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According to the program, I am booked to talk to you about "Busi¬ness Booms" but I am sure that those of you who have been engulfed in any of the so-called business booms of the past are not too anxious for a recurrence.
However the full title of the subject that Mr. Goldman asked me to speak on is: “What effect will European war purchases and American Rearmament have upon the Cemetery Business". I think this subject will be a more interesting one than "Business Booms".
I believe that the majority of you come to this Annual Convention primarily for the same two reasons that I do, and one is to learn something that will help us to go back home and do a better job in our Ceme¬teries.
The subject assigned to me is far-reaching and, if approached from a technical point of view, would take hours to cover and I am sure we haven't the time to approach it from that angle. What I want to do is to give you the meat of the subject in as condensed form as possible.
No.1: My reaction when I got the word from Ellis Goldman to talk on this subject was to write him right away and tell him that I wasn't an economist and I didn't feel I was qualified to discuss a subject of this type with its far-reaching ramifications. But on second thought I said, well, the fellow says he wants me to tackle it. I am not going to let him down, so I started and proceeded to dig into the records. I naturally thought I would make comparisons with the past war. That ought to be easy. All you had to do was figure out what happened then and the same thing should happen again, but I found the further I dug into the records the further I was from the desired results. I began to get dizzy.
Figures that ran into billions sounded like an idea of Amos and Andy fame. Then I started to analyze the subject, the contributing factors. I came to this realization, - how long will the war last? Because that is going to have a big bearing on the amount of money they are going to spend here on armaments. Who will win the war, because after all, that is going to have a big bearing on our future so-cal1ed business prosperity? And will we get into the war - that is another very important factor.
Then, our domestic problems have to be considered, - taxes, legisla¬tion, policy, and the election in November. Who is going to lead our country for the next four years?
Well, I don't mind telling you I got plenty confused. I said, well, I don't want to go out to that convention and stand on the platform and say, well, you are going to hear something from E. J. Lavoie, economist. E. J. Lavoie is not an economist.
I decided to arrange several informal chats with some of the outstand¬ing economists available, and, what I tell you here this morning is the combined opinion of the following men with whom I conferred on the subject:
Harry Comer, Economist, with Paine Weber & Co. Bankers, New York City; George Courtney, Statistician, with Sullyberg & Co., Members of the New York Stock Exchange, and Herbert Shenkin, Political Analyst and for the past seven years in the employ of the New Deal and NLRB and FHA. He is an attorney.
We held several informal discussions, and the following is a general consensus of their opinions.
At this point, domestic productive activity evolving around the Defense Program and British spending for armaments is rapidly rising and promises, very shortly to dominate the entire industrial situation. It is evident that with the pumping of enormous sums of money into the industrial arteries, that business is bound to continue on a high level for a long time to come.
I said, "What is a long time to come?" They said, "Well, from 2 to 10 years, depending on the contributing factors", that I mentioned previously.
In the first year of the war, Britain spent over $2,000,000,000 for armaments in this country. An idea of what this spending, plus the spending of our own Country on the National Defense program may mean to general business, once it hits its full stride, is found in the employment figures in the steel industry. Employees gained 14,000 in July over June and payrolls increased from $77,000,000 to $82,000,000 and August was a bigger month than July. Every dollar of this means increased purchasing power. With the continued increase of British buying and US Government spending for Defense, the trend is bound to continue on the upgrade and this trend is most likely to continue with few interruptions, until the cessation of hostilities in Europe.
I asked these men what was the condition of business in the country today, and I am, here to tell you I was amazed and surprised. I guess I must have had on a pair of dark-colored glasses for the last few years. They quoted figures from the Federal Reserve Board to show that industrial production at this time is greater than it has ever been in the history of the United States, greater than in 1929, and they show that the spend¬ing of our purchasing power has reached its zenith up to this particular time.
