676 


6,025 6,209 
4,223 4,203 
3,746 14,098 


6,060 
4,122 
■4,308 


4,897 
4,196 
14,445 


4,806 
4,141 
'4,671 


1937 


3,468 


1938 















Source: Compiled under the direction of the Central Statistical Board from data published by the ClvU 
Service Commission, the Works Progress Administration, the Bureau of Labor Statistics, and other govern- 
mental agencies. The figures shown are the cumulative totals corresponding to the lines on the chart. 



CONCENTRATION OF ECON- 



»WER 



227 



Exhibit No. 62 

[Chart based on following statistical data app' r^ lu text on p. 84] 

United Slates business population ' 

(Thousands of concerns] 



Year 


Total 

listed 

concerns' 


New 
enter- 
prises » 


Total 
discon- 
tinued * 


Year 


Total 

listed 

concerns' 


New 
enter- 
prises « 


Total 
discon- 
tinued « 


leoo 


1,174 
1,219 
1,253 
1,281 
1,320 
1,357 
1,393 
1,418 
1,448 
1,486 
1,515 
1,525 
1,564 
1,617 
1,655 
1,675 
1,708 
1,733 
1,708 
1,711 


272 
286 
304 
305 
308 
329 
334 
339 
351 
360 
358 
365 
369 
387 

380 
369 
361 
307 

308 


248 
248 
265 
272 
268 
287 
299 
302 
325 
331 
348 
326 
316 
348 
369 
347 
344 
385 
305 
197 


1920 


1,821 
1,927 
1,983 
1,996 
2,047 
2,113 
2,158 
2,172 
2,199 
2,213 
2,183 
2,125 
2,077 
1,961 
1,974 
1,983 
2,010 
2,057 
2,102 


459 
483 
491 
469 
477 
498 
484 
483 
476 
453 
423 
355 
338 
345 
379 
392 
408 
400 


353 


1901 


1921 

1922 


1902 


478 
417 
411 


1903 


1923 


1904 


1924 . 


1905 


1925 

1926 


451 
471 


1906 


1907 


1927 


1908 


1928 


463 


1909 ,. 


1929 


481 


1910 


1930 


481 


1911 


1931. 

1932 


1912 




1913 


1933 


832 


1914 


1934 


319 
386 
S83 
361 


1915 


1935 


1916 


1936 


1917 


1937 


1918 


1938 




1919 













1 Source: Dun & Bradstreet release: Vital Statistics of Industry and Commerce. 

« Total listed concerns refers to the total of industrial and commercial names in the July issue of the Dun & 
Bradstreet Reference Book. In general, it excludes financial institutions, including banks, railroads, pro- 
fessional enterprises such as lawyers and doctors, farmers, and others not ordinarily users of commercial 
credit in the accepted sense. In general, branches are listed, except in the case of chain distributors. 

' New enterprises refers to names added, but does not include cases arising from change in style or geo- 
graphical location within the community. The figures refer to calendar years. 

« Discontinued enterprises includes those which have discontinued operation as a result of any of th« 
following types of action: Assignment, attachment, voluntary petition, involuntary petition, receivership, 
absconding, compromise, execution, foreclosure, and oihcr voluntary discontinued operations in which ther* 
1« no oflQcial record of loss to creditors. The figures refer to calendar years. 



Exhibit No. 63 appears in text on p. 87 



228 



CON'CIONTRATIOX OF KCONO.MIC POWER 

Exhibit No. 54 

[Chart based on following statistical data appears in text on p. 93 
Number of corporations and partnerships ' 



Year 


Partnerships 


Corporations 


Year 


Partnerships 


Corporations 


1909 




262, 490 
270, 202 
288, 362 
305, 330 
316,909 
» 331, 445 
' 334. 443 
341,253 
351, 426 
317, 679 
320, 198 
345, 596 
356, 397 
382, 883 


1923 ..-. 


304, 996 
321, 158 
309. 414 
295. 425 
282,841 
272, 127 
263, 519 
244, 670 
230, 407 
216,712 
214, 881 
221, 740 
222, 293 
237, 367 


398, 933 






1924 


417, 421 






1925 


430. 073 






1926..... 


455, 320 


1913 




1927 


476, 031 


1914 




1928 


495, 892 






1929 


509,436 


1916 




1930 


518, 738 


1917 


» 31, 701 
100, 728 

240, 767 
259, 359 
287, 959 


1931... 


516,404 


1918 


1932 


508,639 




1933 


504,080 


1920 


1934 


< 528, 898 


1921 


1935 


633, 631 


1922 


1936 


630, 779 









1 Source: Bureau of Internal Revenue, Treasury Department. For number of partnerships, see Statis- 
tics of Income for 1936, pt. 1, p. 32. "For corporations, see Statistics of Income for 1935, pt. 2, p. 21, and Pre- 
liminary Report of Corporation Income, etc., for 1936, p. 6. 

The accompanying information, based on tax returns filed with the Bureau of Internal Revenue, provides 
the only official data giving an inaication of the number of partnerships and corporate enterprises. Owing 
to the varying provisions of the revem^e acts, as well as to other limitations, care should be taken in em- 
ploying these figures to avoid misinterpretation. 

It is emp^iasized that the 1917 figure for partnerships represents only those domestic partnerships having 
a net incomeof more than $0,000, without deducting salaries or interest paid to partners, and foreign part- 
nerships having a net income of .$3,000 or over from sources within the United States. According to the 
tax regulations beginning with the year 1918, every partnership doing business in the United States is re- 
quired to make a return of income regardless of the amount of its gross or net income. A probable explana- 
tion for the sharp increases in the earlier years shown in this table is that all rmrtnerships did not meet 
this requirement but that a progressively larger number complied from year to year. Hence, it is believed 
that the figures for partnerships up to about the middle 1920's do not constitute a reliable basis for measuring 
changes. 

With respect to corporations, the privilege of filing consolidated returns was abolished in 1934, except to 
common carriers by raHroad. ' This change, therefore, is primarily responsible for the increase in the number 
of corporation returns filed in that year. Approximately 26,900 returns were filed as separate returns in 
1934 by corporations for which consolidated returns were filed in 1933. On the other hand, it has been found 
that certain subsidiary companies, which were included in consolidated returns in 1933, were merged In 
1934 to form departments of the parent company and, therefore, were exempt from filing a separate return. 

' Approxiihately 32,000 returns related to 1914, but reported in 1915, have been excluded from the flgur» 
for 1915 and included with that for 1914. 

• Figure represents only those partnerships subject to war excess-profits tax. 

« See last paragraph of Note 1 above. 



Exhibit No. 56 appears in text on p. 96 



COXCENTIIATION OF ECONOMIC POWER 

Exhibit No. 56 
[Chart based on following statistical data appears in text on p. 97] 



229 



Distribution of employees and employers by size of business concern, July- 
December 1937 1 



Number of employee 
wage items on em- 
ployer's return ' 


Percent of 
total number 
of employer 

returns * 


Percent of 
total number 
of employee 
wage items > 


Number of employee 
wage items on em- 
ployer's return ' 


Percent of 
total number 
of employer 

returns » 


Percent of 
total number 
of employee 
wage items • 


J 


25. 313 
15. 123 
10. 257 
7.214 
5.494 
4.290 
3.538 
2.718 
2.219 
10. 635 
4.037 
2.199 
1. .349 
.931 
.661 
.508 
.392 
.324 
1.450 


1.2 
1.4 
1.4 
1.4 
1.3 
1.2 
1.2 
1.0 
.9 
6.7 
4.5 
3.5 
2.8 
2.3 
2.0 
1.8 
1.5 
1.4 
9.4 


200 to 299 


0.487 
.241 
.144 
.095 
.065 
.046 
.035 
.030 
.125 
.032 
.015 
.008 
.005 
.003 
.003 
.002 
.001 
.011 


5 5 


2 


300 to 399 


3 


3 


400 to 499 


3.0 




500 to 599 


2.4 


5 


600 to 699 .. 


2.0 


a 


700 to 799 


1 6 


7 . 


800 to 899 


1.4 


8 '.... 


900 to 999 


1.3 


9 


1,000 to 1,999 


7.8 


10 to 19 


2,000 to 2,999 


3 


20 to 29 


3,000 to 3,999 


2.3 




4,000 to 4,999 . 


1.7 


40 to 49 


5,000 to .1,999 

6,000 to 6,999 


1.2 


50 to 59 ...-. 


1.0 


60to69 


7,000 to 7,999 


.0 




8,000 to 8,999 


.7 


80 to 89 


9,000 to 9,999 


.5 


90 to 99.-. 


10,000 and over 


12.3 


100 to 199 









> Source: Social Security Bulletin, September 1938, No. 9, Wages and Employment Under the Old-age 
Insurance Program, John J. Corson, table 2, p. 22. 

' The number of wage items includes a certain amount of duplication, since the name of a person who was 
engaged by more than one concern during the July-December period would have been listed on the return 
made by each of his employers. 

5 Number of employer returns represents total number of companies and individual employers reporting 
to the Bureau of Internal Revenue under title VIII of the Social Security Act. 



Exhibit No. 57 

[Chart based on following statistical data appears in text on p. 103] 
Size of corporations by assets in 1935 ' — no consolidated returns except as noted * 



Asset classes (in 
thousands of dollars) 


Percent of 
total cor- 
porations 
submitting 
returns » 


Percent of 
total assets 
owned by cor- 
porations 
submitting 
returns 


Asset classes (in 
thousands of dollars) 


Percent of 
total cor- 
porations 
submitting 
returns » 


Percent of 
total assets 
owned by cor- 
porations 
submitting 
returns 


Under 50 


54.7 
14.1 
14.0 
6.9 
4.4 


1.4 
1.4 
3.0 
3.3 
4.2 


1,000 to 5,000 


4.4 

.7 
.6 
.2 


12.6 


50 to 100 




6.4 


ino to 250 


10,000 to 50,000 - 

50,000 and over 


16.2 


250 to 500 


51 5 


500 to 1,000 









' Source: Statistics of Income for 1935, Pt. 2, Bureau of Internal Revenue, U. S. Treasury Pepartment, 
p. 16. 

1 The orivilege of filing consolidated returns, limited by the Revenue Act of 1934 to nfBliated groups of 
railroad corporations, was exercised for 1935 by 63 such groups. These consolidated returns are included 
in the table. 

» The total number of corporations submitting balance sheet data in 1935 was 415,205 out »f a total of 
477,113 active corporations. However, the total compiled receipts of these corporations submitting balance 
sheets amounted to $112,098,495,000 out of a total con piled receipts of all corj f-ratior-sof $114,649,717,100. 



230 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 68 
[Chart based on following statistical data appears in tent on p. 105] 



Size of corporations by assets in 19S6 ' excluding financial companies — no consoli- 
dated returns except as noted ' 



Asset classes (in 
thousands of dollars) 


Percent of 
total number 
of corpora- 
tions 


Percent of 
total cor- 
porate assets 


Asset classes (in 
thousands of dollars) 


Percent of 
total number 
of corpora- 
tions 


Percent of 
total cor- 
porate assets 




60.9 
13.7 
12.4 
6.4 
3.4 


2.1 

1.9 
3.8 
3.8 
4.6 


1,000 to 5,000 


3.2 
.6 
.4 
.1 


13.0 




5,000 to 10,000 


6.6 




10,000 to 50,000 

50,000 and over 


16.6 


250 to 500 


47.6 


600 to 1 000 









> Source: Statistics of Income for 1935, Pt. 2, Bureau of Internal Revenue, U. S. Treasury Department, 
pp. 16 and 82. 

These data cover 311,059 corporations with total assets of $158,402,823,000. Financial corporations total- 
ing 104,146, with assets of $144,747,408,000, have been excluded. This group includes banks, stock and 
bond brokers, real estate and real estate holding companies, insurance companies and other financial com- 
panies such as loan companies, clearing houses, other brokers, promoters, investment trusts, and personal 
holding companies. 

» The privilege of filing consolidated returns, limited by the Revenue Act of 1934 to affiliated groups of 
railroad corporations, was exercised for 1935 by 63 such groups. These consolidated returns are included 
In the table. 



Exhibit No. 69 
[Chart based on following statistical data appears in text on p. 106] 
Assets 0/ large corporations, $6,000,000 and over — percent of industry total in 19S5 
[No consolidated returns except as noted >] 



Branch of activity 


Percent 

of total 

corporate 

assets 


Percent 
of total 
number 
of cor- 
porations 


Branch of activity 


Percent 

of total 

corporate 

assets 


Percent 
of total 
number 
of cor- 
porations 


Transportation and other 
public utilities 


92.7 
77.7 
65.8 
64.8 


4.6 
2.6 
1.6 
2.6 


Trade 


34.8 
30.6 
28.4 
25.1 


0.3 


Service 


.6 






.7 






.3 


Mining and quarrying 







» Source: Statistics of Income for 1935, pt. 2, Bureau of Internal Revenue, U. S. Treasury Department, 
pp. 66-83. The corporations on which this table is based number 6,902, with assets of $224,558,936,000, out 
of a total of 414,273 corporations with total assets of $303,059,681,000. Figures include both corporations 
with net income and those with no net income. Corporations whose nature of business was not reported 
are excluded. These number 932, with total assets of $90,549,000. 

» The privilege of filing consolidated returns, limited by the Revenue Act of 1934 to affiliated groups of 
railroad corporations, was exercised for 1936 by 63 such groups. These consolidated returns are included 
In the table. 



CONCENTRATION OF ECONOMIC POWER 



231 



Exhibit No. 60 

[Chart based on following statistical data appears in text on p. 107] 

Assets of large manufacturing corporations of $5,000,000 and over — percent of 
industry total, 19SB " 

[No consolidated returns] 



Industry 


Percent 

of total 

corporate 

assets 


Percent 
of total 
number 
of cor- 
porations 


Industry 


Percent 

of total 

corporate 

assets 


Percent 
of total 
number 
of cor- 
porations 




ei.7 

85.7 
80.0 
73.5 
62.1 
60.0 


5.9 

2.7 
4.3 
2.0 
3.5 
1.2 


Stone, clay, and glass prod- 


55.9 
42.6 
38.' 4 




Chemicals and alfied prod- 


1.8 


ucts 


Printing, publishing, and 








Metal and metal products 


Textiles and their products... 


1.0 
1.0 















' Source: Statistics of Income for 1935, pt. 2, Bureau of Internal Revenue, U. S. Treasury Department, 
pp. C8 to 78. These statistics comprise 1,190 corporations with assets of .133,712,400,000 out of a total of 78,167 
corporations in these manufacturing Industries, with assets of $50,328,783,000. Corporations with both net 
income and no net income are included. 



Exhibit No. 61 appears in text on p. 119 



Exhibit No. 62 

(Chart based on following statistical data appears in text on p. 120] 

New private residential and nonresidential building activity in the United States, 

1916-S8 ' 



Year 


Residential > 


Nonresiden- 
tial' 


Year 


Residential * 


Nonresiden- 
tial! 


