WHEN, a s usually happens after a war, some of us have war profits and war savings to jingle in our jeans, it’s hard to remember how things were going a few short years ago. But hard or not, it is important that we remember what America was like in the year 1940, our last year of peace.

Throughout the war years we experienced widespread prosperity because of the unlimited demand for war materials, and the determination of all of us through our government to borrow the money to pay the bills however great the cost of victory might be. In 1946 we are entering a period of great peacetime prosperity based primarily on the huge backlog of demand for civilian goods which accumulated during four years of war. We must go all the way back to 1940 to see the workings of our economy in a period unaffected by all-out war.

There are, of course, two ways to look at America at any given time. We may look down and see with gratitude how much worse things might have been; and we may look up with regret and see how much better they might have been.

When we look down, we see a great deal in the America of 1940 to please us and to make us proud. On the bread-and-butter side, our people on the average enjoyed the highest standard of living in the world. We ate on the average more and better food. We lived on the average in greater comfort. We had better working conditions. We had more places of entertainment and greater opportunities to enjoy them.

Our natural and human resources were stupendous. As compared with all other nations, we were rich in land, forests, minerals, water and power resources, industrial and farm plant and equipment, and the skills to use them all. Our soil, our geography, and our climate were in our favor. Except for a few tropical products, there was nothing we could not produce for ourselves.

Although in numbers we Americans made up only 7 per cent of the world’s population, we possessed 40 per cent of the world’s petroleum reserves, 18 per cent of the world’s iron, 50 per cent of the coal, 20 per cent of the copper, 17 per cent of the tillable land, and 27 per cent of the effective water power.

We had a working force of 54 million men and women—a far higher percentage of them trained in some skill than had any other country.

One can count the workers in a factory or on a farm, but it is hard to measure the inventive genius of Americans. To state that in 1939 the Patent Office issued 49,080 individual patents, from electronic mousetraps to steaks in capsules is impressive in itself. But only when we look at some of these recent inventions do we recognize the promise they hold for our future. Among them we find great strides in the use of the photoelectric cell, the mechanical cotton-picker, air conditioning, television, synthetic rubber, plastics, and so on without end.

The uses we have made of our skills, our plants and equipment, and of our natural wealth and our creative ingenuity were also great. Although in 1940, as we have seen, we had only 7 per cent of the worlds population, we owned and used 70 per cent of the world’s automobiles and trucks, 50 per cent of the worlds telephones, we listened to 45 per cent of all the world’s radios, we owned and used 35 per cent of the world’s railroads. We consumed 59 per cent of the world’s petroleum, 56 per cent of the world’s silk, 53 per cent of all coffee, 50 per cent of all rubber, and 25 per cent of the world’s sugar.

These startling figures and percentages may be multiplied almost indefinitely. But we may have a better idea of the American way of living if we look closely at just one item. The automobile has become a symbol of our standard of living. It is true that people have made great, and perhaps even undesirable, sacrifices to own an automobile. But it still remains the one thing which more than any other satisfies the pride, the restlessness of spirit, and the demand for personal freedom of motion that are so typically and universally American.

Here’s the story in a nutshell. In 1940, there were 35 million passenger cars in the entire world. We Americans drove 27.5 million of them. That meant that we had a car for every five persons.

It’s almost the same story for railroad mileage and railroad traffic, for telephones and radios and washing machines, and all die way down to clothing and cosmetics. Nor do we have to apologize to anyone for the strident parade of these figures. They do not represent just bigness. They represent the measure of our economic well-being.

Our great natural resources, abundant and resourceful skills, the cars and die telephones and the railroads and the canned food, the vast array of clothing and radios and movie houses and public libraries and public schools, the thousands of miles of good highways—all of these added up in 1940 to what we liked to call the American standard of living and the American way of life.

Our great natural wealth, the resourcefulness of our people, our great strides in science, improved nutrition and health, all contributed to the improvement of our standard of living. And it was that rising standard which enabled us to expand our democratic way of living—the way which gives us each the choice of where to live and at what to work, what to read and where to pray, how to dress and eat and play—all these opportunities for the individual which make up the American way of life.

