Producers' Goods

The Harvard School of Business last week issued a small opus entitled The Behavior of Consumption in Business Depression. Its author was Arthur R. Tebbutt, instructor in Business Statistics. It was a nice dry statistical study tending to show by many tables just how much con- sumption fell off from 1929 to 1932, but it packed a punch in its conclusions--a punch at the theories behind the Industrial Recovery Act.

The trend of the evidence presented was of this order: that depression consumption of meat, butter, tobacco, grain, textiles, clothes fell very little if at all. That the consumption of steel and other metals and of lumber had fallen to less than half the pre-Depression level.

Pointing out that the average man buys meat, butter, tobacco, etc., etc. and buys no steel or lumber, the report came to a brief conclusion:

"In the aggregate, consumption of goods by the ultimate consumer has re- mained at a very high level even during depression. . . . Judging the character of stagnation in business solely on the basis of consumption, we find that the depression is marked by sharply reduced con- sumption of producers' goods. That the way out of depression is to increase consumption of producers' goods seems evident. ... At the present time, however, if such a balanced recovery does occur, it does not seem likely that it can be attributed in any large part to the current activities of the Administration. .

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