1915 


$990,000,000 
1, 1 10, 000, 000 
940, 000, 000 
720,000,000 
1,600.000,000 
1, 610, 000, 000 
1.760,000,000 
2, 833, 000, 000 
3,757,000,000 
4,300,000,000 
4. 584, 000, 000 
4. 591, 000, 000 


$424,000,000 

639, 000, 000 

712,000,000 

638,000,000 

956. GOO, 000 

1, 743, 000, 000 

1,329.000,000 

1. 373, 000, 000 

1,560.000,000 

1,628,000,000 

1,938,000.000 

2,381,000,000 


1927 

1928 


$4,289,000,000 

3,961,000,000 

3, 424, 000. OOP 

2,195,000,000 

1, 396, 000, 000 

641,900,000 

314, 000, 000 

272,000,000 

633.000,000 

1,101.000,000 

1,393,000,000 

* 1,285, 000, 000 


$2,414,000,000 


1916 


2, 425, 000, 000 


1917 


1929 

1930 


2, 432, 000, 000 


1918 


1, 867, 000, 000 


1919 


1931 


1,110.000,000 


1920 


1932 


542, 000, 000 


1921 


1933 


362, 000, 000 


1922 


1934 


410, 000, 000 


1923 


1935 


460, 000, 000 


1924 

1925 . . 


193G 

1937 


625, 000, 000 
894, 000, 000 


1926 


1938 


< 745, 000, 000 









' Source: Estimates of Bureau of Foreign and Domestic Commerce. (See "Construction Activity in th» 
United States, 1915-37", Domestic Commerce Series, No. 99.) 

' New private residential building activity from 1920 to 1938 was estimated primarily from the building 
permit data for principal cities in the United States, compiled by the Bureau of Labor Statistics. Suitable 
allowances were made for incomplete coverage, lapses, underreporting of value, and for the differences In 
timing between the issuance of a permit and actual construction in terms of employment and the delivery 
of materials. Estimates for the years 1915 to 1920, inclusive, were projected back on the basis of the yea%- 
to-year changes indicated by the dollar value of residential building contracts awarded in 27 eastern States 
reported by the F. W. Dodge Corporation. The estimates exclude both expenditures for residential con- 
struction in farm areas and all public residential work, and also expenditures for alteration, repairs, and 
maintenance. 

' The estimates for private nonresidential building construction of various types are baaed primarily 
upon statistics of contracts awarded reported by the F. W. Dodge Corporation with suitable allowences 
for incomplete geographic and day-labor coverage, and for the differences in timing between the commence- 
ment of construction, as indicated by contracts awarded, and the actual construction work. The fol- 
lowing are the types of nonresidential building included: Commercial, factory, religious and memorial, 
educational, hospital and institutional, and social and recreational. The estimates do not include expendi- 
tures for public nonresidential construction, for private nonresidential building by utilities, for nonresi- 
dential structures erected in farm areas, and all repair and maintenance expenditures. 

* Preliminary estimate. 



124491— 39— pt. 1- 



-16 



232 



CONCENTRATION OF ECONOMIC POWER 



Ej^hibit No. 63 
[Chart based on following statistical data appears In text on p. 121] 
New railroad and highway constrvction activity in the United States, 1915- -^i 



Year 


Railroad > 


Highway ' 


Year 


Railroad a 


Highway > 


1915 


$241,000,000 
281,000.000 
361,000,000 
3r,5, 000, 000 
266,000,000 
184,000,000 
184, 000, 000 
176,000,000 
-361, 000, 000 
365, 000, 000 
393, 000. 000 
491,000,000 


$298,000,000 
308,000,000 
313, 000, 000 
288, 000, 000 
415, 000, 000 
640, 000, 000 
840, 000, 000 
851,000,000 
783, 000, 000 
951, 000, 000 
1, 056, 000, 000 
1, 039, 000, 000 


1927 


$462, 000, 000 
433,000,000 
510, 000, 000 
521, 000, 000 
292, OOO, 000 
139, 000. 000 
94, 000. 000 
128, 000, 000 
116,000.000 
149. 000. 000 
199, 000. 000 


$1 190 000 000 


1016 


1928 


1, 270, 000, 000 
1, 248, 000. 000 
1 481 000 000 


1917 


1929 


1918 


1930 


1919 


1931 


1,323.000,000 


1920 


1932 




1933 




1922 


1934 


821 000 000 


1923 


1935 


622, 000, 000 


1924 


1936 

1937 


876, 000, 000 


1925 


811,000 000 


1926 











1 Source: Estimates of Bureau of Foreign and Domestic Commerce. (See "Constnution Activity in the 
United States, 1915-37", Domestic Commerce Series, Ko. 99.) 

• Based on reported expenditures of class I railroads for roadway and structures compiled by the Bureau 
of Railway Economic^, from 1922 to 1937. Include^ expenditures for main track, yards, and sidings; heavier 
rail and additional ballast; shop and engine houses; station and office buildings, and other station facilities ; 
bridges, trestles, and culverts; signals and Interlockers; and all other improvements. The total gross ex- 
penditures for roadway and structure were adjusted to exclude expenditures for land, and increased to allow 
for expenditures by other railroads In the United States not Included under this classification. Estimates 
for the years 1915 to 1921, inclusive, were made, using the year-to-year changes in the miles of new track 
completed, adjusted by an Index of the cost of constructi(-n compiled by the Interstate Commerce Com- 
mission. The totals in all years do not Include expenditures by the railroads for maintenance of way and 
structures. 

> Includes the expenditures of States, counties, and cities, for new highways, streets, and roads. The 
' estimates of State and county highway expenditures were based mainly on reports of the Bureau of Public 
Roads of the U. 8. Department of Agriculture. The city expenditures for roads and streets were derived 
from the Financial Statistics of Cities, published by the Bureau of the Census. The estimates include all 
Federal-aid contributions to the States for highway work, but exclude expenditures for maintenance. The 
work-relief expenditures In recent years on highway, road, and street projects have also been excluded. 



Exhibit No. 64 

[Chart based on following statistical data appears in text on p. 122] 

Production of steel castings for 9 plants, June each year, 1927-38 

[June 1927-100] 



Year 


Plant 
No.l 


Plant 
No. 2 


Plant 
No. 3 


Plant 
No. 4 


Plant 
No. 5 


Plant 
No. 6 


Plant 
No. 7 


Plant 
No. 8 


Plant 
No. 9 


Entire 
industry 


1927 


100 
112 
'106 
112 
106 


31 
100 

25 

69 
125 

56 


100- 

79 
111 

79 

36 

25 

39 

29 

21 

32 

68 

25 


100 
176 
195 
236 
157 
57 
26 
26 
60 
107 
76 
48 


100 
156 
227 
150 

35 

21 
148 

96 
181 
192 
227 

82 


100 
125 
151 
110 

32 
44 
44 
88 
137 
60 


100 
62 
71 
80 
28 
11 
19 

111 
57 
59 

121 
61 


100 
121 
119 
108 
43 
12 
40 
60 
7 

10 
58 
5 


100 
108 
145 
50 
20 
9 
59 
69 
13 
76 
128 
33 


100 
184 
261 
182 
62 
2 
20 
16 
7 
184 
234 


100 


1928 


l(ic. 


1929 




1930 


10,".. 


1931 


40 


1932 


14 


1933 


3: 


1934 


5? 


1935 


2<i 


1936 


7S 


1937. : 


10.^ 


1938 


25 







« Source: Bureau of the Census, U. S. Department of Commerce. 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 65 

[Chart based on following statistical data appears in teit on p. 123) 

Portland cement production for 9 mills, June each year, 1926-S8 

[June 1925=100] 



233 



Year 


Plant 
No.l 


Plant 
No. 2 


Plant 
No. 3 


Plant 
No. 4 


Plant 
No. 5 


Plant 
No. 6 


Plant 

No. 7 


Plant 
No. 8 


Plant 
No. 9 


Entire 
industry 


1925 


100 
106 
107 
125 
84 
76 
81 
8 

45 
50 
48 
Idle 
45 
49 


100 
113 
111 
103 
157 
153 
147 
143 
69 
96 
66 
79 
86 
66 


100 
83 
83 
94 
62 
59 
21 
17 
26 
33 
35 
50 
30 
39 


100 
148 
166 
149 
123 
148 
56 
64 
53 
110 
94 

123 

128 


100 
97 

.3 

99 
65 
36 
48 
44 
55 
55 
55 


100 
134 
143 
143 
133 
104 
76 
112 
118 
126 
110 
173 
155 
236 


100 
115 
87 
109 
91 
101 
105 
64 
Idle 
71 
07 
78 
65 
51 


100 
104 
104 
100 
84 
116 
149 
58 
39 
93 
Idle 
112 
119 


100 

64 

107 

58 

57 

68 

59 

Idle 

Idle 

Idle 

58 

47 


100 


1926 - 


110 


1927 

1928 


112 
114 


1929 


100 




112 


1931 


P2 


1932 


52 


1933.. 


51 


1934 


57 


1935 


57 


1936 


74 


1937.. 


73 


1938 


60 







Source: Bureau of the Census, U. S. Department of Commerce. 



Exhibit No. 66 

(Chart based on following statistical data appears in text on p. 124) 

Coke production for 9 plants, June each year, 1925-38 ' 

[June 1925 = 100] 



Year 


Plant 
No 1 


Plant 
No. 2 


Plant 
No. 3 


Plant 
No. 4 


Plant 
No. 5 


Plant 
No. 6 


Plant 
No. 7 


Plant 
No. 8 


Plant 
No. 9 


Entire 
industry 


1926 


100 
102 
100 
143 
144 
133 
68 
22 
73 
91 
62 
137 
151 
43 


100 
113 

1§? 

161 
127 
80 
43 
84 
104 

127 
181 
90 


100 
115 
130 
118 
139 
147 
210 
177 
200 
196 
185 
184 
217 
178 


100 
84 

100 
98 
85 
58 
37 

1 

26 
34 
59 
105 
24 


100 
128 
124 
127 
121 
102 
50 
22 
17 
51 

55 
24 


100 
106 
106 
101 
102 
104 
106 
79 
90 
106 
101 
100 
104 
103 


100 

100 
87 
90 

117 
86 
79 
49 
72 
74 
72 

100 
92 
74 


100 
111 
108 
150 
165 
152 
115 
76 
42 
75 
63 
73 
113 
56 


100 
90 
163 

\t 
140 
106 
54 
36 
46 
52 
62 
80 
60 




1926 


115 


1927 


114 


1928 


120 


1929 




1930 


125 


1931 


80 


1932 


49 


1933 


71 


1934 


05 


1935 




1936 


117 


1937 


128 


1938 


66 







» Source: The Bureau of Mines, U. 8. Department of the Interior. 



234 CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 67 

[Chart based on following statistical data aprears In text on i>. 125] 
FU)ur production for 9 mills, June each year, 1927-58 * 

[June 1927=100] 



Year 


Plant 
No.l 


Plant 
No. 2 


Plant 
No. 3 


Plant 
No. 4 


Plant 
No. 5 


Plant 
No. 6 


Plant 
No. 7 


Plant 
No. 8 


Plant 
No. 9 


Entire 
industry 


1927 


100 
87 
93 
116 
146 
24« 
164 
191 
194 
192 
117 
. 165 


100 
18 
79 
86 
95 

124 
92 

107 
93 

133 
68 

156 


100 
44 
72 
66 
67 
67 
61 
64 

123 
66 
.7 


100 
38 
47 
54 
21 

39 
59 
59 
53 


100 
307 
274 
251 

42 
444 
223 
250 
125 

89 
253 
178 


100 
85 
65 
86 

128 
64 
86 
91 
57 
55 
48 


100 
96 
78 
64 
80 
75 
92 
78 
50 
66 
74 
77 


100 
105 
112 
101 
105 
82 
97 
82 
81 

103 
100 


100 
82 
87 

100 
87 
91 
78 
83 
66 
71 
81 
77 


100 


1928 


91 


1929 


105 


1930 


102 


1931 - 


91 


1832 


92 


1933 


101 


1934 


88 


1935 


87 


1936 


92 


1937 


90 


1938 


99 







I Source: Bureau of the Census, V. S. Department of Commerce. 



Exhibit No. 68 

[Chart based on following statistical data appears in text on p. 127] 

Employment for 15 plants in the rubber tire and tube industry, June each, year 192S-S6 ^ 

[Average 1923-25=100] 



Year 


Plant 
No.l 


Plant 
No. 2 


Plant 
No. 3 


Plant 
No. 4 


Plant 
No. 6 


Plant 
No. 6 


Plant 

No. 7 


Plant 
No. 8 




91.4 
84.9 
122.6 
117.0 
140.5 
131.6 
156.0 
128.6 
103.9 
95.9 
106.0 
132.4 
115.5 
119.8 


115.1 
96.7 
136.1 
232.7 
234.5 
220.6 
357.5 
236.8 
213.8 
169. 3 
257.5 
334.8 
215.3 
210.2 


91.0 
108.9 
105.7 
125.0 
147.8 
122.3 
142.2 
94.5 
80.3 
80.6 
7S.9 
68.7 
47.9 
60.7 


97.4 
85.8 
113.7 
234.3 
248.2 
313.2 
150.8 
174.0 
143.8 
243.6 
222.7 
220.4 
192.5 
287.6 


104.0 
110.9 
.79.1 
90.9 
85.1 
60.1 
58.3 
56.9 
65.9 
66.6 
66.8 
79.4 
82.0 
78.0 


104.9 
99.2 

106.9 
83.3 
69.3 
60.0 
69.9 
60.2 
49.6 
50.3 
64.7 
71.6 
51.0 
60.9 


106.7 
81.6 
137.7 
123.7 
167.3 
179.9 
264.5 
217.8 
190.9 
188.6 
155.2 
257.8 
172.4 
245.0 


114.6 


1924 


92.4 


1926 


111.2 




97.1 




82.1 


1928 


91.7 




73.9 




61.0 


1931 


46.7 


1932 


32.1 




38.0 


1934 


64.0 


1935 


48.7 




34.8 






Year 


Plant 
No. 9 


Plant 

No. 10 


Plant 
No. 11 


Plant 
No. 12 


Plant 
No. 13 


Plant 
No. 14 


Plant 
No. 15 


1923 . 


84.4 
108.1 
116.1 
104.3 
110.6 
114.6 
12G.8 
72.6 
87.1 
88.3 
179.9 
207.4 
216.6 
214.3 


97.5 
103.7 
90.0 
61.6 
57.6 
64.6 
53.4 
33.3 
24.8 
26.5 
22.4 
22.2 
18.5 


105.6 
89.6 
114.4 
100.5 
107.9 
110.7 
149.4 
146.7 
131.4 
119.9 
143.9 
198.3 
180.3 


81.1 
109.4 
132.8 
1)8.5 
144.0 
155.3 
204.2 
109. 1 
174.6 
195.8 
241.9 
207. 
222.3 
225.7 


98.7 
82.7 
136.1 
108.1 
133.8 
133.6 
154.8 
123.3 
96.6 
88.3 
83.1 
118.C 
112.6 
111.6 


99.7 
85.8 
131.2 
109.7 
131.2 
129.7 
179.6 
157.2 
118.6 
124.3 
115.9 
108.3 
50.0 
82.8 


64.1 


1924 . 