Allowing for the differences in the cost of living in various countries during 1940 and measuring the standard of living in terms of the real goods that people get for their incomes, our workers enjoyed a standard of living averaging twice as high as that of western European workers, more than three times as high as that of Latin American workers, more than six times as high as that of the better-paid workers in Africa or Asia.

To sum up, in 1940 we found in America—on the credit side—an average standard of living and a way of life as good as and perhaps better than those enjoyed by any other major nation anywhere in the world.

But the averages can be misleading, as a certain economics professor discovered. Traveling in the New England back country, he asked a native the depth of a stream. “I would say a scant two feet, on the average,” was the reassuring reply. The professor swallowed a lot of water before he got across. A stream may average only two feet in depth and still be eight feet deep in the middle.

If figures like those which I have presented were the final answer, we could afford to stick out our chests and to tell the world that America was the best of all possible places. Many Americans did just that, which is perhaps one big reason why so much was left undone. If you are relatively well off yourself, there is always the temptation to point with pride toward the general averages and to forget the millions of insecure and frightened people who in peacetime have walked our streets in a fruitless search for jobs, or wandered from farm to farm in search of a meager living.

As a matter of fact, we had no right to feel very proud of our economic accomplishments in the year before the war. If we compare our achievements to those, let us say, of the Balkans or China, we looked like economic champions. But if we judge them against the background of our resources and opportunities, our batting average was nothing to brag about.

The truth of the matter is that we failed, and by a wide margin, to produce the abundance of goods and services—the high standard of living for all—of which we were so clearly capable. And this was true not of 1940 alone. While it’s true that we doubled our national output every 20 years since the Civil War, it’s equally true that in four out of every five years we suffered from sizable unemployment. We kept seesawing up and down, with roughly a year of real depression for every year of real boom. At the peak of the booms we made nearly full use of our resources of men and materials and plants. At the bottom of the depression we let nearly half of those resources lie idle.

Taking one year with another, we produced only about three quarters of the goods and services we were capable of producing. This meant men without jobs and business without customers. It also showed up in great lacks for millions of our people—lack of food, of health, of education, of housing, of recreation. This spelled poverty, insecurity, and denial of opportunities for at least a third of the nation.

Let’s look at the conditions of 1940 more closely. Every available study shows that three out of four Americans in 1940 needed better balance of diets, and one out of every three Americans just didn’t have enough to eat. And, strangely enough, the farmers who grow our food were not much better off than our industrial workers in this respect.

Food deficiencies show up in the people’s health.

The real state of the nation’s health was brought home to us sharply when the Army rejected 40 per cent of the selectees examined, a shocking percentage of the rejections traceable to undernourishment or poor diet.

It wasn’t just a question of inadequate or improper food. We were also disturbingly backward in providing ourselves with the facilities needed for our national health. Though we had the men and the skills and the materials to build and to staff hospitals and clinics, we had hundreds of counties without a single hospital or clinic. Fully 40 per cent of all our counties—1200 of them—had no general hospital. And throughout the country there was a great lack of dentists, doctors, and nurses.

The people with low incomes naturally suffered most from these lacks. Cold statistics tell us that if you worked in an American factory in 1940 you could expect to die eight years younger than your cousin with an executive job in a department store. The death rate was more than twice as high for unskilled as for professional workers. The reason for these shocking contrasts is primarily economic. The lower the income, the poorer the diet and the less the medical service. And that means it is easier to get sick and harder to get well.

This was no way for a sensible nation to treat its most precious resource—its people. But that neglect is a matter of record. And that neglect was as unwise in dollar terms as in human terms. We lost annually, before the war, some 400 million man-days of labor, due to illnesses, entailing an economic loss of 10 billion dollars. The wise expenditure of a fraction of that sum might have prevented the greater part of the loss. There is nothing in all this to be proud of.

The picture is even more dismal in housing than in health.

People concerned about the housing situation have so often repeated the statement that our dwellings are one third good, one third fair, and one third bad that we are apt to remember the saying and neglect the facts. But in 1940 there were literally millions of people living in houses that were overcrowded, without indoor toilets, without baths, without electricity, without decent heating facilities. Many of these dwellings were beyond repair and totally unfit for use.

