WARNING OF DEPRESSION?

Chronicle (Levin), 7 February 1949, Page 5

WARNING OF DEPRESSION?

(N,Z.P,A.~

"Retiter-

. 1 1 W 1 Stocks Slump Heavily In United States

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Received .Sunday, 7.15 p.m, WASHINGTON, Feb. 5. Increasing unemployment, slippi ng retail prices -and a sudden dip in the stock markets throughout the nation, have produced a string of "There is no need to be alarmed" type of statements from ofijcial spokesmen. Two high Government spokesmen, the Seeretary of Labour, Mr. Maurice Tobin, and chairnum of President Truman's Economic Council, Dr.' Edwin Nourse/ were quick to announce that there was 110 need for alarm. Alr. Tobin admitted unemploymenl was now at its postwar peak but in sisted that it was not alarming. How ever, Dr. Nourse told reporters that "these months are very decisive and anyone wlio has responsibilitv is watchuig tliings closely. " Among best ixifornied ecoxxoxxxists in Washinglon there is the firnx conviction that American econoxxiy has now entered its decisive postwar phase and tlie ixext few months will tell whether inflation can be levelled off safely and gradually or whether a "faust" is really coming. The joint Senate and House Economic Committee announced today that it would begin hearings on Tuesday to determine whether the decline in employment and prices is merely a postwar adjustment or the warning of a genefal depression. Agriculture and economic experts would be-among the iirst called to give opinions. Then a group of represontatives of labour, management, agriculture, education and government would testify. Big Break in Markets. New York stocks dropped over 1,000, 000, 000 dollars in value on the Stock Exchange today under heavy . selling attributed to a weakness in grains and cottons, general price declixxes and reports of rising unempioyment. It was the widest break since Xovember 9 aiul xollowed the loss of about 750,000,000 dollars in stock values yesterday when the Creole Petroleum Corporation cut its dividend because of a " reduced demand ' ' for crude oil. Trading quickened today as stocks were dumped on the niarket and the day's turnover of 790,000 shares was the largest for any Saturday session since Xovember 6. It compared with 300,000 slxares a week ago. Wall Street quarters said small stockholders had tunxed extrenxely cautious oecause of the fall in conxmodities and Indications of further price cuts in con sumer goods lines. Losses in individual stocks today ranged from oue dollar to 350 cents 0 share and virtually eyer.v leadingj ' ' blut chip" was hard hit. There was heavy selling agaixx toda) in the (Jhicago graiu piis which tradt quarters said was caused niainly by tiu growing opposition to high prices both here and abroad. The losses ranged to more than three cents a bushel in rye. The Xew York eotton niarket had an extreme loss of nearly three dollars a bale but staged a late rally to close dowu by 105 cents to 130 cents a bale net. The Pennsylvania Railroad announced today that it will pay off approximately 2500 xnaintenance workers as a result of a "more than seasonal" de cline in traffie. Associated industries of Massachusetts reported that 26,000 manufacturing wage earixers wei'e laid off in Jan uary, some for shoit periods aud otlxers for iudelinite periods, A11 estimated 50,000 workers now are on reduced work schedules.