82.1 




139.0 




111.1 




109.1 


1928 


141.5 


1929 - 


148.5 




123.8 


1931 


94.2 


1932 


98.2 


1933 


122. 9 




132.5 


1936 , 


101.5 




71.4 











1 Source: Bureau of Labor Statistics, V. S. Department of Labor. 



CONCENTRATION OF ECONOMIC POWER 



236 



Exhibit No. 69 

FROM THE NATIONAL RECOVERY ADMINISTRATION, REPORT OF THE PRESIDENT'8 
COMMITTEE OP INDUSTRIAL ANALYSIS, FEBRUARY 17, 1937, PAGES 204 AND 206 

The differences which most frequently gave rise to conflict are recapitulated in 
the following list : 
Difference in size: 

Large versus small concerns. 

Buyers in large quantities versus buyers in small quantities. 
Difference in degree of interest in the market: 

Permanent versus temporary enterprises. 

Concerns primarily engaged in a given market versus concerns operating 
there as a side line. 
Difference in cost: 

High cost versus lov/ cost concerns. 

Concerns with high fixed cost versus those with high variable cost. 

Concerns located at basing points versus those located elsewhere. 

Concerns with access to water transport versus those with access to rail 
transport only. 
DitTcrence in method of operation: 

Integrated versus nonintcgrated concerns. 

Single-shift versus multiple-shift concerns. 

Concerns selling direct versus concerns using distributors. 

Commercial enterprises versus cooperatives. 
Difference in the character of the market served: 

Concerns producing for export versus those producing for domestic sale. 

Concerns with active demand versus those with less active demand. 

Concerns whose demand is usually seasonal versus concerns with normal 
demand. 

Concerns producing on contract versus those producing for later sale. 
Difference in service: 

Full service enterprises versus partial service enterprises. 

Cash and carry enterprises versus call and deliver enterprises. 

Concerns selling standard products versus those selling specialties or sub- 
standard products. 
Difference in prestige: 

Concerns with consumer good will versus those which lack it. 

Concerns selling on a quality basis versus those selling on a price basis. 

Concerns which undertake extensive sales effort versus those which do not. 



P^xHiBiT No. 70 appears in text on p. 129 



Exhibit No. 71 

[Chart based on following statistical data appears in text on p. 130] 
Independent retail store population,^ 1916 and 19S6, S2 county-seat town* 





Grocery 
stores 


General 
and de- 
partment 
stores 


Drug 
stores 


Men's 
clothing 
stores 


Dry. 
goods 
stores 


Hard- 
ware 
stores 


Shoe 
stores 


Women'i- 
wear 
stores 


1916 


671 
898 
67 


217 
118 

16 


113 
138 
36 


128 
87 
1ft 


124 
56 
15 


110 
80 
24 


88 
59 
10 


22 


1935 


73 




1 







' Source: Dun <fe Bradstreet. 



236 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 72 

IChart based on following statistical data appoars in text on p. 132] 

Seasonality of industrial operations (indexes for nine indxistries) 



Industry 


Jan. 


Feb. 


Mar. 


Apr. 


May 


Jane 


July 


Aug. 


Sept. 


Oct. 


Nov. 


Dec. 


Pip iron - 


94 
98: 
58 

104 
96 

102 

fio 

109 
98 


102 
106 

59 
108 
108 

95 

118 
99 


106 
107 

72 
105 
111 

91 
120 
102 
101 


107 
lOS 
100 
103 
105 
93 
80 
107 
102 


108 
106 
122 
102 

98 
102 

84 
106 
103 


102 
97 

128 
95 
90 

111 
86 
96 

102 


97 
93 

121 
89 
97 

112 
88. 
7S 

101 


98 
98 

123 
91 

110 

105 
89 
72 

101 


98 
97 
121 
99 
112 
107 
101 
101 
100 


100 
99 
115 
103 
103 
99 
107 
104 
99 


98 
98 
102 
104 
87 
94 
110 
101 
97 


90 




93 




79 


Cotton cnnsum:>tion 

Boot« and shoes 


97 
83 




89 




109 


Anthracite 


106 
97 







Source: Division of Research and Statistics, Board of Governors of the Federal Reserve System. 
These are the seasonal adjustment factors calculated by The Board of Governors of the Federal Reserve 
System for use in the construction of ihe indexes of industrial production. 



?]XHIBIT No. 73 

[Summary of Analysis of Trade Prnctice Provisions in N. R. A. Codesl 

Any careful outline of these attempted trade-practice controls would make a 
volume. By way of merely suggesting the bewildering ramifications of the 
experiment, I have jotted down some of the major purposes and noted either the 
nature or the number of types of provisions aimed at their accomplishment 
(mtiv- of the types were themselves finely subdivided). 

i -oduction and capacity control provisions. 
: . Limitations on machine and plant hours. 

2. Restrictions on productive capacity. 

3. Limitation on production through quotas. 

4. Limitation on inventories. 
IL Minimum price provision. 

1. Prohibition of destructive price cutting. 

2. Permitting establishment of minimum prices in cases of emergency only. 

3. Minimum prices set forth in code or code authority empowered to 

establish. 

4. Prohibitions against sellhig below cost — with innumerable supporting 

regulations. 

5. Provisions regulating ])rice differentials between classes of products — 

with five sets of variations. 
in. Open price provisions — Avith 11 alternative approaches or safeguards. 
IV. Restriction of indirect price concessions: 

17 re.strictions on time of buyers' payments. 

51 restrictions on guarantees, allowances, options, and similar buyers^ 
privileges. 

18 restrictions on supply of additional bargain goods. 
21 restrictions on service to buyers. 

18 restrictions on financial assistance to buyers. 

9 restrictions on shipment concession. 

5 restrictions on commission concessions. 
16 restrictions on payments for buyers' services, as allowances, etc. 

2 restrictions on accepting competitors materials from bu3^er 

12 restriction.s on sale of substandard or. obsolete goods. 

13 restrictions on concessions beyond agreement. 

11 restrictions on forms of payment concealing concessions. 

38 restricfions on selling agreements, invoices, etc., concealing concessions. 

9 mandaiory forms of agreement for prevention of concealed concessions. 
1,1 restrictions on granting of concessions to suppliers. 

4 restrictions on acceptance of concessions. 



CONCENTRATION OF ECONOMIC POWER 



237 



V. Provisions designed to preserve or modify channels of distribution : 
5 restricting customer classes. 

4 defining customer classes. 

5 restrictions on trade differentials. 
9 restrictions on quantity discounts. 

7 resale price maintenance provisions. 

11 prohibition of discriminatory prices. 
5 restrictions on nonobservers. 

17 provisions relating to controlled sales representatives. 
13 miscellaneous. 

VI. Seven provisions to preserve or modify geographical relationship (as basing 
points) . 

VII. Eleven regulations of designs or identifications. 

VIII. Standardization, simplification, and labeling: 
30 standardization particulars. 

34 labeling particulars. 

18 method particulars. 
Limiting coercive and predacious devices: 

10 coercive devices Ijv members as sellers. 
5 coercive devices by members as buyers. 
25 predacious devices used against competitors. 
Limiting deception and misrepresentation: 
44 in relations with customers. 

12 in relations with others. 

XL Regulating bidding and awarding practices: 
24 making original offers final. 

3 to eliminate waste in bidding. 

5 special. 
XII. Other provisions. 



IX. 



X 



Exhibit No. 74 appears in text on p. 138 



Exhibit No. 75 

[Chart based on following statistical data appears in text on p. 141] 
Production of wagons, buggies, passenger cars, and trucks, 1900-37 



Year 


Passenger 
cars' 


Trucks I 


Buggies > 


Wagons « 


1900 


4,192 
7,000 
9,000 
11,235 
22,419 
24, 550 
33, 500 
43, 300 
63, 500 
127, 731 
181,000 
199, 319 
356, 000 
461. 500 




909, 798 


567,184 


1901 




1902 








1903 








1904 


500 
700 
1,500 
3,255 
6,000 
10, 681 
22, 000 
23,500 


940, 120 


637,660 


1905 


1906 






1907-. 






1908 . . - - 






1909 


845, 562 


622, 671 


1910 


1911 . . 






1912 






1913 _ 







1 Source: Survey of Current Business, Bureau of Foreign and Domestic Commerce, United States Depart- 
ment of Commerce, for the years 1913 to 1937, inclusive. Automobile Facts and Figures, Automobil* 
Manufacturers Association, 1938, p. 4, for the years 1900 to 1912, inclusive. 

Data on automobile production in the I'iiited States represent manufacturers' sales, commonly referred 
to as production. The statistics comprise the output of all members of the Automobile Manufacturers 
Association as well as of certain other manufacturers reporting directly to the Bureau of the Census. In- 
cluded are foreign, assemblies from parts rrade in the United States and reported as complete units or ve- 
hicles. The figures for passenger cars include taxicabs. The figures for trucks include ambulances, funeral 
cars, fire apparatus, street sweepers, and busses. 

'Source: Census of Manufactures, Bureau of the Census, United States Department of Commerce. 
Figures for buggies include buggies, sulkies, and hacks. No figure appears for 1933 because data were too 
Incomplete. 

' Source: Census of Manufactures, Bureau of the Census, United States Department of Commerce. Fig- 
ures for wagons include farm wagons and trucks, two-wheeled carts, and commercial wagons (business, 
mail, patrol, and ambulances). Handcarts and pushcarts are excluded. Lunch wagons are not included 
In 1931 and 1935. The 1933 census figure has been corrected by 8,355 for estimated number of wagons not 
reported. 



238 CONCENTRATION OF ECONOMIC POWER 

Produdion oj wagons, buggies, passenger cars, and trucks, 1900-S7 — Continued 



Year 


Passenger 
cars 


Trucks 


Buggies 


Wagons 


1914 


543, 679 
895, 930 
1, 525, 578 
1, 745, 792 
943, 436 
1, 657, 652 
1, 905, 560 

1, 442, 007 

2, 274, 185 

3, 624. 717 
3, 185, 881 
3, 735, 171 

3, 783, 987 
2, 936, 533 
3,815,417 

4, 587, 400 
2, 784, 745 
1,973,090 
1, 135, 491 
1,573,512 
2,177,919 
3, 252, 244 
3,669.528 
3,915,889 


25, 375 
74, 000 
92, 130 
128, 157 
227,250 
275, 943 
321,789 
154,816 
269, 991 
409, 295 
416, 659 
530, 059 
516,947. 
464, 793 
543, 342 
771,020 
571,241 
416,648 
235, 187 
346, 545 
575, 192 
694, 690 
784, 587 
893, 085 


551, 685 


551, 105 






lyjg , 






jgjy ,. 












1919 . . 


2o. 143 


413,536 








35, 849 


79, 795 


1922 




\\iiZ"" - 


59, 353 


223,972 






1925 . .- 


21, 734 


199, 043 


igof, 






7,795 


116,428 






192u 


3,597 


109, 100 








711 


28, 894 


1932 








o3, 533 








1935 . 


1,010 


99, 753 


1936 




1QJ7 













Exhibit No. 76 

[Chart based on following statistical data appears in text on p. 142] 
Production of fuels, 1870-1937 



Year 


Petorloum 
(barrels) 1 


Natural gas 
(cubic feet)" 


Bituminous 

coal (short 

tons)' 


Anthracite 
(short tons)* 


1870 


5, 300, 000 
5,200,000 
6, 300, 000 
9, 900, 000 
10.900,000 
8, 800, 000 
9, 100, 000 
13,400,000 
15,400.000 
19, 900, 000 
26,300,000 
27,700,000 
30, 400, 000 
23, 500, 000 
24, 200. 000 
21,900,000 
28,100,000 
28,300,000 




17,400,000 
27, 500. 000 
27. 200, 000 
31, 400, 000 
27,800,000 
29, 900, 000 
30,500,000 
34,800,000 
36, 200, 000 
37,900,000 
42,800,000 
54,000,000 
68, 400, 000 
77,300,000 
83,000,000 
72, 800, 000 
74, 600, 000 
88,000,000 


15, 700, OiJO 


1871 


19, 300, 000 


1872 




24, 200, 01 J 






26, 200. 000 






24, 800, 000 


1875 




22, 500, 000 






22, 800, 000 


1877 . 




25, 700, 000 


1878 




21,700,000 


1879 




30, 200, 000 


ISSO 




28, 6C0, 000 


188L 




31,900,000 


1882 

1883 


3, 000, 000, 000 
8,000,000,000 
24,000,000,000 
76, 000, 000, 000 
157, 000, 000, 000 
241,000,000,000 


35, 100, 000 
38, 500, 000 


1884 


37. 200, 000 


1886 


38, 300, 000 


1886 


39 000 000 


1887 


42, 100, 000 



' Source: Mineral Resources of the United States, Bureau of Mines, U. S. Department of Commerce, 
1929, pt. II, p. 470, for the years 1870 to 1929, inclusive; Minerals Yearbook, Bureau of Mines, U. S. Depart- 
ment of the Interior, 1937, p. 1008, for the years 1930 to 1935, inclusive; ibid., 1938, p. S95, for the years 1936 
and 1937. Production of crude i)etroleum is e.xprcssed in barrels of 42 United States gallons. 
Previous to 1924 the data were compiled by the U. S. Geological Survey. Prior to I'Jiy producers' stocks 
were not taken into account in the figures of production and in the statistical reports published by the Geo- 
logical Survey in the years 1914 to 1917, inclusive, this fact was indicated by ihe use of the terms "marketed 
jproduction" and "petroleum marketed." 

' Source: Minerals Yearbook. Bureau of Mines, U. S. Depnriracnt of the Interior, 1937, p. 1062, for the 
years 1906 to 1935, inclusive; ibid., 1938, p. 907, for the years 1936 and 1937. Estimates for the years 1882 to 
1906, inclusive, were obtained from Mr. F. O. Tryon of the Bituminous Coal C'ommission. These data are 
for natural gas produced in the United States and delivered to consumers. The 1937 figure is final but 
hitherto unpublished. The estimates prepared by Mr. Tryon were calculated from contemporary esti- 
mates of the quantity of coal displaced by gas or of the value of pas sold. 

•Source: Mineral Rtsoiu-ces of the United Statos, U. S. Oeolrcical Survey, U. S. Department of th« 
Interior, 1918, pt. II, |). 711, for the yeais 1870 to I'Jls, inclusive; Mineral Resources of the United States, 
Bureau of Mines, U. S. Department of Commerce, 1929, pt. II, p. 701, for the years 1919 to 1929, inclusive; 
Minerals Yearbook, Bureau of Mines, U. S. Department of the Interior, 1937, p. 814, for the years 1930 to 
1936, inclusive; Ibid., 1938, p. 696, for the years 1936 and 1937. Statistics of production are expressed in 
net or short tons of 2,000 pounds. The bituminous coal production figures include anthracite and 
semianthracite produced outside Pennsylvania and the production of lignite. Generally the figures Include 
all known operations that produce more than 1,000 tons per year. 