No doubt, you are all thinking how long the war will last and who will be the victor. I am not going to go out on a limb, to make any pre¬dictions. However, it is the consensus of opinion that a British victory will increase the height and. duration of American business prosperity, as all Europe will have to be rebuilt and rehabilitated and the United States will be the country to most benefit from this enormous post-war spending, as Great Britain and the United States are the only remaining Democracies of any consequence, using, the capitalistic system. This enormous post-war trade would be handled through the orthodox method of foreign trade with a free flow of capital in international trade.
If Germany wins, there will still be a great demand for materials, both raw and finished, to rehabilitate the war-torn countries, but instead of the free flow of capital in international trade, a new method of Cartels and Barter will be instituted. I understand that Dr. Schacht, Hitler's financial advisor, has, already published a book outlining the manner in which German dominated Europe will deal with Barter and Cartels at the end of the war.
Now it is the unanimous opinion of the gentlemen I conferred with that our entry into the war would be a catastrophe for American business. Profits would vanish because of regimentation and taxation. Not only would men be conscripted but capital and plant equipment conscripted, and any benefits that might arise from the war spending would immediately be wiped out through that method of taxation.
Then in connection with our domestic affairs, who will be elected President in November? Now I don't want to come before you and ap¬pear that I am making a political speech nor impose upon you my choice for President, but I do feel that a discussion of it is in order.
If Wendell Willkie is elected we will have a business man at the head of our government and with this tremendous amount of spending of money that is going to be pumped into industry, we will have an opportunity to start a business administration at a time when a lot of money is in flow and that in turn will enter into the free flow of capital to business, instead of the continual harassing type of legislation that our present administration is sponsoring.
Now in discussing this particular subject, Mr. Shenkin authoritatively said to me, "Lavoie, it isn't so much the laws that have been put on the books because I was in the N.L.R.B. for a long while and I think it is a good law, but the people who are administering the laws and the attitude they take. I believe that men have a right to band together, form trade unions, and present their problems for discussion, but the N.L.R.B. is administered by men who believe that business has no place and that the only person they consider is the working man". And so, as he states it, it is not the way; it is how.
I don't believe there is anybody in Wall Street or any legitimate banker in the country that objects strenuously to the Securities and Ex¬change Commission, but I am sure they do object to the manner in which the law is being enforced and the men that are enforcing it, and so it is their opinion that an election of Wendell Willkie, a change of political administration will be a great help to the continuation of this boom or this business prosperity that we are now enjoying and that is going to continue for a long time to come.
No.6: As figures show, our normal peace-time trade has slackened off. The export of many of our farm commodities, - wheat, cotton, corn, and so forth, has gone down considerably. This has been greatly over¬come by war-time spending and purchasing of manufactured equipment, and I believe you can see that it will affect the industrial centers to a much greater degree than it will the rural or farming areas.
I trust I have been able to put over to you the idea that we are now having a real period of business prosperity. Business is good from all indications. It is going to be better, but it is up to each one of us to go out and get our share of it.
In summing up, I believe it is apparent to all of you that we are now in a period of business prosperity that will continue for some time, to a greater or less degree, depending on the eventual outcome of the Euro¬pean conflict.
The foregoing analysis refers to business in general in this country. However, the direct effect it will have on your cemetery or mine depends a great deal on our particular geographic location. For example, a woolen mill in New England will be able to take advantage of the increased purchasing power of the whole country through their wholesale and retail outlets, but a cemetery can only benefit by the purchasing power in the town or city in which it is located. It seems quite evident that those cemeteries located in industrial centers will benefit to a much greater extent than those in rural or farm areas.
I trust that this analysis will spur you on to greater efforts in your respective communities. Business is good and from all indications, it's going to be better, but it's up to each one of us to go out and get our share of it.
From the publication:
“1940-1941 Cemetery Handbook & Buyers’ Guide”
ACOA 11th Annual Convention & Exposition
Hotel Statler, Buffalo, New York
September 8-11, 1940