limestone, entering the iron and steel industry is traced through and the proportionate disposal is shown at each stage of processing and in the final disposal to the fabricating industries. In chart IX the consumer food dollar is traced back to show what proportion went to each of the productive processes involved. Of this dollar, 25 cents went to the retailer, 9 cents to the wholesaler, 20 cents to the processor, and 41 cents to the farmer. The remaining 5 cents paid for transportation at each of the various steps. The proportions shown in these charts for physical volume and for dollar expenditure are not necessarily representative of other physical products or of dollars of expenditure for other types of goods. They serve merely as examples of proportionality in one specific type of flow and one specific category of expenditure. For the whole economy, the proportionate activity at the several stages in the flow from resources to consumers is shown in some detail in chart X. Here the various stages of extracting, processing, fabrication, and distribution are shown in the successive rows of the chart. The manpower employed in raising basic agricultural products and in mining is shown in the top row, that in processing these basic products, and further steps in manufacturing in the next two rows, wholesale distribution in the next and finally retail trade and Source: Unpublished study by Dr. Gardiner C. Means for the National Resources Committee, Capital Equipment Requirements of the Iron and Steel Industry. 605 Domestic service.. 126. 2 Printing and publishing (allied ir dustries). 800 Miscellaneous industries. 128 Rubber products (other thon tires ard tubes). 134. 1 Pottery. 134. 2 Marble, granite, and other glass products. 6 Telegraph 123 Converted paper products.. 125 Miscellaneous lumber products.. 118 133 8 138 138.1 Iron and steel products.. Knit goods.. Cement. Manufactured gas.. Copper, smelting, and refining.. Nonferrous metals (other than copper). Nonwage earners, manufacturing and mining. 121 Paper and pulp. 301 Wholesale trade. 126 Printing and publishing (newspapers and periodicals). 109 Other foods... 140 Nonferrous metal products. 145 Machinery (excluding electrical). 900 Agriculture.. 112 Leather products, other than leather and boots and shoes.. 119 Wearing apparel.. 134 Clay products, other than pottery. 146 Miscellaneous manufacturing industries. 201 Crude petroleum.. 205 206 87756 5 446 500 3,700 700 1,500 400 600 500 500 200 -100 -100 -1.000 -200 service to the consumer at the bottom. The preceding chapter has already shown that these successive steps follow roughly a geographical pattern from the location. of natural resources to the location of consumers. From this chart it is possible to trace through the various steps, seeing the proportionate volume of manpower used at each stage. Thus, it is possible to compare the man-power engaged in raising cattle and hogs with that engaged in meat packing, in tanning leather, and in the manufacture of shoes and other leather products. Forest products move in two different directions, some into paper and pulp thence to other paper products and into books and newspapers, others into lumber mills and thence to furniture and into the construction industry. Minerals too may be traced through, coal and iron ore into iron and steel and thence to iron and steel products and to their final fabrication largely in automobiles and various types of machinery. bulk of these products then travel through the channels of trade to the ultimate consumers. At the left of the chart the services to the economy are indicated, public services of the Federal, State, and local governments, banking and finance, the transportation and communication services, and electric power. The proportionate distribution of manpower employed in the various services to the consumer is shown at the bottom. Of course, the functional structure of the economy does not follow so neat a pattern of successive levels of activity as this chart would indicate. The basic resources do indeed have to pass through successive stages but some travel much more directly to the consumer in a relatively unprocessed state such as fresh fruit and vegetables, fluid milk, and household coal, while others such as cotton fibers and iron ore have to pass through a series of processes. For some items, particularly machinery, there is a back flow as fabricated products are used in stages of production closer to the natural resources. On the other hand, those things 139 801 Confectionery and chocolate. Bituminous coal. Woolen and worsted. Lumber and millwork Leather (tanning and finishing). Transportation equipment other than automobiles.. Segments which are italicized are considered to be less reliable; i. e., correlation is less than 0.90. 1 The employment data are taken from the report, Patterns of Resource Use, National Resources Committee, and the industries defined as in that report. The long-time trend is derived from a linear logarithmic regression obtained by relating employment to consumer income and time, using the data from 1919 to 1935. The 1929 employment is calculated from the regression by substituting the value of 64.7 billions of 1936 dollars for consumer income, this being the value of the long-time trend in consumer income when projected to 1929; the 1930 employment is obtained by substituting the value of 66.8 billions of 1936 dollars of consumer income. Agricultural employment was calculated from a linear regression relating employment to consumer income and time, using the data from 1929 to 1936. Federal Government in 1930 was calculated from a trend based on employment data for the years 1933 to 1936. 2 Code number used in Patterns of Resource Use, National Resources Committee. 3 This is the ratio of the difference in the long-time trend values of employment in 1930 and 1929 to the actual employment in 1929. which reach the consumer in the form of services usually originate closer to their final point of consumption. In spite of the actual complexity of the production flows, this chart covering the total manpower used in 1935 does give a rough picture not only of the segments of production in which this manpower was engaged but also the flow relationship from resource to the consumer. For each of the separate activities presented in chart X it is possible to derive trends similar to those already given for the major segments. In Table III the annual change in manpower engaged in each of 81 lines of activity is given and is stated as a percent of actual employment in 1929. As in the case of the major segments, the figures represent the annual change in employment which could be expected if there were no depression. The industries with growing employment are shown first, then those having little change in manpower engaged and finally those with declining employment. In order to bring out the significance of these trends, a second figure is given for each line of activity, the number of additional workers that, it is estimated, would have been called for each year, figured on the basis of the workers actually employed in 1929. Actual employment for each industry in any year reflects a combination of long-time trend and sensitivity to depression. An examination of the relative sensitivity of industries with rapid, slow, or declining rates of growth, however, does not show any noticeable con nection between long-time trend and sensitivity. Differences in sensitivity, on the other hand, are closely related to differences in the durability of goods produced. The discussion of sensitivity will, therefore, be postponed at this point and combined with the discussion of durability which follows. Durability of Products One of the most important characteristics of the structure of production is directly related to the durability of products. The significance of durability was apparent in the analysis of consumer wants, for it there became clear that durable consumer goods were more sensitive to variations in consumer income and consumer expenditure than were nondurable goods. This greater sensitivity of consumers' demand for durable goods finds a direct reflection in variation in the production of such goods and is paralleled by a similar behavior in the production of durable goods for producers. In chart XI the value of all production in 1929 is divided according to the durability of the product. Approximately three-quarters of the total was production of consumers goods while the remaining quarter was composed of producers goods. Residential construction is included with the latter both because such a large proportion of residences are rented by the occupant and are properly classed as being investments by the owners and because as a matter of social accounting it is convenient to impute rents to owner-occupied |