< Source: Same as fbr bituminous coal. Statistics of production In net or shor» tons of 2,000 p^'inN 



CONCENTRATION OF ECONOMIC POWER 
Production of fuels, 1870-1 937— Continued 



239 



Year 


Petroleum 
(barrels) 


Natural gas 
(cubic feet) 


Bituminou-s 

coal (short 

tons) 


Anthracite 
(short tons) 


1888 - . 


27, 600, 000 
35, 200, 000 
45, 800, 000 
54, 300, 000 
50. 500, 000 
48, 400, 000 
49, 300, 000 
52, 900, 000 
61, 000, 000 
60, 500, 000 
55, 400, 000 
57, 100, 000 
63, 600, 000 
69, 400, 000 
88, 800, 000 
100, 500, 000 
117, 100, 000 
134, 700, 000 
126,500,000 
166, 100, 000 
178,500,000 


343, 000, 000, 000 
250, 000, 000, 000 
239,000,000,000 
183.000,000,000 
159, 000, 000, 000 
149,000,000,000 
144,000,000,000 
137,000,000,000 
140, 000, 000, 000 
149, 000, 000, 000 
173,000,000,000 
22.3,000,000,000 
237, 000, 000, 000 
264, 000, 000, 000 
281,000,000,000 
298,000,000,000 
310,000,000,000 
351. 000, 000, 000 
389,000,000,000 
407, 000, 000, 000 


102, 000, 000 
95,700,000 
111,300,000 
117,900,000 
126, 900, 000 
128, 400, 000 
118,800,000 
135, 100, 000 
137, 600, 000 
147, 600, 000 
166, 600, COO 
193, 300, 000 
212, 300, 000 
• 225, 800, 000 
260. 200, 000 
282, 700, 000 
278, 700. 000 
315.100.000 
342, 900, 000 
304, 800, 000 
332, 600. 000 
379,700,000 
417, 100, 000 


46. 600, 000 


1889 


46, 500, 000 


1890 


46, 500, 000 


1891 - 


50. 700, 000 


1892 . 


52, 500, 000 


1893 ^ 


54, 000, 000 


1894 


51,900,000 


1895 -.- 


58,000,000 


1896 


54, 300, 000 


1897 


52 GOO 000 


1898 


53, 400, 000 


1899 


60, 400, 000 


1900 


57, 400, 000 


1901 


67,500 000 


1902 


41 400 000 


1903 - -- 


74, 600, 000 


1904 , 


73, 200, 000 


1905 


77, 700 000 


1906 


71 300 000 


1907 


85, 600, 000 


1908 




1909 


183,200,000 1 481,000,000,000 
209, 600, 000 1 fi09. 000. 000. 000 


SI 100 000 


1910 


84, 600, 000 


1911 

1912 


■220.400,000 
222,900,000 
248, 400, 000 
265, 800, 000 
281,100,000 
300,800.000 
335, 300. 000 
355,900,000 
378,400,000 
442, 900, 000 
472. 200, 000 
557, 500, 000 
732.400,000 
713,900,000 
763, 700, 000 
770, 900, 000 
901, 100, 000 


513.000.000,000 

562. 000, 000, 000 

682. 000, 000, OCO 

592. 000, 000, 000 

629, 000, 000, 000 

753, OCO, 000. 000 

795, 000. 000, 000 

721,000,000,000 

746, 000, 000, 000 

798. 000, 000, 000 

662.000.000,000 

763,000.000,000 

1,007,000.000,000 

1, 142, 000, 000, 000 

1, 189, 000, 000, 000 

1 313 000 000 000 


405, 900. OCO 
450 100 000 


90, 500, 000 
^iJ .inn nnn 


1913 .... . . 


478400000 ai'sooooo 


1914 


422, 700, 000 . 90, 800, 000 
442,600,000 1 89,000,000 
502, 500, 000 1 87, 600, 000 
551 800 000 ' 99 600 000 


1915 


1916 


1917 


1918 


679, 400, 000 98. 800, 000 


1919 


1920 


668 700 000 ! 89 000 000 


1921 


415 900 000 90 500 OCO 


1922 


422,300,000 H 700. 000 
664, 600, OCO 93, 300, 000 
4cS3, 700, 000 87, 900, 000 
520, 100, 000 ; 61, 800, 000 
573, 400. 000 84, 400, 000 


1923 


1924 


1925 


1926 


1927 


l!445.'00o!ooO.'000 


1928 




1929 

1930 


1,007,300,000 1,91S.0(X),000,0C0 
898 000 000 1 1 943 oon ono nnn 


535. 000, 000 
467, 500, OCO 
382, 100, 000 
300, 700, OCO 
333, 600. OCO 
359, 400, OCO 
372, 40*J, OCO 
439, 100, OCO 
•442,500. OCO 


73,800,000 
69, 400, 000 


1931 


851,100,000 
7S5, 200, OCO 
905, 700. 000 
908, 100, 000 
U9G, 600, OCO 
1,099,700.000 
1, 277, 700, 000 


1,686,000,000,000 
1, 556, 000, 000, OCO 
1,555.000,000,000 
1,771. 000, OCO, ceo 
1,917,000,000,000 
2, 168, 000, OCO, OCO 
2,447.000,000,000 


1932 


49,900.000 
49 500 000 


1933 


1934 


57, 200, 000 

52, 200, 000 

54, 600, 000 

» 51, 900, 000 


1935 


1936 

1937 



• Prfllmluary. 



240 



COxVCENTKATION OF ECONOMIC POWER 
Exhibit No. 77 

[ChBrt based on following statistical data appears in text on p. 143] 
Production and imports of sugar, 1870-1937 



Year 


Beet sugar 
production in 

continental 
United States i 


Cane sugar 
production in 

continental 
United States 2 


Sugar ship- 
ments to 
continental 

United Stales' 




Short tons 

500 

500 

600 

800 

100 

100 

100 

100 

200 

1,400 

600 

600 

600 

600 

1,100 

700 

1,000 

300 

2,200 

2.600 

4.100 

6.400 

14, 500 

24. 200 

24,100 

35, 000 

45, 000 

48, 400 

38, 900 

87, 500 

92. 100 

197, 500 

233, 700 

257. 400 

259. 000 

334, 800 

517, 500 

496, 100 

455, 7C0 

548. 000 

54^. 000 

641, 000 

741, 000 

785, 000 

773,000 

935, 000 

878. 000 

819, 000 

814, 000 

777, 000 

1,165,000 

1,091,000 

722. 000 

943. 000 

1, 166, 000 

977, 000 


Short tons 
89, 000 
78, 000 
67, 000 
54,000 
71,000 
86, 000 
100, 000 
80. 000 
125,000 
89,000 
L43, 000 
86, 000 
159,000 
151, 000 
113,000 
151.000 
96, 000 
188, 000 
172, 000 
151. 000 
249. 000 
185, 000 
249. 000 
305. 000 
365.000 
272. 000 
322, 000 
354, 000 
284, 000 
161.000 
312, 000 
364, 000 
373. 000 
278. 000 
415.000 
391. 000 
272. 000 
394, 000 
414. 000 
33i2. 000 
355. 000 
361, 000 
163, 000 
301,000 
247, 000 
139. 000 
311,000 
246, 000 
284. 000 
125, 000 
180, 000 
334, 000 
302, 000 
168, 000 
90, 000 
142. 000 


Short tons 
634, WO 


1871 


749,000 


1872 


772, 000 


1873 


841,000 




893.000 


1876 


739, 000 


1876 


826,000 


1877 - 


766, 000 




912, 000 


1879 


909, 000 


1880 


969. OoO 


1881 - - 


992. 0(j0 


1882 


1.068.000 


1883 - - --- 


1, 374, 000 


1884 


1, 356, 000 


1885 - - 


1, 339, 000 


1886 - ---. 


1, 502, 000 


1887 ^ 

1888 . 


1. 337, 000 
1. 378, 000 


1889 


1, 457, 000 


1890 


1, 739. 000 


1891 . - . 


1. 776, 000 


1892 


1, 879. 000 


1893 


2. 148, 000 


1894 .. 


1, 778, 000 


1895 


1, 947, 000 


1896 _. 


2, 439. 000 


1897 


1. 338. 000 


1898 


1. 987, 000 


1899 


2, 007, 000 


1900 ....- 


2. 399. 000 


1901. 


1, 965. 000 


1902 


2. 607. 000 


1903 


2, 330, 000 


1904 .... 


2. 391, 000 


1905 


2. 566, 000 


1906 


2, 806. 000 


1907 


2, 4.56. 000 


1908 


2 849. 000 


1909 


2, 863, 000 


1910 


2, 789, 000 


1911 . 


3. 020. 000 


1912 


3, 293, 000 


1913 


3, 400, 000 


1914 -. .. 


3. 628. 000 


1915 


3,791,000 


1916.... 


3, 732, 000 


1917 


3, 321, 000 


1918 


3. 874. 000 


1919 


4. 789, 000 


1920 


4, .305. 000 


1921 


5, 282. 000 


1922 


5, 303, 000 


1923 


4,712,000 


1924 


5, 577 000 


1925 


6, 877, 000 



Agriculture Yearbook, U. S. Department of Agriculturf . 1923, p. 845. for the years 1870 to 1908, 
rheWprld Sugar Situation, Bureau of Agriculturlsl Economics, U.S. Department of Agriculture, 



' Source: 
inclusive: The ' 

1938, p. 27, for the years Wii'j to 1937, inclusive. Figures are production of raw beet sugar in crop years begin- 
ning in July of the year .shown. Beet sugar is reported as refined and reduced to a raw ba<;is by multiplying 
by 1.07. As published, the 1870-1908 series was on 4 refined basis and the 1909-37 series on a raw basis. 
The 1937 figure is preliminary. 

• Source: Same as for beet sugar. Figures are prodnetioi' of raw cave sugar in crop years beginninfe 'n 
July of years shown. Figures from 1370 to 1923, inclusive, are for Louisiana and Texas; from 1924 to 1927, 
inclusive. Louisiai;a only; from 1928 to date, Louisiana and Fllorida. 

' Source: Agriculture Yearbook, U. S. Department of Agriculture, 1924, p. 802, for the ye&ts 1870 to 1921, 
inclusive. Agricultural Statistics, U. S. Department of Agriculture, 1938. p. 124, for the years 1922 to 1936, 
inclusive. Sugar shipments to United States are given in terms of raw sugar and are on a fiscal-year basis 
for comparability with domestic production. This series is the sum of sugar "brought in from insular 
possessions" and "net imports of sugar." These shipments arc chiefly cane sugar; beet sugar has never 
exceeded one-half of 1 percent of the total. 



CONCENTKATION OF ECONOMIC POWER 
Production and imports of sugar, 1870-1937 — Continued 



241 



Year 


Beet sugar 
production in 

contineutal 
United States 


Cane sugar 
production in 
continental 

United States 


Sugar ship- 
ments to 
continental 
United States 


1926 ... 


Short tons 
960, 000 
1, 170, 000 
1,135,000 
1, 089, 000 
1, 293, 000 
1, 237, 000 
1, 452; 000 
1, 757, 000 
1,2J1.000 
1. 268, 000 
1, 395, 000 
1, 374, 000 


Short tons 
48, 000 
72, 000 
136, 000 
218, 000 
215, 000 
184, 000 
265, 000 
250, 000 
267, 000 
383, 000 
437, 000 
460, 000 


Short tons 
5, 658, 000 


1927 - - 


5, 467, 000 




e, 091, 000 


1929 


5, 201, 000 


1930 . .. 


5, 020, 000 


1931 - 


5, 133, 000 




4, 786, 000 


1933 . 


4, 591, 000 


1934 - -■- 


5. 083. 000 


1935 - 


5, 059, 000 


1936 


4, 843, 000 


1937 









Exhibit No. 78 

[Chart based on following statistical data appears in text on p. 144] 

Textile fiber consumption by United States manufacturers 1870-1937 



Year 


Total rayon 
fiber con- 
sumption 
(pounds) ' 


Cotton 
(bales) 2 


Net raw silk 
■ imports 
(pounds) 3 


Wool con- 
sumption 
(pounds) < 


1870 . . . -. 




800, 000 
1, 000, 000 
1,100,000 
1,100,000 
1, 200, 000 
1,100,000 
1, 300, 000 
1, 300, 000 
1,500,000 
1,500,000 
1,500,000 
1,900,000 
1, 800, 000 
2, 000, 000 
1,800,000 
1,700,000 


700, 000 
1, 300, 000 
1,200,000 
800, 000 
800, 000 
1, 300, 000 
1,200,000 
1, 000, 000 
1,600,000 
2, 300, 000 
2,600,000 
2, 600, 000 
3, 100, 000 
3, 300, 000 
3, 400, 000 
3, 900, 000 


214, 400, 000 


1871 




245, 400, 000 


1872.... _ 




262, 100, 000 


1873 






1874 




217, 800, 000 








1876 




229, 000, 000 









1878 




238 500 000 


1879 , - 




278, 200, 000 


1880 






1881 




292, 500, 000 


1882 




338 700 (JbO 


1883.... -. 




364, 000. 000 


1884 




367, 4(K). 000 
403,500.000 


1885 






1 Source: Rayon Organon, Special Supplement, Textile Kcononiics Bureau, Inc., January 1938, p. 16* 
Domestic consumption of rayon fiber includes rayon filament yarn and rayon staple fiber. Domestic 
consumption is calculated as the sum of domestic shipments by American producers plus yarn imports for 
consumption. 

' Source: Cotton Production and Distribution, Bureau of the Census, U. S. Department of Commerce, 
Bull. 167, p. 58, for the years, 1870 to 1904. inclusive; ibid.. Bull. 174. p. 42, for the years, 1905 to 1937, inclu- 
sive. The 1938 figure is unpublished. Mill consumption in the United States of all growths of cotton. 
Statistics from 1870 to 1904, inclusive, are in bales of 500 pounds and include linters; statistics from 1905 to 
1938, inclusive, are in running bales and exclude linters. As published, the annual figures are for cotton- 
years beginning in September. They are presented here as of the year the cotton year ends, i. e., September 
1870-August 1871 is given as 1871. ' The Bureau of the Census has collected these figures since 1905. They 
obtained figures from publications of the Department of Agriculture for the years 1870 to 1895, and from 
reports of Latham, Alexander & Co., for the years 1896 to 1904. 

3 Source: Foreign Connnercc and Navigation of the United States, Bureau of Foreign and Domestic 
Commerce, U. S. Department of Commerce, 1870 to 1937. Net raw-silk imports are the difference between 
general imports and foreign exports. Figures for general imports have not been published since 1933 and 
"imports for consumption" have been used for this series since that year. Waste, cocoons, silk worms, and 
eggs of silk worms are excluded. Published figures prior to 1918 are for fiscal years. The entire series pre- 
sented here is on a calendar-year basis. Although these are not manufacturers' consumption figures, they 
may be used as such because of the immediacy with which imports are delivered to manufacturers and the 
relatively small stocks of silk usually carried. 

