(See front cover)
Stuck in the mud of the last U. S. Depression (1921), Business was pulled out by a great acceleration of the automobile industry, teamed with a building boom long deferred by the War. The automobile industry then looked back a decade and smiled at its gangling youth. It looked ahead a decade with confidence and composure. Both were justified.
Another ten years and another Depression found the automobile industry a mighty thing in its maturity. Ranked next to Agriculture and Railroads in amount of capital invested, the automobile and its ramifications are the biggest industrial enterprise of the nation. Its orders call for the following percentages of U. S. commodity production:
Steel 15.5%
Aluminum 17.4%
Copper 14.8%
Rubber 82.6%
Lead 26%
Nickel 30%
Gasoline 85%
The 21 million automobiles on the road in 1931 were an economic necessity almost as valid as bricks and bread. Almost, but not quite, for the automobile still combines pleasure with necessity. To millions of owners it is their most beautiful and costly possession. Its esthetic appeal is at once its weakness and its strength, for the potential owner who need not buy for necessity must be made to buy for pleasure. If he bought enough, the automobile industry might again perform its magic trick, might pull Prosperity out of Depression.
Business looked last week with eagerness at the 32nd annual New York Automobile Show, as usual to be seen in the classic halls of Manhattan's Grand Central Palace. For seven days every manufacturer except Ford, who has always scorned the Show (though he puts his Lincoln in it), demonstrated the innovations his engineers and artists have been able to evolve in the past year with some $100,000,000 for research at their disposal. Basing their prediction on sales at last year's Show, prophets put 1931's probable output of passenger cars, a prime index, at 3,500,000. Final figures last week showed 2,040,000 cars were turned out in the U. S. and Canada, compared with 2,910,000 in 1930. 4,794.000 in 1929 (record year), 4.012,000 in 1928. Confronted by an alarming decrease, prophets turned over their problem to statisticians, gave them a basic theory that 21 million cars would continue to roll the roads, asked what 1932's production must be to maintain that figure.
The simple arithmetic answer is three million cars each year. Various adjustments have reduced the magic number to eight millions for the three years 1930-1932. Statisticians point out that combined 1930-31 production was 4,950,000, that 3,050,000 will have to be built in 1932. This, they have said, is unlikely. They estimate an output of 2,500,000 this year, concluding that only 20 million cars will be on the road while replacements fall another million behind.
Two things might upset these calculations: a great business revival in 1932; or developments within the industry itself so compelling that present owners might be excited to the pitch of buying new cars instead of hoarding their money or worrying about their banked savings. It was just possible that the public might replace its doddering pieces of locomotion with new models on a grand scale.
Some 25,000 people went to the New York Show on its opening day. They saw 260 passenger cars representing 18 makers, 32 brands.