The situation was bad in crowded city slum areas; it was not much better on the farms. A survey of farm housing made by the Department of Agriculture showed that 70 per cent had no water supply in the house, 89 per cent had no bathtub, 82 per cent had no electricity, 92 per cent had no indoor toilet. In addition to these lacks, many of the farmhouses were so old and run down that they were a menace to health. We need no economist to tell us that it was just the people with poor diets and poor health who lived in the bad houses. We all know that poor housing, deficient nutrition, and poor health go together. We know, too, that with them goes poor education or none at all.

The education picture in 1940 was not a pretty one. One out of every four boys and girls of school age was not attending school in that prewar year. The average grade completed for all Americans was only a little beyond grammar school. And the average, as has been pointed out so often, can be very deceptive. We know that during the war, the Army rejected nearly 2 million men because of illiteracy.

In some states the standard of education and the level of teacher training were so low that the children barely learned to read and write. There was nothing wrong with these youngsters. Their minds were just as ready to receive knowledge as any in the land, but from the start they were handicapped.

Even where they were not actually hungry, they weren’t getting enough milk, butter, eggs, meat, and green vegetables to be strong and alert. Many were sick a good part of the time. Many more were sluggish and dull even when they attended school. Add to all that low standards of education and poor teaching in many areas and you begin to understand the fog of ignorance that closed down about so many millions of our children.

Surely those of us who had the poor housing, the poor nutrition, the poor health facilities, and the poor schooling did not enjoy the American standard of living to which we pointed with so much pride. And they could hardly participate fully in the benefits of the American way of life about which we boasted so freely.

If the American way of life means freedom, it means freedom for all and not just for some. If our way of life is to survive, if it is to thrive and increase, we must make sure that it is the way of life for all of our people and not just for some of us.

Let us now take a closer look at the various economic groups among us—the farmers, the workers, the businessmen large and small—and see how they stood in 1940.

The Farmers—Our Good Providers

Without our farmers we can have neither meat nor bread, neither milk for our children nor wine for our festivals. Considering how much we depend on the farmer, one would expect him to be our most favored son and our most prosperous citizen. But he isn’t, not by a long shot.

Although there has been a great deal of sentimental talk about farming as the ideal way of life, many farmers do not themselves see in it a fair chance for making the kind of good living to which they rightly feel entitled. For generations their children have steadily moved from the farm to the city in search of higher wages and shorter hours and better conditions.

So, though we all still rely on the farmers for our daily bread, we rely on fewer and fewer of them. When our nation was founded more than a century and a half ago, 95 out of every hundred Americans lived on farms. Since then this proportion has dwindled until by 1940 only 23 out of every hundred—30 millions out of our 130 millions—lived on farms.

These 30 million people lived and worked on 6 million farms. Taking account of the buildings, the machinery, the livestock, and the crops in the farms, these had a total value of 42 billion dollars. With this investment the farmers produced crops and livestock which in 1940 brought them a cash income of $8,340,000,000.

This sounds like a lot of money, but let’s see what it really amounted to. Let’s match these farm figures up against the national wealth and production. In 1940 the wealth of the entire United States was estimated at something over 300 billion dollars, and with that wealth we produced goods and services which sold for 97 billion dollars. So, when we compare farm wealth and farm production with that of the entire nation, we find that the farmers, with one quarter of the population, owned less than one seventh of our national wealth and received only about 10 per cent of the dollar value of our national output. Judged by either standard, the farmers of America in 1940 were less than half as well off as the rest of the population.

It is misleading, of course, to talk of farmers as if they were peas in a pod. First of all, there are the different kinds of farmers—dairy farmers, cotton growers, sheep and cattle ranchers, grain farmers, fruit and vegetable growers, poultry raisers, sugar growers, and many others. Their interests are not always the same. Their work problems are not always the same. Their standards of living vary widely. And farmers differ regionally as well, even if they raise the same crops.

But there are even more important differences than these. The differences between the sugar beet grower and the cotton fanner are not so great as those between the farm owner and the farm tenant or the difference between both of these and the sharecropper and the hired hand.

