AMERICAN TRADE

Evening Post, Volume CXXXVIII, Issue 134, 4 December 1944, Page 7

AMERICAN TRADE

RECONVERSION PERIOD

HUGE DOMESTIC MARKET

(By Leo Cherne, Executive Secretary of the Research Institute of America.)

November 9, 1944. Weakening Japanese naval strength and the new step on the road to Tokio have again turned the spotlight on reconversion questions in the United States. • The possibility that Japan's defeat may follow sooner on the heels of Germany's defeat leads to some reconversion complications, since there may not be an extended transition period, half war and half peace, in which the United States could dismantle its gigantic war machine, without overmuch dislocation. But the transition will not entail large-scale hardship, .if only because such a great consumer demand for goods of all sorts has piled up during the war. This enormous demand for everything from hairpins to motor-cars represents an immediate power reservoir to start the wheels of peace-time production turning. It is backed up by an enormous savings reserve. It is conservatively* estimated that wartime savings in the United States will amount to at least one hundred billion dollars by the time Germany is defeated.

There haVe been some indications of how the American public intends to spend these dollars saved in wartime. Over a year ago, for example, the U;S. Chamber of Commerce conducted a survey based on, "If the war ended tomorrow, what purchases would you make within the next six months?" The replies revealed the following significant types of pent-up consumer demands in the United States: (1) Over three and a half million motor-cars, representing expenditures of over three billion dollars. (2) Household appliances, such as refrigerators, washing machines, stoves, vacuum cleaners, radios, sewing machines, and electric irons, etc., would be bought to the extent of another billion dollars. (3) Perhaps the most important from the viewpoint of national economy as a whole 1,414,000 American families said they intend to build new homes, representing a building boom of at least 7,150,000,000 dollars. EFFECT ON FOREIGN TRADE. . Almost every field of consumer goods reflects some desire on the part' of the American public to buy the things, that have not been available in wartime as soon as they appear on the post-war market. Appraising these figures it is important to remember that they describe the situation existing over a year ago. Since then even more goods have worn-out, without replacements, so that the general consumer demand at the end of the war will be far greater. The existence of this tremendous domestic market for the products of American industry-will have its effects on foreign trade. American business is likely to have; its hands full supplying the needs of domestic consumers without seeking foreign markets. There will of course be foreign trade, but it will be only a small percentage of the total national output of United States industry—and is most likely to consist either of relief or rehabilitaties "commodities or such products as will most healthfully establish sound import credits for foreign countries. »

It is important, to remember, too, that any expansion of foreign trade between the United States and other nations will be within the. framework of reciprocal trade agreements of the policies established at the Bretton •Woods conference; on international currency stabilisation and in ' accordance with the basic policies of international co-operation outlined at Dumbarton Oaks. ■■','.