American Economic Position at End of 1922

IN THE years immediately preceding 1914, the American people earned an aggregate income of 33 to 34 billion dollars, of which they saved about five billion, the annual saving being expressed mainly in the form of houses and railway extensions; to a less extent in public utilities, public improvements, factories and mines; and to a very small extent in foreign investments. It appeared needful that we should save and invest annually in these ways about 15 per cent. of our aggregate income in order to keep the development of our plant, so to speak, ahead of our steadily growing needs. The common knowledge that at present our housing and railway facilities are inadequate suggests immedi-ately that we have been running behind the pre-war ratio of reinvestment. Since 1919, we have not had any carefully prepared, authoritative estimates of the national annual income. However, with some experience in this subject, I have ventured to make rough estimates, which rest on solid foundations, although some rather empirical develop-ments are involved. Such estimates would be consid-ered good work in this field if they fell within limits of 10 per cent., plus or minus. Even so, these data are more useful when quickly available than more accurate data that are belated; for recognizing that there is a margin of error we can at least get a reasonable and approximate idea of how things are going.