< Source: Agriculture Yearbook, U. S. Department of Agriculture, 1923, p. 1001, for the years 1870 to 1917, 
inclusTve. Raw Wool Consumption Report, Bureau of the Census, U, S. Department of Commerce, 
annual reports, for the years 1918 to 1936, inclusive. The 1937 figure is preliminary and unpublished. The 
series from 1870 to 1917, inclu.sive, is "apparent wool consumption" and is the sum of domestic production 
and the excess of imports over all exports. The figures are not on any one comparable base but are roughly 
comparable to "greasy shorn" although some fleece and scoured wool are included and the greasy wool 
varies in the amount of grease by years and by origin of the wool. The figures, therefore, although not 
strictly comparable, represent the general trend from 1870 to 1917, inclusive. Mill consumption figures for 
the years 1918 to 1937, inclusive, are given on a greasy -shorn basis in order that they may be more nearly 
comparable with the earlier series. 



242 cnNCENTKATlOX OF KCONOMIC POWER 

Textile fiber conaum-piion by United Stales mannjaclvrers 1870-1937 — Continued 



Year 


Total rayon 
fiber con- 
sumption 
(pounds) 


Cotton 
(bales) 


Net raw silk 
imports 
(pound?) 


Wool con- 
sumption 
(pounds) 


ifige . .^ 




2, 100, 000 
2,100,000 
2, 200, 000 
2,300.000 
2, 500. 000 
2. 600. 000 
2. 800, 000 
2. 400. 000 
2, 300. 000 
3.000.000 
2, 600. 000 
2. 800, 000 
3. 500, 000 
3. 700, 000 
3.700.000 
3. 600, 000 
4, 100, 000 
4, 200, 000 
4, 000, 000 
4. 300. 000 
4, 900, 000 
5,000,000 

4, 500, 000 

5, 100, 000 
4, 600, 000 

4, 600. 000 
5, 100, 000 

6, 600, 000 
5, 600, 000 
6, 600, OfJO 
6, 400. 000 
6,800.000 
6. COO, 000 

5, 800, 000 

6, 400, 000 

4, 600, 000 
5, 900, 000 
6, 700, 000 

5, 700, 000 

6, 200, 000 

6. 500, 000 

7, 200, 000 
0, 800, 000 
7, 100, 000 
C, 100. 000 
5. 300. 000 
4, 900, 000 
6, 100, 000 
6. 700, 000 
6,400,000 
6, 400. 000 
8,000.000 
5,700,000 


4. 800, 000 
4, 800, 000 

5, 400, 000 
5, 800, 000 
4, 600. 000 
7, 100, 000 
7, 800, 000 
4, 400, 000 
7, 800. 000 
9, 100, 000 
4.900,000 

10.000.000 
8, 400, 000 
11,700,000 
8, 100. 000 
12,200.000 
13,000.000 
11,500.000 
16,400,000 
15,400,000 
16,700,000 
15,600,000 
18, 600, 000 
22, 100, 000 
21,600,000 
20. 700. 000 
24, 700, 000 
27,800.000 
25.500.000 
30.800.000 
32, 000, 000 
30, 000, 000 
32, 300, 000 
44, 300, 000 
2D, 300. 000. 
44,>A'0,000 

,'.ii, ;oo,ooo 

49,100.000 
50. 51X1, 000 

63, 100, 000 
05, COO, 000 
72, 700, 000 
74. 700, 000 
85, 900. 000 
72, 300. 000 
82, 000, 000 
71,300,000 
64,600,000 
53,500,000 

64, 200, 000 
58, 100, 000 
55,200.000 

• 48, 700, 000 


422,000.000 


J8g7 




385. 100, OOO 






374,100,000 






389, 500, 000 


1890 




381,700,000 


]891 . . 




421,500,000 






453, 200, 000 






453, 300, 000 


1894 




436, 600, 000 


5895 




,534, 000, 000 






417,300.000 






612. SOO. 000 


1898 




361,900.000 


1899 




361,100,000 






425. 100, 000 






424, 000. 000 


1902 




489. 000. 000 


1903 




457, 400, 000 






478, 000, 000 


1905 




538, 000, 000 


1906 




491,000,000 






483, 400, 000 






446, 500. 000 


1Q09 




G39, 100, 000 


1910 




492. 400. 000 




2, 100, 000 

2, 900, 000 

4, 000, 000 

6, 200, 000 

6, 600, 000 

6, 600, 000 

6. 800, 000 

6. 000, 000 

9:300,000 

8,700,000 

19, 800, 000 

24, 700, 000 

32, 600, 000 

42. 200. 000 

58, 300, 000 

CO, COO, 00.0 

100, 100,0' 

100,600,000 

133, 400. 000 

118.800,000 

159, 000, 000 

156,300.000 

217, 300, 000 

197, 200, 000 

258,700.000 

322.600.000 

301, 500, 000 

« 275, 000, 000 


471.000,000 


1912 


540, 300, 000 


1913 ^ 


443, SOO, 000 




540, 000, 000 


1916 -- 

1916 


078, lOil, 000 
725. 100, 000 


1917 


694, 900. 000 


1918 


715,000,000 


1919 


627, 600. 000 


1920 


580,200,000 


1921 


658,100.000 


1922 


770, 500, 000 


1923 


755, 300, 000 


1924 


044, 700, 000 


1925 


659. 70O. 000 


1926 


644. 600. 000 


1927 

1928 


681.800,000 
650, 000, 000 


1929 


712,100,000 


1930 


533, 500, 000 


1931 


648. 400, 000 


1932 


498, 400, 000 


1933 


673, 000, 000 


1934. 


470, 100, 000 


19,35 


855, 000, 000 


1936 


709, 800, 000 




675,100,000 




•498.200,000 







Estimated on basis of first 10 mouths of the year. 



CON'CKNTKATION OF ECONOMIC POWER 



243 



Exhibit No. 79 

[Chart based ou following statistical data appears iu text on p. 145] 

Percentage dislrihxdion of gainfully occupied persons 16 years of age and over 



Occupation group 



1930 



Agriculture and allied occupations 

Domestic and personal service 

Mining - - -.- 

Manufacturing and mechanical industries... 

Trade and transportation 

Clerical service 

Public servicen. e. c 

Professional service 



85.9 
95.0 

'i-j'.Z 
100.0 



48.1 
56.9 
58.5 
83.3 
94.0 
90.0 
96.7 
100.0 



41.2 
50.9 
52.7 
79.0 
92.6 



35.9 
45.9 
48.0 
75.5 
91.8 
94.6 
95.6 
100.0 



30.3 
40.9 
43.5 
72.1 
89.5 
94.1 
95.2 
100.0 



25.8 
34.6 
37.3 
67.8 
85.8 
93.0 
'.U. 6 
100.0 



21.3 
32.(5 
34. <} 
63.2 
33.9 
92.1 
93.5 
100.0 



' Reproduced from a chart appearing in The Federal Chart Book, prepared by the Central Statistical 
Board and the National Resources Committee, 1938, p. 17. The chart is adapted from one prepared by 
Dr. Ralph Q. Hurlin and Dr. Meredith B. Givens and published in Recent '^ucial Trends in the United 
States. It is reproduced by permission of the publishers, McOraw-Hill Book Co. Basic data are from tha 
decennial population censuses. For purposes of comparability, Drs. Hurlin and Givens reclassified soma 
data and introduced certain estimates. Corrections were also made to allov,- for the probable overenumera- 
tion of women and children in agriculture in 1910 and for the probable underenumeration of farm lab'jrers 
in 1920. The term agriculture as here used includes lumbering and fishing. 



Exhibit No. 80 

[Chart based on following statistical data appears iu text on p. 146] 

National income produced, 1919-37, by economic divisions 



Year 


Producing, 
handling, and 
service divi- 
sions 


Producing 

division 


Handling 
division 


Service 
division 


1919 

1920 


$67, 329, 000, 000 
68,108,000,000 
50,680,000,000 
58, 633, 000, 000 
68, 000, 000, 000 
67,893,000,000 
72,720,000,000 
74, 879, 000, 000 
73,741,000,000 
77, 602, 000, 000 
81,129,000,000 
68, 301, 000, 000 
53.822,000,000 
40,015,000,000 
42, 257, 000, 000 
50, 052, 000, 000 
55,184,000,000 
63,465,000,000 
69,817,000,000 


$31,599,000,000 
31.423,000,000 
18, 945, 000, 000 
22, 742, 000, 000 
28,330,000,000 
27, 306, 000, 000 
29,531,000,000 
29, 907, 000, 000 
28,7.57,000,000 
30,031,000,000 
31,634,000,000 
23,973.000,000 
15,812,000,000 
9, 519, 000, 000 
12, 251, 000, 000 
15. 975, 000, 000 
18, 793, 000, 000 
22, 577. 000, 000 
25, 898, 000, 000 


$17,731,000,000 
17,639,000,000 
13,517,1X10,000 
15,820,000.000 
17, 980, 000, 000 

17, 096, 000, 000 

18, 805, 000, 000 
19,331,000,000 
18,895,000,000 
19.660,000,000 
20,309,000,000 
17, 416, 000, 000 
14, 318, 000, 000 
10,564,000,000 
11,000,000,000 
12,371,000,000 

13, 237, 000, 000 

14, 647, 000, 000 
15,759,000,000 


$17,999,000,000 
19,046.000,000 
18, 218, OOO, mX) 
20,071,000.000 
21, 684, 000, 000 
22, 891, 000, 000 
24, 384, 000, OOO 
25,641,000,000 
26, 089, 000, 000 
27,911,000,000 
29,186,000,000 
20.912,000,000 
23,092,000,000 
19,932,000,000 
19,006,000,000 
21,706,000,000 
23,154,000,000 
26,241,000,000 
28,160,000,000 


1921 


1922 


1923 


1924 


1925 


1926 


1927 

1928 


1929 


1930 


1931 


1932 


1933 


1934 


1935 . . 


1936 

1937 



I Source: Income in the United States. 1929-37, Bureau of Foreign and Domestic Commerce, 1938. Na- 
tional Income and Capital Formation, 1919-35, Simon Kuznets, National Bureau of Economic Research, 



The Department of Commerce estimates were used for the years 1029 to 1937, inclusive. For years prior 
to 1929 the Department of Commerce estimates were extrapolated on the basis of the trend of the estimates 
of the National Bureau of Economic Research. In order to make the two sets of estimates comparable, 
savings of government, imputed rent, and special adjustments of inventory valuations and of depreciation 
and depletion charges were eliminated from the estimates of the National Bureau. As a result of the^e 
adjustments, the 2 sets of figures in 1929 were very nearly the same. 



244 CONCENTRATION OF P:CONOiIIC POAVP^R 

Exhibit No. 81 

[Chart based on following slatistical data appears in text on p. 146] 

National income produced, 1919-37, commodity -producing division ' 



Year 


Manufac- 
turing 


Agriculture 


Construction 


Mining 


1919 


$16,901,000,000 
17, 627, 000, 000 
9,715,000,000 
13,315.000,000 
16. 742, 000. 000 

15, 266. 000, OCO 

16, 713, 000, 000 
17, 194, 000, 000 
16, 633, 000. 000 
17,771,000,000 
19, 310, 000, 000 
14, 205, 000, 000 

9, 620, 000, 000 
5,621,000,000 
7,735,000,000 
9, 950, 000, 000 
11,802.000,000 
14, 261, 000, 000 
16,744,000,000 


$11,286,000,000 
9,026,000,000 

6, 254, 000, 000 
5,854,000,000 
6.720,000,000 

7, 357, 000, 000 
7, 803, 000, 000 
7,326,000,000 
7,231,000,000 
7,314,000,000 
7, 263, 000, 000 
5.681,000,000 
3, 706, 000, 000 
2, 442, 000, 000 
3,316,000,000 
4, 388, 000, 000 
5,185,000,000 
5,883,000,000 
6,223,000,000 


$1,723,000,000 

2, 262, 000, 000 

1,664,000,000 

2,116,000,000 

2,868,000,000 

2, 993. 000, 000 

3,139,000,000 

3,227,000,000 

3, 165, 000, 000 

3.313,000,000 

3, 272, 000, 000 

2,850,000,000 

1,799,000,000 

978, 000, 000 

666, 000, 000 

726,000,000 

852, 000, 000 

1,221,000,000 

1,475,000,000 


$1,689,000,000 


1920 


2, .508, 000, 000 


1921 

1922 - - — 

1923 - 

1924 . . 


1,312,000,000 
1, 457, 000, (KK) 
2,000.000,000 
1,690,000,000 


1925 -- -, 


1,876,000,000 
2,160,000,000 


1927 


1,728,000,000 


1928 - - 


1, 633, 000, 000 




1,789,000,000 


1930 


1,237,000,000 


1931 ' 


687,000,000 




478, 000, 000 




.534,000,000 


1934 


911,000,000 


1935 


954, 000, 000 




1,212,000,000 


1937 


1, 456, 000, 000 







1 Source: Income in the United States, 1929-37, Bureau of Foreign and Domestic Commerce, 1938. Na- 
tional Income and Capital Formation, 1919-35, Simon Kuznets, National Bureau of Economic Research, 
1938. 

The Department of Commerce estimates were used for the years 1929 to 1937, inclusive. For years prior 
to 1929 the Department of Commerce estimates were extrapolated on the basis of the trend of the estimates 
of the National Bureau of Economic Research. In order to make the 2 sets of estimates comparable, special 
adjustments of inventory valuations and of depreciation and depletion charges were eliminated from the 
estimates of the National Bureau. As a result of these adjustments, the 2 sets of figures in 1929 were very 
nearly the same. 



Exhibit No. 82 

(Chart based on following statistical data appears in text on p. 147] 
National income produced, 1919-37, commodity handling division 



1919 

1920 

1921 

1922 

1923 

1924 

1925 

1926 

1927 



$11,149,000,000 
9, 523, 000, 000 
6,795,000,000 
8, 974, 000, 000 
10, 161, 000, 000 
9, 885, 000, 000 
10, 472, 000, 000 
10,637,000,000 
10, 331, 000, 000 
10,811,000,000 



Transporta- 
tion and 

other pubHc 
utilities 



582, 000, 000 
116,000,000 
722,000,000 
846, 000, 000 
825, 000, 000 
811,000,000 
333, 000, 000 
694, 000, 000 
564, 000, 000 
849, eoO, 000 



1929 
1930 
1931. 
1932 
1933 
1934 
1935 
1936 
1937 



$10, 955, 000, 000 
9, 108, 000, 000 
7,330,000,000 
5, 183, 000, 000 
5, 815, 000, 000 
6, 852, 000, 000 
7, 362, 000, 000 
7, 962, 000, 000 
8, 693, 000, 000 



Transporta- 
tion and 

other public 
utilities 



354,000,000 
308,000,000 
988, 000, 000 
381, 000, 000 
18.5,000,000 
519, 000, 000 
875, 000, 000 
685,000,000 
066, 000, 000 



1 Source: Income in the United States, 1929-37, Bureau of Foreign and Domestic Commerce, 1938. Na- 
tional Income and Capital Formation, 1919-35, Simon Kuznets, National Bureau of Economic Research, 
1938. 

