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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
/
/
/
/
.'""
»
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
0
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
0
^
«. •
^
\
^1 -V— ^
1
i IT
ji \l
•=^i— V-
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f/t
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*!.
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:::^
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li
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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
1
160
140
120
/
,..
100
.A^_L
cfkJl
i
■^
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%
100
ii
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fr
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1
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80
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f
rir^
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r
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— ADJUSTED FOR aE«»UL VMUnON
20
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
K
120
m
80
60
40
20
A
A
eJ"
M
fV\
^
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f
n
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V
'Employment
kJ 1 ^^
rT
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v,
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4
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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
if^
A
^
m
A
'/^
^
'h
rv
rS
P
^
^EMP
.OYM
ENT
^^dl I J
r
r^j
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PAY
^OLL
A
V
l
h
1
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f
/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^
V
^
X^
^^
'V/^
d\
^
EMP
LOYM
-.
rjir^^ J ^
>
1 /¥-^
:p
m
\
YJ>
/
i
1
1
i i
-
1
!
' 1 1 v>
1 PAY ROLUS^
\/
1
i i
!
1
i
i !
! ■
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
\k
J^
Ok.
S'v
1
W"
^
/I
L
PAY ROL
.S-?
^
MPU
YMENT^
. ^
V
0
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
P'
^
Aa
f
rv,
^
^
l^
1^
A
\
A
1
'EMPLOYMENT
/^
^
M
^
PAY
ROLL
^fXr
/^
y
■^
_!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
0
120
100
80
60
A
r\
\t\
h
a,
t
M
i\
V
in
A
A
A
^1
\k
-EMP
-OYM
ENT
^.
f]
f\
hk
A
T\
h
r
PAY
ROL
LSJ
SA
1^
/i
20
0
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
0
,40
ISO
100
eo
60
40
20
0
^
k
•^
^J
^
k.
Y
V
*^^MPLOYMENT Pf\fp^ ,
^
V ^
^^f
^'^'^
V
J
PAY
ROLLS'^
1
\r
\
-1
v/
v
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
^.1
(
A
H^
L|
f
f\
P^
f\
»t;
^
OYMENT
^
^
K2
f^.
WY
ROL
^
r
r
n
r
J
r
us
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
0
^
1/
\
V
\
\J
V
¥
^
EM
PLOY
MENT
-h
/
\j
L
\^Ai. mIn
\\
V
Wl
i
'TV
him
\
t
p,
\y Ro
LLS-
w 1
V
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
0
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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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
Kr
r
-... 1 ,
.,-.„
N/
._^^
v^
REGULA
R FEDERAL Fl
t;!^=^
.§
W-
Xx
Vk
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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
0
! 1 1 1 '
:,,,,:,,. j ;., ,
. 1 : .
: • 1 1
0
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
0 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
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^
\r
1
f"
qi]
"T"
J 1
r
1.
^
1
L
pill!
EOeN
0
Urn
1 1
It
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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
\ !
0
,
1
MIUIONS OF DOLLARS
1600
1400
1200
1000
800
600
400
200
0
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 PERCENT
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
00
1
1
1
I
;
K
1
\
\
i
i
1
1
X
\
\
'a
\
\
V
'\
^A'
/
\
/ ^
\
7 \
.1
/i
\
V
^
\
\
;
/i
£NT/K£
//^OC/STKY
/
,,^^
4
w
/\
;
"
/_^.^
M
•^.
s^
^T^^r^
V
i
-A<
iv
\^
i
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
j/>
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,
8.000
6.000
4.,000
1
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1.000
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k~^
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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
10
0
u
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f-^
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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
0
Exhibit No. 81
NATIONAL INCOME PRODUCED l^l^-I^^T
COMMODITY PRODUCING DIVISION
BILUONS OF DOLLARS BIUIONS OF DOLLARS
25
20
15
10
1
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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>
\
-Zj
TRA
D£
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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
,—
S£
ey/c
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r
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1
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2
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1
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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
^
A
7^
1
b
\
1
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I
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f
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\ /
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APPLICATIONS FILED _^
h
/
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^P4T£A/TS ISSUED
1^
r
'r
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^
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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
0
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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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
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t^rnsSarrs dMi<iu o/Uaon SMnjrtcs
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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. 0
101. G
26.0
29.4
■.ii. 0
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. 0
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. 0
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 0
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. 0
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 0
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 0
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. 0
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. 0
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 0
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 0
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. 0
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 0
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 0
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. 0
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. 0
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. 0
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. 0
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. 0
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. 0
96, 0
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. 0
32. 2
32. 4
31.0
29.4
1034
26.9
31 0
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. 0
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. 0
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 0
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. 0
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. 0
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. 0
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, 0
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 0
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 0
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. 0
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 0
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. 0
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
0
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 0
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 0
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 0
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
0
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. 0
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' 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 0
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. 0
4, 399. 4
9.8
1920
8,228.0
4, 485. 0
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. 0
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. 0
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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