Even among farmers who worked farms they owned themselves, incomes ranged all the way from a couple hundred dollars a year to sums that would look respectable for a corporation executive. In 1940 two thirds of our farmers produced less than one fifth of the total farm output, while the other third produced more than four fifths. Even more striking is the fact that the top 5 per cent of all farmers produced well over 25 per cent of the total output.

But in 1940 fully 40 per cent of all our farms were operated not by owners but by tenants. These, as one might expect, were worse off on the average than the owner group, although there were, of course, some prosperous tenants. At the bottom of the deck were the sharecroppers, many of whom barely eked out an existence. The sharecroppers as a group worked about 10 per cent of the farms. They produced less than 4 per cent of the output.

Finally there were the hired hands. There were some who made a decent living, but not many. In many regions of the country hired farm workers received as little as $15 a month for work lasting from “sunup to sundown,” and at that they got the $15 only through the eight or nine growing and harvesting months of the year.

This is not intended as a textbook on rural sociology. But from the bare and basic facts I have presented it is clear that our farmers enjoyed too small a share of the nation’s wealth and income before the war; that the great majority of the families who sustained themselves by farming or farm work were sustained on very thin fare, indeed.

Anyone who traveled through this land of ours before the war and bothered to look at what was going on off the main highways could see at first hand the problems of these hard-working, underprivileged people. Whether they grew cotton or casabas, wheat or lettuce, whether they raised broilers or beef cattle, snap beans or strawberries, they all had one thing in common: the great abundance of things they had learned to do without.

The majority of our farmers lived in dilapidated houses. They lived far from good schools, good libraries, or any cultural centers. They had limited medical facilities, and they could ill afford them when they had them. The standard of school education was low because so many of the farm children had to study in the distracting atmosphere of one-room schools and under the tutelage of underpaid and undertrained teachers.

You may find it hard to believe, but the health of those country children was not even as good as the health of urban children. All health and dental records show this. A shocking number of them were listless because they weren’t eating enough or weren’t eating the right foods.

But the worst part of the average farmer’s lot was his gnawing fear of tomorrow. Three out of four tenants stayed less than five years on any one farm, and one out of four had remained rooted for less than three months. The impoverishment of land and equipment that comes from constant wandering from rented farm to rented farm is exceeded only by the impoverishment of the tenant farmers themselves and more particularly of their families. Always there was the ever-present poverty and the ever-present sense of futility that comes over people whose hopes become dimmed and to whom the gates of opportunity seem closed.

Nor were the farmer-owners much more secure. They had learned what their fathers and grandfathers had learned before them: that when crops are good, prices are low; and that when prices are high, crops are poor, and the net result in income is discouragingly small from year to year. Only the tragedy of war, or of crop failure abroad when weather here was good, seemed capable of breaking this pattern.

In 1940 farm owners also remembered that the total valuation of their farms was about half what it had been 20 years before. The decline in the value of their farms meant more than a paper loss of dollars and cents. It was a grim reminder of the collapse of prices that engulfed agriculture after the last war’s inflation, a collapse which cost nearly half a million farmers their farms through foreclosure.

The farmers were slowly struggling up from that blow when the depression overtook them in 1929. It is not surprising that in 1940, after two decades of economic buffeting, farmers were uneasy and fearful of what lay ahead.

Yet, despite all this, somehow the farmers carried on. They beefed, but beefing is as American as apple pie. Often they beefed against the wrong persons and the wrong institutions. They weren’t alone in that.

But they went about their business, mindful and often resentful of their lacks and needs and wants; but still proud to be Americans, which means that somehow they had faith in the great future of our country.

Factory Workers—Manning the Assembly Lines

The factory worker is the farmer’s city cousin. His labor goes into the tractor and the chemical fertilizer which the farmer uses. He turns out the clothes the farmer wears and the bed he sleeps in.

Over a third of all workers employed off the farm in 1940 had jobs in factories. Unlike most fanners, the factory workers, like all other workers in our cities, have no property of their own to use in making their living. Some of them, like the tenant farmers, who also have lost the security of land ownership, have a hard time of it even when business is good. Others have found through union organization a partial substitute for the relative security that land ownership gives many of our farmers.