The Department of Commerce estimates were used for the years 1929 to 1937, inclusive. For years prior 
to 1929 the Department of Commerce estimates were extrapolated on the basis of the trend of the estimates 
of the National Bureau of Economic Re.search. In order to make the 2 sets of estimates comparable, special 
adjustments of inventory valuations and of depreciation and depletion charges were eliminated from the 
estimates of the National Bureau. As a result of these adjustments, the 2 sets of flgflres in 1929 were very 
nearly the same. 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 83 
[Chart based on following statistical data appears in text on p. 148) 
National income prodnced, 1919-37, service division ' 



245 



Year 


Service 


Finance 


Government 


Miscellaneous 


1919 

1920 ■ 


$5, 556, 000, 000 
6, 074, 000, 000 
5,521,000,000 
6. 649, 000, 000 
7, 168, 000, 000 
7, 602. 000, 000 
8, 304, 000. 000 
8,807,000,000 

8, 655, 000, 000 

9, 238, 000. 000 
9, 722, 000, 000 
8, 869, 000. 000 
7, 489. 000. 000 
5, 692, 000, COO 

5, 378, 000, 000 
6, 196. 000, 000 

6, 766, 000, 000 
7, 524, 000, 000 
8, 322, 000, 000 


$4, 957. 000, 000 

5, 251. 000, 000 
5, 260. 000. 000 
5,730,000,000 

6, 227. 000, 000 
6,761,000.000 
7. 102. 000. 000 
7,408,000,000 

7, 833, 000, 000 
8.601,000,000 
8.835,000.000 
7, 781, 000, 000 
6, 364. 000. 000 
5,123,000.000 
4, 575, 000, 000 

4, 974, 000. 000 
5.410,000,000 

5, 944, OOft 000 
6,514,000,000 


.$4,841,000,000 
4,931,000,000 
5,111.000,000 
5,167,000,000 
5,330,000,000 
5, 487, 000, 000 
5,637,000,000 
5,832.000,000 
6, 062. 000, 000 
6, 273, 000, 000 
6, 540, 000, 000 
6.720,000,000 
6,847.000,000 

6. 727, 000, 000 
6, 907, 000, 000 

7. 952, 000, 000 

8. 254, 000, 000 
10, 077, 000, 000 
10,368,000,000 


$2,645,000,000 
2.790,000,000 




2, 326. 000, 000 




2. 525, 000, 000 


1923 — - 

1924 


2,959.000.000 
3,041.000.000 




3,341.000,000 




3,594,000,000 


1927 

1928 . 


3,539,000,000 
3, 799, 000, 000 


1929 V 


4, 089, 000, 000 




3.542,000,000 


1931 


2,992,000,000 




2, 390, 000, 000 


1933 . .. 


2, 146, 000, 000 




2,584,000,000 


1935, - 

1936. .- 

1937 -- - 


2,724,000,000 
2,696,000,000 
2, 956, 000, 000 







1 Source: Income in the United States, 1929-37, Bureau of Foreign and Domestic Commerce, 1938, 
National Income and Capital Formation, 1919-35, Simon Kuznets, National Bureau of Economic Research. 
1938. 

The Department of Commerce estimates were used for the years 1929 to 1937, inclusive. For years prior 
to 1929, the Department of Commerce estimates were extrapolated on the basis of the trend of the estimate 
of the National Bureau of Economic Research. In order to make the 2 sets of estimates comparable, savings 
of Government, imputed rent, and special adjustments of inventory valuations and of depreciation and 
depletion charges were eliminated from the estimates of the National Bureau. As a result of these adjust- 
ments, the 2 sets of figures in 1929 were very nearly the same. 



"Exhibit No. 84" appears in text on p. 149 



Exhibit No. 85 

[Chart based on following statistical data appears in text on p. 160] 
Applications and patents, 1836 to 1937 » 



Year 


Applica- 
tions filed 


Patents 
issued 


Year 


Applica- 
tions filed 


Patents 
issued 


1836 


MOO 

3590 

3 600 

3 700 

765 

847 

761 

819 

1,046 

1,246 

1,272 

• 1,531 

1,628 

1,955 

2,1S3 

2,258 

2, 639 

2,673 

3,324 

4.435 

4,960 

4,771 

5,364 


'109 

436 

,521 

417 

459 

496 

501 

519 

497 

503 

638 

669 

663 

1,067 

993 

872 

1,019 

961 

1,844 

2,013 

2,505 

2, 896 

3,695 


1859 . 


6.225 
7,663 
4,643 
5,038 
6,014 
6,972 
10, 664 
15, 269 
21,276 
20,445 
19, 271 
19, 171 
19, 472 
18, 246 
20,414 
21,602 
21,638 
21.425 
20.308 
20,260 
20.069 
23,012 
26,059 


4,604 




1860 




1838 


1<^61 


3 329 


1839 


1862 


3 632 


1840 


1863 




1841 


1864 




1842 


1865 


6 616 


1843 


1866 


9 468 


1844 


1867 


13 026 


1845 


1868 


13, 410 


1846 


1869 




1847 


1870 


13 333 


1848 


1871 


' 13 056 


1849 


1872 


13, 613 


1850 


1873 . . . 




1851 . - . - 


1874 


13 699 


1852 


1875 


14 837 


1853 


1876.... 

1877 


15 595 


1854 


14, 187 


1855 


1878 




1856 


1879 


13 213 


1857 


1880 


13 947 


1858 


1881 


16,584 



' Source: United States Patent Office, U. S. Department of Commerc«\. 

2 The figures for 1836 are for the period July 4 to Dec. 31, subsequent to the passage of the patent law on 
July 4. 1836. 

3 Estimated. 



246 



CO.NCKiN rUA 1 1(>.\ OF i;( < ).\( ).M K ' ToWKK 
Applications and patents, 18S6 to 1937 — Continued 



Year 


Applica- 
tions filed 


Patents 
issued 


Year 


Applica- 
tions filed 


Patents 
issued 


1882 


31,522 
34, 576 
35,600 
35,717 

35,' 613 
35, 797 
40. 575 
41,048 
40, 552 
40,753 
38, 473 
38, 439 
40,680 
43,982 
47,905 
35,842 
41,443 
41,980 
46, 449 
49, 641 
50, 213 
52, 143 
54, 971 
56,482 
58,762 
61, 475 
05, 839 


19, 267 
22,383 
20,413 

24, 233 
22,508 
21,477 
20,506 
24,158 
26, 292 
23,244 
23,559 
23,769 
20,867 
22,057 
23,373 
23,794 
22, 267 

25, 527 

26, 499 
27, 373 

31,' 699 
30, 934 
30,399 
31,965 

36, 620 
33,682 

37, 421 


1910 


64,629 

69. 121 
70, 970 
70,367 
70,404 
70, 069 
71,033 
70, 373 
59, 615 
80,400 
86,815 
93,328 
88,930 
80,653 
80,888 
84,627 
86, 116 

92. 122 
92, 725 
94, 738 
94,203 
84,423 
71,864 
60,633 
61, 572 
64,073 
69, 221 
72, 592 


35,930 


1883 


1911 .... 


34,084 




1912 


37, 731 


1885 


1913 


35,788 


1886 


1914 


41,850 




1915 


44 934 


,ooi " ■ ' 


1916 


45,927 


1889 


1917 


42,760 


1800 


1918 


39,941 




1919 


38,598 




1920 


39, 882 


1893 


1921 


41,401 




1922 


40,297 




1923 


4" 1,787 


1896 - - -. 


1924 


45,500 


1897 


1925 


49,540 


1S98 


1926 


47 627 




1927 






1928 


45,899 


1901 


1929 . . 


48,565 




1930 


48, 322 




1931 


55, 103 


1904 


1932 


56, 856 




1933 


51,563 




1934 ^ 


47,753 


1907 


1935 


44,944 


1908 


1936 


44,820 




1937 


43,271 









Exhibit No. 86 

[Chart based on following statistical data appears in text on p. 151] 
Output of commodities ' 





Percent 
durable 
commodi- 
ties 


Percent 

nondurable 

conunodi- 

ties 




Percent 
durable 
commodi- 
ties 


Percent 
nondurable 
commodi- 
ties 


1879 


31 
35 
36 
36 
37 


69 
65 
64 
64 
63 


1914 


37 
38 
41 
44 
27 


63 


1889 


1919 


62 


1899 


1925 


50 




1929 


56 


1909 


1933 


73 









' Source: Commodity Flow and Capital Formation 1919-1935, Simon Kuznets, National Bureau of Eco- 
nomic Research, for the years 1919 to 1933, inclusive. Figures for years piror to 1919 were provided by tb« 
courtesy of Dr. Wesley C. Mitchell, Director of Research of the National Bureau of Economic Research. 

Percentages are based on dollar figures at current manufacturers' prices. Durable commodities includ* 
construction materials and consumer durable goods. 



CONCENTRATION OF ECONOMIC POWER 
Exhibit No. 87 

[Chart based on following statistical data appears in text on p. 153) 

Production of durable and nondurable manufactured -products, 1929-S8 

[Monthly index numbers, 1929=100] 



247 





Nondur- 
able 
products 


Durable 
products 




Nondur- 
able 
products 


Durable 
products 


1929 


101.2 
99.7 
100.3 
102.0 
101.4 
102.5 
100.5 
101.4 
101.0 
101.2 
96.6 
92.2 

93.6 
92.2 
90.8 
91.1 
88.2 
84.9 
83.8 
81.4 
84.5 
84.7 
83.8 
81.8 

82.0 
85.7 
86.4 

88^ 6 
86.0 
88.4 
86.8 
86.8 
82.0 
80.4 
81.7 

81.8 
79.3 
76,6 
71.3 

6a 4 
69.4 
75.8 
82.9 
81.8 
77.3 
76.7 

75.3 
73.6 
69.9 
78.2 
89.7 
101.2 
102.7 
93.8 
89.2 
81.5 
80.9 
77.3 


100.1 
99.2 
101.5 
102.4 
105.8 

110^6 
105. 2 
102.7 
98.1 

75! 6 

82.4 
88.3 
84.9 
84.6 
82.2 
78.9 
70.4 
6fi.7 
63.7 
59.2 
57.2 
54.7 

56.4 
57.6 
59 2 
58.1 
56.4 
51.0 
47.8 
42.3 
37.7 
35.7 
37.5 
38 3 

35.3 
32.8 
29.2 
28.7 
27.8 
27.1 
23.9 
21.1 
24.1 
25.7 
26.9 
28^ 

29.1 
26.6 
22.1 
29.2 
38.0 
52.1 
66.9 
58.1 
48.9 
43.8 
35.3 
44.0 


1934 


82.7 
83.8 
83.8 
85.1 
84.5 
79.9 
80.9 
82.0 
78.3 
84.4 
84.2 
89.5 

88.8 
86.4 
84.9 
85.7 
86.6 
85.1 
86.0 
86.4 
87.9 
90.8 
89.2 
92.4 

91.2 

87.' 7 
89.5 
89.2 
92.1 
06.1 
fi7.3 
97.5 
95.9 
100.1 
107.7 

100.5 
101.6 
102.7 
102.3 
99.6 
98.8 
92.7 
94.3 
91.8 
86.0 
80.9 
81.2 

79.9 
80.1 
79.9 
78.8 
79.6 
81.7 
87.3 
92.2 
92.1 
90.5 










March '. 






April ^.... 

May - - 


April 


56 6 


May 


58 9 


June 


June 


58 9 


July 


Juiy 










September 


September 


35 5 


October 


October 


34 9 














1930 
January. . 


1935 
January 


60 9 


February. 


February 


61 4 


March 


March 


59 5 


April 


April 




May- 


May 


53 7 


June . .. 


June 


66 6 


July 


July 


58 3 




















November 


November 


73 3 


December 




77 4 


1931 


1936 
January 

February 




February . 


64 9 


March 


March 


67 6 


April 


April 


78 


iK:::::::::::::::::::::::: 


May 


80.8 


June - 


June 


84.0 


July . . 


July 


87.9 


August 




86 9 






87.4 


October 




89.9 


November... 


November 


92. « 


December 


December 


96.0 


1932 


1937 


92.7 






93.5 


March 


March 


93.0 


April 


April 


96.9 


Sfay 


May 


99 2 






92.9 


July 


July 


100.6 






104.1 








October 


October 


83 5 


November 




61 5 






49.8 


1933 
January . . . ■. 


1938 
January 


46.7 


February 


February 


44.9 




March 


44.4 


April 


April 


43.5 


May 


May .... 


41.7 


June 


June 


41.5 


July 


July 


48.1 


August 




52 9 






56.7 























' Source: The Board of Governors of the Federal Reserve System, Index originally computed on a 
1923-25 base but converted here to a 1929 base. 

Data are based on daily average physical volume and are adjusted for seasonal variation. Durable goods 
Include iron and steel, automobiles, lumber, shipbuilding, locomotives, nonferrous metals, cement, polished 
plate glass, and coke; nondurable goods include textiles, leather and products, foods, tobacco products, 
paper and printing, petroleum refining, and automobile tires and tubes. 

124491— 39— pt. 1 17 



248 



CONCENTRATION OF ECONOMIC POWER 

Exhibit No. 88 

IChart based on following statistical data appears in text on p. 154 | 
United States foreign trade in merchandise 









Ratio of 








Ratio of 




Total 


General 


e.xports 




Total 


General 


exports 




exports 1 


imports ' 


to total 




e.xports ' 


imports ' 


to total 


Year 


(millions 


(millions 


produc- 


Year 


(millions 


(millions 


produc- 




of 


of 


tion of 




of 


of 


tion of 




dollars) 


dollars) 


movable 
goods • 




dollars) 


dollars) 


movable 
goods 5 


1919 


7, 920. 4 


3, 904. 4 


16.0 


1929 


5, 241. 


4, 399. 4 


9.8 


1920 


8,228.0 
4, 485. 
3,831.8 
4, 167. 5 


5, 278. 5 

2, 509. 1 
3,112.7 

3, 792. 1 




1930 


3, 843. 2 
% 424. 3 
1,611.0 
1, 675. 


3, 060. 9 
2, 090. 6 
1, 322. 8 
1. 449. 6 






12.8 


1931. 


7.4 




1932 




1923 


8.9 


1933 


6.0 


1924 


4,591.0 
4, 909. 8 
4, 808. 7 
4, 8fi5. 4 


3,610.0 
4, 226. 6 
4, 430. 9 
4. 184. 7 


io.'i 

9.9 


1934 


2, 132. 8 
2. 282. 9 

2, 456. 