Taking factory workers as a whole, the United States Bureau of Labor Statistics tells us that in 1940 they earned on an average $25.20 for a week averaging 38 hours, or about 66 cents an hour. But this is the general average and it conceals differences at least as great as those we found among farmers.

Men earned more on the average than did women. At the very top of the scale were skilled workers in the automobile industry, who earned an average of nearly $36 per week. At the other end of the scale were unskilled women in the textile mills, who averaged only $12 per week.

On an annual basis, and assuming that these men and women worked 50 weeks out of the year, which is a pretty tall assumption, the annual incomes of factory workers ranged from $1800 at the top to $600 at the bottom. How did the factory workers live on incomes like these?

Naturally, single men got along better than the married men with families. Married men whose wives also worked got along better than those whose wives were tied down by young children. Only workers near the top of the factory pay scale were able to enjoy what we like to think of as a typical American standard of living. That couldn’t be said of the average factory worker, still less of those below the average. The poor and inadequate diets, the cramped and unsanitary dwellings, the shoddy clothing, and the poor and curtailed schooling of the millions of less fortunate factory workers surely failed to meet the promise of the “American Way.”

With the realities of their sordid living crowding in upon them, many of our factory workers were natural escapists. They bought jalopies ready for the scrap heap and with characteristic American ingenuity made them run. On Sundays the whole family piled into these jalopies and got away to the public beaches and public parks, where for a time they could forget their poverty.

Hot dogs washed down with pop cost only a dime, and a nickel buys jukebox music for everyone within earshot. To escape from the bitter reality of their everyday living, these workers went to the movies and eagerly followed the romantic exploits of comic-strip heroes who did all the things they wished they could do. But soon, too soon, they had to return home, where their cares were waiting for them, cares from which there seemed no real way out.

But in the year 1940 even this was not the whole story. There was the ugly fact of mass unemployment. Eight millions had no jobs at all. Millions more felt the threat of unemployment. There were few indeed who could look to the future without fear. This fear of what might happen tomorrow, this haunting insecurity, was for many workers harder to bear than the poverty from which they suffered.

In this respect the industrial worker was perhaps worse off than the farmer. Poor as he was, the average farmer belonged. He had a home. He could always work the garden and raise some chickens. By one means or another he could keep the family going. They could eat and they wouldn’t be thrown out into the street.

But the industrial worker in 1940 lacked even this flimsy security. He was at the mercy of his job. When that was gone, what faced him was the immediate prospect of no food on the table and no roof over his head. Some had savings to fall back upon. Others could turn to relatives for help. But it was still true that the average factory worker lived in constant dread of losing his job. It was on this insecure foundation that his entire life was built.

Thirty or forty years ago millions of our industrial workers still had some roots remaining in the soil. When the factory shut down they could return to their family farm to find a warm welcome and relative security until “things in the city picked up.”

This was no longer true in 1940. Many factory workers had come to the city directly from die “old country” or were first-generation Americans born in the city and having no other ties. Others had long since lost all connection with the farm communities from which their fathers had come a generation or so ago. They were tied to Detroit, to Cleveland, to Bridgeport, to Birmingham, to Seattle. Their bread and butter, the very roofs over their heads, depended on their jobs in the factory.

But in spite of all this, in spite of the insecurity and fear and poverty, the industrial worker of 1940 had surprising faith in our American destiny. His was no bed of roses, but his hopes rarely flagged. 

Teachers, Stenographers, and Clerks

Most of what we call white-collar work is a distinctly modem development. With mass production and with mass markets, tremendous staffs are needed to handle the paper work of a complex economy. And so, to the traditional white-collar professions of medicine and law, of the school and the church, have been added the specialized skills of administration and communication and salesmanship, of accounting and advertising and insurance.

The result was that in 1940 there were 12 million persons—representing over a quarter of everyone employed in our cities—who could be called white-collar workers. A few of these were independent professional people—lawyers and doctors and writers and artists. But most of them were employed at salaries or wages by merchants and businessmen large and small.

It is difficult to enumerate all the types of employees who today come under the heading of “white-collar” workers. Teachers and preachers, stenographers and secretaries, accountants and cashiers, salespeople and telephone operators, receptionists and tabulators, typists and filing clerks, researchers and checkers—the list can be extended to fill pages.

It is even harder, however, to generalize concerning white-collar incomes than about factory earnings. Even if we exclude those in the very top group, who are properly considered managers rather than employees, we find an extremely wide range between the lowest and the highest incomes.

Some white-collar work is so important and requires such great competence that exceedingly generous salaries are paid. On the other hand, in 1940 the prestige of white-collar work had attracted so many people that competition had kept average salaries low.

A vast number of white-collar workers were forced to pay the price of a very slim living for the “distinction” of belonging to the professional, semiprofessional, secretarial, clerical, and financial employees, working in classrooms, stores, reception rooms, and offices.

According to the Women’s Bureau of the U. S. Department of Labor, the great majority of white-collar office workers in 1940 received wages far too low to maintain them at a decent standard of living. Most women office-clerical workers received less than $90 per month, and men received only from 10 to 40 per cent more. The income of salespeople in the same categories was considerably less.

Teachers and librarians, whose jobs require college degrees and years of experience, were notably underpaid. In some large centers, such as New York, teachers were fairly well off and enjoyed a degree of security after a period of trial. But in many sections they were paid as little as $35 monthly.

Despite these and other handicaps, white-collar workers were, in general, better off than farmers or industrial workers. Most of them worked in cities. They had access to the cultural advantages of our civilization. They were better dressed, though often at the cost of proper food and medical care. Their children attended better schools. They kept in closer touch with domestic and foreign affairs. They had a greater feeling of personal freedom and die enjoyment of life.

Their worst enemy was the same sense of insecurity which plagued our farmers and our factory workers. In 1940 many of the unemployed had been and hoped again to be white-collar workers. They were trained as lawyers, typists, and accountants. Millions of those who retained their jobs knew that at any moment they too might be looking for work.

When out of a job they frequently had little or nothing to fall back on, for their savings were even smaller than those of industrial workers. The good managers among them lived within their incomes; but the opportunities which their work brought them were expensive, and a great many were almost constantly troubled by debts.

And yet those white-collar workers were among the stanchest supporters of our economic system and our way of life. They yielded to none in their faith in their own future and the future of our nation. 

Businessmen on Their Own

In 1940 there were about 3 million business establishments in the United States divided among manufacturers, wholesalers, retailers, hotelkeepers, amusement-place owners, construction and service establishments. Their personnel, excluding manual workers but including owners and white-collar employees, totaled over 8 million people.

Some of these businesses were very large indeed, and many more were far from small. But the vast majority were tiny businesses. This was especially true in retailing and the service trades, where over 65 per cent of all business units were found.

In 1940 about 60 per cent of retail and service shops had gross annual sales of less than $10,000. Out of this figure had to be paid the cost of the goods sold and the overhead expenses of running the store—rent or taxes and repairs, light, advertising, etc., plus the wages of any employees—before the proprietor could figure what remained for himself. It is not surprising, I think, with so many establishments operating on such low volume that before the war about 45 per cent of all new business ventures ended in failure within two years.

Between 1900 and 1940 about 16 million enterprises were started and only 2 million survived. W. R. Jenkins tells us (in Forbes Magazine, April 15, 1945) that if you enter a business which does $25,000 a year in gross sales (and in 1940 that would have put you way ahead of the 60 per cent doing less than $10,000), “you will have hard work, long hours, sleepless nights, few vacations and none without worry, and maybe not even much home life.” And at that “it will be a pretty small living for yourself.”

That description was certainly true of small businessmen in 1940. If they did not go bankrupt, most of them survived by virtue of the fact that they worked long hours, employed their own families without pay, and deprived themselves of the luxuries and most of the necessities of decent living. In general, they kept going by doing without.

And yet, those who did survive found in their meager incomes rich promises. They were their own masters. And they still had hopes for themselves and their children. There were no fences to their hopes and their dreams. To them, in spite of their privations, freedom of enterprise was still the essence of freedom. 