3, 349. 2 


1, 655. 1 
2,047.5 

2, 422. 6 

3, 083. 7 






1935 


6.8 




1936 




1927 


1937 


7.5 




5, 128. 4 


4,091.4 



















1 Source: Foreign Commerce and Navigation of the United States, Bureau of Foreign and Domestic Com- 
merce. U. S. Department of Commerce. Exports represent total exports of merchandise, including reex- 
ports of foreign merchandise. „ , _ . ^ 

! Source: Foreign Commerce and Navigation of the United States, Bureau of Foreign and Domestic Com- 
merce, U. S. Department of Commerce . General imports include merchandise entering into consumption 
channels immediatelv upon arrival in the United States and entries into bonded warehouses. 

> Source: Foreign trade of the United States, Bureau of Foreign and Domestic Commerce, U. S. De- 
partment of Commerce. Production of movable goods represents the sum of gross income from farm produc- 
tion, value added to materials by manufacture, value of mine products, and total railroad freight receipts. 



CONCENTRATION OF ECONOMIC POWER 



249 



Exhibit No. 89 

[Chart based on^following statistical data appears In text on p. 165H 

Wholesale prices, all commodities, 1801-1937^ 

[Index numbers 1026=100] 

Year: ^'■"'" 

1801. -- 111. 8 

1802 91.8 

1803 93.9 

1804 101. .5 

1805 104.2 

1806 -.-..- 102.2 

1807.... 96.0 

1808 93.9 

1809 98.7 

1810. --- 107.7 

1811. --- 104.9 

1812- 106.3 

1813 123. 6 

1814. 154.6 

1815... .- 121.5 

1816 103.5 

1817. -_ 104.2 

1818._-- 102.2 

1819. _.- 89.7 

1820 76.6 

1821 73.2 

1822 75:2 

1823. 71.8 

1824 - 71. 1 

1825.. 71.8 

1826-.-_-.i_- 71. 1 

1827 71.8 

1828 68.3 

182G--. - 67.6 

1830... 65. 6 

1831. 79.4 

1832...., 71. 1 

1833.- 70.4 

1834 65.6 

1835. 74 6 

1836. 83. 5 

1837 82. 8 

1838. 79.4 

1839... 83.5 

1840 71. 1 

1841 70.5 

1842 65.7 

1843 61. 8 

1844.-. 62. 1 

1845. -- 62.6 

1846--. . 64.8 

> Source: Bateau of Labor Statistics, U. S. Department of Labor. 

The index numbers from 1890 to 1936 are the regular weighted series of the Bureau of Labor Statistics, 
computed by the same method throughout and published currently. The number of price "series included 
ha? been changed from lime to time, and at present totals 7S4. The figures for years prior to 1890 are arith- 
metic averages of unweighted Index numbers of individual commodities, and are here converted to the 1928 
base in conformity with the Bureau's practice. 



Year: 


/-/ider 


Year: 


Index 


1847--- 


— - 64. 9 


1893.-.- 


53.4 


1848 


.:„ 61. 8 


1894 


..._ 47.9 


1849 


..-- 60. 1 


1895 


.— 48.8 


1850 


— . 62. 3 


1896 


46. 5 


1851 


.-- 64.5 


1897 


.-.. 46. 6 


1852 


--_ 62. 5 


1898 


— 48. 5 


1853 


• 66.4 


1899 


-... 52.2 


1854 


68. 8 


1900 


..._ 56. 1 


•1855 


68.9 


1901 


.... 55.3 


1856 


-.- 68.9 


1902 


--. 58. 9 


1857 


— 68. 5 


1903 


.— 59. 6 


1858 


— - 62.0 


1904 


59. 7 


1859 


.-_ 61.0 


1905 


— . 60. 1 


1860 


-- 60.9 


1906 


.-_ 618 
.— 6S!.2 


1861.-... 


— - 61.3 


1907 


1862 


— . 71.7 


1908 


— - 62.9 


1863 


.... 90.5 


1909 


.— 67. 6 


1864 


--- iiao 


1910 


— - 70.4 


1865 


— . 132.0 


1911 


— 64 9 


1866-.... • 


-.. 116. S 


1912 


--. 69. 1 


1867 


.-.- 104.9 


1913 


--. 69. 8 


1868 


97. 7 


1914 


--- 68. 1 


1869 


93. 5 


1915 

1916...-- 


- - 69. 5 


1870 


86. 7 


85. 5 


1871 


- 82. 8 


1917 

1918 


- - 117. 5 


1872 


84.5 


.-.. 131.3 


1873 


.— 83.7 


1919 


-.. 138.6 


1874 


81.0 


1920 


.... 164 4 


1875 


.-- 77.7 


1921 


-.- 97.6 


1876 


— 72.0 


1922 


-.. 96.7 


1877 


-.. 67. 5 


1923.-.. 


.... 100.6 


. 1873 


.... 61.7 


1924 


-- 98. 1 


1879 


-._ 58. 8 


1925 


— - 103.5 


1880 


.— 65. 1 


1926 


100.0 


1881 


— •- 64. 4 


1927 


95.4 


1882 


.-- 66. 1 


1928 


— 96.7 


1883 


._- 64 6 


1929 


--. 95.3 


1884 


60. 5 


1930 


.-.- 86.4 


1885 


56.6 


1931 


.— 73.0 


1886 


56.0 


1932 


.-. 64 8 


188C 


56.4 


1933 


-.. 65.9 


188S _ . 


- - 57.4 


1934 

1935 


.--- 74 9 


1889..... 


— . 57.4 


.-- 80.0 


1890 


— 56.2 


1936 


.... 80. 8 


1891 


— . 55.8 


1937 


.... 86.3 


1892—- 


-.. 52.2 







250 CONCENTRATION OF ECONOMIC POWER 

SUPPLEMENTAL DATA 

The following statement is printed at this point in connection with 
Mr. Henderson's testimony on p. 162: 

In preparing my estimates of unemployment, I have used the esti- 
mates of the National Industrial Conference Board for the total labor 
force. On the whole they seem the most reasonable. They pro- 
vide for an average annual increase of about 625,000 in the total 
labor force from 1929 to date. The estimate for November 1937 
came closer to the labor force indicated by the unemployment census 
than other current estimates. It was about 900,000 below the opti- 
mum figure of 54,474,000 indicated by the Unemployment Census. 

The methodology used by the National Industrial Conference Board 
is described in the following excerpts from its Conference Bulletin of 
July 30, 1938: 

The labor force, viewed as a reservoir of potential workers having gainful oc- 
cupations, must of necessity have an inertia with respect to its size and growth. 
That is to say, the number of persons available on call plus the number engaged 
in remunerative pursuits does not fluctuate with business swings. Each year 
there is an outflow of workers from the force through emigration, death, retire- 
ment, physical disability, and the like; but there is also an inflow through immi- 
gration, increased age of young people, termination of education, increasing 
remunerative occupations for women, and so forth. Underlying these flows in 
and out of the labor force are such basic factors as a changed standard of living, 
increased mechanization, population, age composition, and growth. 

In the past eight years the labor force of the country is estimated to have 
increased roundly 10 %. The Census of Occupations enumerated 48,830,000 gainful 
workers for April 1, 1930. By the middle of June, 1938, this total is estimated to 
have increased to 53,936,000. 

The estimated yearly growth during this interval was not uniform owing to the 
fact of unequal changes in the general population available for the labor force. 
During the years 1930 to 1937, inclusive, the average annual growth of the labor 
force averaged 621,000 persons. 

Such annual increases have had an appreciable effect on the total number of 
unemployed estimated. Thus, between September, 1929 and June, 1938 new 
workers in the labor force increased by 5,440,000 persons. 

Estimates of the size of the labor force were based upon determinable relations 
between the number of workers of difi'erent races, ages, and sexes and the number 
of persons in these groups in the total population constituting the general source of 
labor supply. The latest year for which data on these relations can be computed 
is 1930, when the censuses of occupations and of population furnished descriptive 
details of gainful workers and comparable details of the population. 

For subsequent years, estimates of the population could be computed for mortal- 
ity statistics and net immigration. The relation of workers in the labor force in 
1930 to available population by descriptive classes were applied to estimates of 
population for subsequent years to obtain first approximations to the number of 
workers in these years. These approximations were then corrected to allow for 
changes in school enrollment, the only additional factor which could reasonably be 
regarded as affecting the size of the economic labor force. 

This indirect statistical procedure for estimating the total number of persons 
in the labor force was necessary because there are virtually no figures on the new 
additions who have come of age nor on the number of withdrawals which might 
have been used to bring up to date the 1930 census enumeration of gainful workers. 



CONCENTRATION OF ECONOMIC POWER 



251 



The following tables are included at this point in connection with 
Mr. Henderson's testimony on pp. 162 and 167: 

I Extract from the Sl8tL«tical Abstract of the United States, 1937, p. 53] 

Persons 10 years of age and over — number in total -population and number gainfully 
occupied: By sex and age, 1930, continental United States 





Total 


Male 


Female 


Year and age 


Total 
number 
10 years 

of age 
and over 


Gainfully 
occupied 


Total 
number 
10 years 

of age 
and over 


Gainfully 
occupied 


Total 
number 
10 years 

of age 
and over 


Gainfully 
occupied 




Number 


Per- 
cent 


Number 


Per- 
cent 


Number 


Per- 
cent 


1930 


98,723,047 


48,829,920 


49.5 


49, 949, 798 


38, 077, 804 


76.2 


48, 773, 249 


10,762,116 


22.0 


10 to 13 years 


9, 622, 492 
2, 382, 385 
2, 295, 699 


235, 328 

157,660 

274, 130 

687,817 

891,024 

2,642,213 

7,147,053 

6, 255, 677 

5, 567, 327 

5, 619, 242 

4,881,298 

4, 276, 070 

3, 555, 091 

2, 640, 064 

1,9.50,628 

1,227,042 

642.902 

336, 023 

44, 431 


2.4 
6.6 
11.9 
24.8 
38.8 
55.3 
65.7 
63.6 
61.0 
61.0 
61.1 
60.7 
59.5 
56.8 
52.0 
44.3 
33.0 
17.5 
47.3 


4, 862, 291 
1,206,486 
1,154,648 
1,181,920 
1,167,150 
2, 264. 107 
5,336,815 
4,860,180 
4,661,786 
4, 679, 860 
4,136,469 
3,671,924 
3.131,645 
2, 425, 992 
1,941,508 
1,417,812 
991,647 
915,752 
51,816 


162,260 

110,839 

187, 643 

386,511 

577, 983 

1,599,768 

4, 799, 505 

4, 714, 266 

4,454,400 

4,571,641 

4, 036, .561 

3,569,094 

2, 996. 041 

2, 256, 771 

1,684,743 

1,072,900 

570, 233 

29.5, 616 

31,029 


3.3 

9.2 
16.3 
32.7 
49.9 
70.7 
89.9 
97.0 
97.6 
97.7 
97.6 
97.2 
95.7 
93.0 
86.8 
75 7 
57.5 
32.3 
69 9 


4, 760, 201 
1,176,899 
1,141,051 
1, 185, 396 
1,138,672 
2,329,172 

5, 533, 563 
4, 973, 428 
4, 558, 635 
4, 528, 785 
3,853,736 
3, 370. 355 
2, 844, 159 
2,219.685 
1,809,713 
1,352,793 

958, 357 
997,444 
42,206 


73,068 

46, 821 

86,487 

201,306 

313,041 

942,446 

2, 347, 648 

1,541,411 

1,112,927 

1,047,601 

844,737 

706,976 

659,050 

383,293 

265,786 

164, 142 

72, 669 

39,407 

13,402 


1.6 
4.0 




7.6 


16 years 


2,367,316 
2, 295, 822 

4. 593, 279 
10, 870. 378 

9, S33. 608 
9, 120, 421 
9, 208, 645 
7, 990, 195 
7, 042, 279 

5, 975, 804 
4. 645, 677 
3,751,221 
2, 770, 605 
1,950,004 
1,913,196 

94,022 


17.0 
27.6 


18 and 19 years 

20 to 24 years 

25 to 29 years 

30 to 34 years 


40.6 
42.4 
31.0 
24.4 
23.1 


40 to 44 years 

45 to 49 years . . . 


21.8 
21.0 


50 to 64 years 


19.7 


55 to 59 years 


17.8 


60 to 64 years 

65 to 69 years 

70 to 74 years 

75 years and over 


14.7 
11.4 
7.6 
4.0 
31.8 







Boarce: Bureau of the Census, Department of Commerce. 



Estimated number of persons in the bnited States, in each functional class, by sex, 
November 1937 » 

[Data for persons 16-74 years of agel 

Ettimatid total 

Class and sex TOTAL numbtr 

Population 93,063,000 

Persons employed or available for employment — 54, 474, 000 

Totally unemployed. 8, 928, 000 

Emergency workers 2, 055, 000 

Partly unemployed 5, 5.50, 000 

Part-time workers (not wanting more work) 1, 190, 000 

Fully employed 36,079,000 

111 or voluntarily idle 672,000 

Persons not available for employment 38, 589, 000 

'JTbe estimated totals for the unemployed classes and partly unemployed were obtainefl by dividing tha 
total number of voluntary registrations in each age-sex group by the corresponding percent of completeness 
of registration, as determined from the enumerative check, and by adding together the estimates for each 
age group thus obtained. The estimates for all other classes were made by multiplying the age-sex specific 
percentages of population in each functional class by the corresponding total population in the United States. 
The total population was estimated independently, and may be considered highly accurate. Both methods 
of estimating assume that the percentages within any specific age-sex group are the same in areas that do 
not have postal delivery service as In postal-delivery areas. 

Source: Final Report on Total and Partial Unemployment, 1937, vol. IV. 