The Corporation—Stockholders and Managers

Small business is the traditional form of American enterprise, but since the Civil War its share of the total volume of American business has shrunk steadily. For more than a generation it has been the large corporations which have dominated the business scene.

The modern corporation itself is a fascinating subject for study, but this is not the occasion to do more than characterize it briefly. Owned by thousands of stockholders, each with a relatively small, diluted voice in deciding things, the corporation is necessarily managed by a small group of men. This group, though typically holding only a tiny fraction of the total stock, is able to determine not only operating policies but, in large degree, the actual division of earnings between themselves and the great body of stockholders.

Despite the serious conflicts of interest that arise under these circumstances, for our purposes we may consider the stockholders and managers of corporations as a single economic group. For our present purpose the heart of the matter lies in the fact that both managers and stockholders look to profits of the corporation as the source of their income. Even in the case of our more prosperous farmers the net income from their farms may be their sole source of income. Most of our stockholders, on the other hand, commonly draw their principal income from sources other than their dividends.

In 1940, corporations as a whole earned 7.3 billion dollars, which was not only less than in 1929 but less than in 1919 as well. After income taxes were paid, profits were 4.8 billion dollars, also far less than the corresponding earnings in the two prewar record years mentioned.

Here, too, there were fortunate and unfortunate members of the group. The Bureau of Internal Revenue reports that of the 473,000 corporations earning money in 1940, 221,000 had a net income of 9.5 billion dollars before taxes, while 252,000 corporations suffered losses of 2.2 billion dollars. This indicates that more than half of all corporations suffered net losses and that their losses were nearly a quarter as great as the earnings, before taxes, of-the other corporations.

In addition, a large number barely stayed out of the red during 1940, and many a corporation paid no dividends on its stock that year. Some of these, moreover, had paid none for several years.

At the other end of the scale were corporations which not only had high earnings in 1940 but which for many years had stayed very satisfactorily in the black. Stockholders in some of these had learned to count on the same generous dividend, year in and year out, good times and bad.

The overwhelming majority of stockholders and managing officials of our corporations were, in 1940, free from the personal economic insecurity that burdened most of their small-business colleagues. Yet even they could not forget how, ten years before, the stocks of these corporations had tumbled in value, and how salaries were slashed and then slashed some more.

If husbands could not remember, wives and children vividly recalled the ruin of those families which had placed too great faith in the continued prosperity of the corporations in whose stocks they had put their lifetime savings. Even these most favored people, who in good times had spare cash to invest, found that when things turned sour for the rest of us their own economic security was far from complete.

We have seen that in 1940, in the years before war and the aftermath of war sharply raised our levels of production and prosperity, Americans of every economic group shared in widely varying degrees the things we had as well as the things we did without. Neither in agriculture nor in factory work, in offices and schools or in stores and shops, was the picture all light or all dark. In every line some did well, others not so well, and all too many fared badly. At the very bottom were the 8 million unemployed who, until they found jobs again, lived outside the normal economic system.

The threat of unemployment that hung over the factory and office worker was matched by the threat of foreclosure that hung over the farmer. And both were matched by the threat of bankruptcy and vanished savings that haunted the small businessman and from which the stockholder in even the largest corporation was not wholly free.

In 1940, despite our difficulties, we remained a confident people. Particularly as we looked abroad at die hungry millions in other lands who were eking out a bare existence, did we count ourselves fortunate.

But with all our pride and confidence and consciousness of being better off than other nations, we could not shake off a disturbing uneasiness. We knew that persistent unemployment made no sense and we knew that somewhere, somehow, something was wrong. Each of us knew that the misfortune that engulfed so many threatened the economic security of all of us.

Though clearly we were all in the same boat, there was an unfortunate tendency to ignore this fundamental fact and for the haves” in all groups smugly to blame the “have-nots” for their own misfortunes. That rationalization enabled too many of us to deny any responsibility for the solution of the problem. But it was a hopeful omen that millions of Americans felt in their bones that no one group in the country could be genuinely prosperous or genuinely secure while so many Americans were poverty-stricken and insecure, lacking even the basic essentials of decent living.