252 CONCENTRATION OF ECONOMIC POWIIR 

Estimated number of persons in the United States, in each fvc'ional class, by sex 
November 1937 — Continued 

Estimated total 
MALE immber 

Population --- 46,704,000 

■ Persons employed or available for employment ' 39, 978, 000 

TotaUy unemployed 5, 761, 000 

Emergency workers 1, 657, 000 

Partly unemployed - 4, 058, 000 

Part-time workers (not wanting more work) 688, 000 

Fully employed -.. 27, 399, 000 

111 or voluntarily idle 415, 000 

Persons not available for employment _ 6, 726, 000 

FEMALE 

Population 46, 359, 000 

Persons employed or available for employment ' , 14,496,000 

Totally unemployed--- 3, 167, 000 

Emergency workers *~l. 398, 000 

Partly unemployed - 1, 492, 000 

Part-time workers (not wanting more work) 502, 000 

Fully employed 8, 680, 000 

111 or voluntarily idle 257, 000 

Persons not available for employment 31, 863, 000 



INDEX 

Page 

Agricultural production, index, 1901-36 28, 30, 204 

Agricultural self-employed, census of 162, 163 

Alaskan gold enterprises 102 

American capitalistic system, discussion of its characteristics and 

"change" 167, 168, 169 

Armament program 12 

Assets of large corporations, $5,000,000 and over, in 1935 106, 230 

Assets of large manufacturing corporations of $5,000,000 and over, in 

1935 --- 106, 107,231 

Automobiles, production, 1919-37 - 35, 36, 207 

Automobiles, etc., production, 1900-37 141, 237 

Biggers' census 160, 162 

Boer study 88 

Buffalo, N. Y., McGarry study _.., 88 

Business enterprises: 

Buffalo, McGarry study 88 

Chain-store systems 84 

Distribution of employees and employers by size of busitiess concern - . 97, 229 

Failure by years '1 87 

Filling stations 85 

Functional classification 116 

Horizontal growth 116 

Individual 115, 118 

Insurance against failure 92 

Organization and processes of operation of factors in 82, 83 

Pittsburgh, Boer study 88 

Relationship with others 118 

Retail stores 86 

Textile field . 90 

Vertical growth 116 

Business, census, classified, 1900-38 82,83, 84, 227 

Chain-store sales, volume and percentage, 1935 138 

Chain-store systems ^ 84 

Cigarettes, production, 1919-36 40, 210 

Cigars and cigarettes, employment and pay roll, index, 1923-38 51, 54, 221 

Cement: 

Employment and pay roUs, 1923-38 51, 52,219 

Portland, production and capacity of mills, 1910-37 34, 206 

Portland production for nine mills, 1925-38--- 121, 123, 233 

Coke industry 124 

Coke production for nine plants, 1925-38 124, 233 

Coal, bituminous, production, 1919-37 36, 37, 206 

Coal production, 1870-1937 142, 238 

Commodities, national income produced by, 1919-37 145, 146, 147, 244 

Commodities, output, 1879-1933 27,28, 151,201 

Competition, decHne of, its trend and effect-.- 170, 171 

Complaints issued by Federal Trade Commission 140, 141 

Concentrp,tion in industries 1 136, 137, 138 

Consolidations and mergers, historical development of 113 

Construction: 

Highway, etc., activity, 1915-37 120,121,232 

Railroads, etc., activity 1915-37 120, 121, 232 

Residential and nonresidential, private building activity in United 

States, 1915-38 120,231 

Residential units provided for in new nonfarm construction 32, 33, 205 

Values, 1919-36 . 31,32,205 

z 



II INDEX 

Corporations: I'asr* 

Assets.. 103, 104, 105, 106, 107,229,230,231 

Assets of large corporations, $5,000,000 and over, 1935 106, 230 

Assets of large manufacturing corporations of $5,000,000 and over in 

1935 106, 107,231 

Census, 1910-36 93, 228 

Consolidations and mergers, historical development of_: .... 113 

Growth of 93,228 

Importance of corporate activities by branches of industry, 1937 95, 96 

Legal form of 93 

Size by assets in 1935 103, 229 

Size by assets in 1935, excluding financial companies 104, 105, 230 

Tax structure, efifect of 94 

Costs of goods purchased by wage earners, etc., index, 1912-37 61 

Cotton, consumption by United States manufacturers, 1870-1937 39, 208 

Cotton, percentage exported : 175 

Cotton goods, employment and pay rolls, index, 1923-38 51, 53, 220 

Credit sales, volume 179 

Department store sales, index, 1919-38 41, 210 

Depression, losses in 12, 13, 16, 17, 18, 196 

Dividends lost in depression 15, 196 

Dividends, national income from, 1919-34 20, 197 

Durable goods 27, 151 

Durable goods, employment and pay rolls, index, 1923-38 46, 214 

Economic growth, necessity for 163, 164 

Economic stagnation, comment on 164 

Economic structure, character of 82, 83 

Employees and employers, distribution by size of business concern 97, 229 

Employment: 

Available labor, increase of 160, 161 

Cement, index, 1923-38 61, 52, 219 

Cigars and cigarettes, index, 1923-38 51, 53, 220 

Cotton goods, index, 1923-38 51, 53, 220 

Durable goods, index, 1923-38 . 46, 214 

Exports, effect on 166 

Gainfully, percentages and classification, 1870-1930... 144, 145, 243 

Hours, average in manufacturing industries, 1932-38 , 58, 223 

Hours per week, composite index, 1914-36 55, 222 

Iron and steel, index, 1923-38 46, 49, 214 

Locomotives, index, 1923-38 51, 218 

Lost in depression in nonagricultural occupations 12, 13, 196 

Man-hours, composite index, 1914-36 55, 222 

Manufacturing, composite index, 1923-38 45,213 

Nonagricultural, 1929-38 43,44,211 

Nondurable ^oods, index, 1923-38 49, 50, 216 

Relief and work programs, census 67, 68, 69, 224, 225 

Rubber tire and tube industry, index for 15 plants, 1923-36 126, 127, 234 

Sawmills, index, 1923-38 51, 52, 218 

Self-employed in agricultural pursuits, census of 163 

Survey of 144 

United States employees, classified census, 1933-38 68, 70, 225 

Unemployed, census and classification, 1937 63, 64, 224 

Woolen and worsted goods, index, 1923-38 51, 54, 221 

Exports, values, 191^37 152, 154, 248 

Exports, volume and effect on employment 166 

Factory migration 128 

Federal employees, census, 1933-38 . 68, 70, 225 

Federal Trade Commission, complaints issued by 140, 141 

Filling stations 85 

Flour production for nine mills, 1927-33 126, 234 

Freight-car loadings, index, 1919-38 42, 211 

Fuels, production, 1870-1937 142, 238 

Foreign trade 152, 153, 154 

Gainfully occupied persons, percentages and classifications, 1870-1930 144, 

145, 243 

Gas, natural, production, 1882-1937 142, 238 

Glass industry, subdivisions, classification, 1936 118, 119 

Gold enterprises in Alaska 102, 103 



INDEX III 

Page 

Government intervention in private industry _ 179 

Henderson, Leon, executive secretary, Temporary National Economic 

Committee 157, 183 

Housing. See Construction. 

Immigration, population increase attributable to 8 

Imports, values, 1919-37 152, 154, 248 

Income: 

Agricultural, lost in depression 15, 16, 197 

Cement, payroll, index, 1923-38 51,52,219 

Cigar and cigarette pay roll, index, 1923-38 51, 53,220 

Cotton goods, pay roll, index, 1923-38. _ 51, 53, 220 

Defined 6 

Discussion of 158, 159 

Distribution, 1919-34 20 21, 197 

Dividends, 1919-34 .. 20, 197 

Dividends lost in depression 15, 196 

Durable goods, pay roll index, 1923-38 4G, 214 

England, per capita, 1934-35 10, 11, 195 

France, per capita, 1934-35 10, 11, 195 

Germany, per capita, 1934-35 10, 11, 195 

Growth 1 94 

Interest, etc., 1919-34 20, 197 

Iron and steel, pay roll, index, 1923-38 46, 49, 214 

Locomotive pay rolls, index, 1923-38 51, 218 

Manufacturing, average earnirgs, 1932-38 58,223 

Manufacturing, composite index, 1923-38 45,213 

Monthly payments, index, 192t>-38 21, 198 

National, adjusted for price changes, 1919-34 10,195 

National, classified, 1919-37 145-148, 243-245 

National, in constant prices, index, 1850-1937 9, 195 

National, lost in depression 16,17,197 

Nondurable goods, pay roll, index, 1923-38 49, 50, 216 

Per capita, 1934-35 10, 11, 195 

Salaries and wages lost in depression in nonagricultural occupations-. 13, 

14, 196 

Sawmill pay rolls, index, 1923-38 51,52, 218 

Service divisions, 191&-37 145, 146,243 

Sources, 1919-21 and 1935-37 147, 149 

Sweden, per capita, 1934-35 10, 11, 195 

Type of industry, 1 919-35 23, 200 

United States total and per capita, 1 850-1 938 . 194 

Wages, cash and real, 1914-37 61 

Woolen and worsted goods, pay roU, index, 1923-38 51, 54, 221 

Industrial operations, seasonable fluctuations 131, 132, 236 

Industrial production, index, 1863-1937 24, 25, 200 

Industrial production, physical volume of, index, 1919-39 26, 201 

Industries, amount required to set up new units 102 

Industry, meaning of an 118, 119 

Interest, national income from, 1919-34 20, 197 

Iron, pig, production and capacity of blast furnaces, 1910-37 35, 20/ 

Installment selling 151. i52 

Labor, available, increase of 160, 161 

See also Employment; and Unemployment. 

Locomotive employment and pay roll, index, 1923-38 ■ 51. 218 

Losses in depression 1. 12-19, 196 

Lubin, Isador, Commissioner of Labor Statistics, Department of Labor.. . 3-SO 

Lumber, production, 1919-37 37. 38, 208 

Lumber, sawmills, employment and pay rolls, index, 1923-38 51, 52, 218 

Machines and new jobs 91 

Manufacturing, composite labor income and hours, 1932-38 58, 223 

Manufacturing, etc., composite labor index, 1914-36 55,222 

Manufacturing industries, leading, relative positions and value of products, 

1899 and 1929 129 

Manufacturing, pay rolls and employment, composite indexes, 1923-38-. 45, 213 

Manufacturing production, composite indices, 1919-38 27, 29, 202 

Manufacturing, seasonable fluctuations in nine industries 131, 132, 236 



IV INDEX 

Pag« 
McGarry study 88 

Mergers and consolidations, historical developments of 112, 113 

Mining, etc., composite labor index, 1914-36 55, 222 

N. R. A. experience from 133, 134 

O'Mahoney, Sen. Joseph C, chairman, introductory statement 1-3 

Output per man-hour, index, 1909-37 59, 60, 223 

Partnerships, census, 1917-36 93, 228 

Patent applications, 1836-1937 150, 245 

Patents issued, 1836-1937 150, 245 

Pay rolls: 

See Income. 

Petroleum, production, 1876-1937 142, 238 

Pittsburgh, Boer study 88 

Population : 

Business, classified, 1900-1937 83, 84, 227 

Growth 4, 5 

Immigration, increase in, attributable to 8 

Retail stores, independent, 1915 and 1935 130,235 

Trends, 1850-1930 8 

Unemployed, classified, 1937 - 63, 64, 224 

United States, 1850-1960 3,4, 194 

Poughkeepsie, N. Y., study showing length of survival of business con- 
cerns -^ 87 

Presidential message to .Congress April 29, 1938 1, 180, 185 

Price control 171, 172 

Prices, wholesale, all commodities, index, 1800-1936 154, 155, 249 

Production: 

Automobiles, etc., 1900-1937 . 141, 237 

Automobiles, annual, 1919-37.. i 35,36, 207 

Coal, 1870-1937 : 142, 238 

Coal, bituminous, 191 9-37 36, 37, 207 

Cement, Portland, 1910-37 34,206 

Cement, Portland, for nine plant;^, 1925-38 121, 123,233 

Cigarettes, 1919-36 40,210 

Coke, for nine plants, 1925-38 124, 233 

Durable and nondurable manufactured products, index, 1929-38 152, 

153, 247 

Flour, for nine mills, 1927-38 126, 234 

Fluctuations, seasonable 131, 132, 236 

Gas, natural, 1883-1937 142, 238 

. Iron, pig, blast furnances, 1910-37 35,207 

Lumber, 1919-37 '- 37, 38, 208 

Man-hour output, 1909-37 59, 60, 223 

Manufactured products, 1929-38 152, 153,247 

Manufacturing, 10 major industries, relative positions and value of 

products, 1899 and 1929 129 

Partial capacity, its effect on cost per unit 173 

Percentage of output of certain industries. 136, 137 

Petroleum, 1876-1937 142, 238 

Shoes, annual, 1919-37 . 37, 38, 208 

Steel castings for nine plants, 1927-38 121, 122, 232 

Sugar, 1870-1937 142, 143, 240 

Wagons, buggies, etc., 1900-1937 141, 237 

Railroads, steam, composite labor index, 1914-36 55, 222 

See also Locomotive. 
Railroad and highway construction activity in the United States, 

1915-37 - 120, 121,232 

Rayon fiber, consumption by United States manufacturers, 1912-37 39, 

144,208, 241 

Reemployment, its effect on registered unemployed 1 162 

Relief, funds, estimated, used for work programs, etc 1 68, 69, 225 

Relief, number, estimated, of households and persons receiving relief, 

work program employment and emergency employment, 1933-39 67, 224 

Residential construction, private, 1915-38 120, 231 

Residential units provided for in new nonfarm construction, 19<^l-36. 32, 33, 205 
Resolution adopted by the Temporary National Economic Committee 

setting forth its function and purpose 2 



INDEX V 

Page 

Retail stores, independent, population 1915 and 1935 130, 235 

Roosevelt, President Franklin D., message to Congress April 29, 1938 1, 185 

Rubber tire and tube industry, employment in 15 plants, index, 1923-38. 126, 

127, 234 

Sales, chain store, total and percentage, 1935 - 138 

Sales on credit, volume 179 

Sales, department store, index, 1919-38 " 41, 210 

Sales, goods purchased by wage earners, etc., index, 1913-37.. 61 

Sales, installment 151, 152 

Savings, in England, relation to national income 177, 178 

Sawmills, employment and pay rolls, index, 1923-38 51, 52, 218 

Scope of the hearings, opening statement of the chairman ._ 1-3 

Selling problem 152 

Shoes, production, 1919-37..- 37, 38, 208 

Silk, imports, 1870-1933 39, 144, 208, 241 

Steel castings 120, 121 

Steel castings, production for nine plants, index, 1927-38 121, 122, 232 

Sugar imports and production, 1870-1937 142, 143, ?40 

Tax structure, effect of changes on corporations 94 

Technology, changes in 150 

Temporary National Economic Committee: 

Directors of study 1 

Function of the Committee, opening statement by~ Chairman 

O' Mahonev -.- 1-3 

Outline of study 181, 182 

Procedure 3, 193 

Resolution creating the Committee 1, 192 

Textile fiber, consumption by United States manufacturers, 1870-1937 39, 

^- 144, 208, 241 

Textile field, cost of enterprise 90 

Thorpe, William L., Director of Studies for Department of Commerce.. 81-156 
Tire and tube industry, employment for 15 plants, index, 1923-36. 126, 127, 234 

Trade associations _' 139 

Unemployed, census and classification, 1937 63, 64, 224 

Unemployment, estimation of 159-163, 250 

Wages, cash and real, in manufacturing, mining, and steam railroads, 

1914-37 61 

Wage and salaried workers, effect of decline in national income 13, 14, 15 

Wagons, buggies, passenger cars, and trucks, production of, 1900-1937. 141, 237 

War factor, effect on national economy 154 

War loans, loss of 166 

Wholesale prices, all commodities, index, 18m-1936 154, 155,249 

Wool, consumption by United States manufacturers, 1870-1937 39, 

144, 208, 241 

Woolen and worsted goods, employment and pay rolls, index, 1923-38 51, 

54, 221 
Works Progress Administration: 

Census, 1933-38 67, 224 

Funds, estimated expenditures, 1933-38 68, 69, 226 

World prices, effect of . 19 

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