and assuming we avoid both armament races and gifts of free steel to other nations. Failing the introduction of a new series of economic or social forces in our national life — forces that would overturn its old patterns of economic growth — an average annual production of approximately 40 million gross tons is the mean about which future fluctuations will probably oscillate. (A gross ton is 2240 pounds; in terms of net tons of 2000 pounds the figure would be 45 millions.)
Many of our other great industries have also reached their maturity. Note, in Fig. 6, the chart for the growth of steam railroads (miles of road operated). The maximum was reached between 1910 and 1914; since then there has been an actual decline. The railroad industry as such will have no more real expansion under economic conditions as we know them. Just as significant as the maturity reached in mileage operated is the fact that the tons of freight originated have actually shown a decline on the per capita of population basis, even during the years of World War II.
Fig. 6. Steam Railways
Miles of road operated (first track) in continental United States, 1830-1940. Decennial data. A trend is shown, projected tentatively to 1960. Ratio scale.
Much was made of the unprecedented volume of freight traffic carried by the railroads in the recent wartime period, and of the record of freight-miles built up. Such figures largely reflect long hauls and the fact that the usual unit of measurement is the ton-mile. But by 1943, when our war effort was in full swing, total tonnage originated was still only about 9 per cent more than it had been in 1929. On the per capita basis it was actually less, because the population had increased. General Leonard P. Ayres of the Cleveland Trust Company, one of the country’s foremost statisticians, could only call it “astonishing” that our railroads in 1943 actually originated less freight per capita of the population than they did in most of the years from 1911 through 1929, and far less than in the war years of 1917-1918.
Fig. 7. U. S. Shipbuilding, 1830-1945
For 1894-1939 the gross tonnage is shown of merchant vessels launched (100 tons or over). Prior to 1894 the chart shows tonnage of vessels built, adjusted to conform to the average tonnage launched from 1894-1907 and set back one year. From 1939-1945 the gross tonnage is shown of merchant vessels built (1000 tons or over).
Two trends are indicated, the present one projected to 1960. Ratio scale.
The shipbuilding industry, which reached fantastic peaks of construction under the war impact, will doubtless go right back to the levels it came from (see Fig. 7). Even continued subsidies to operators can hardly save it from such deflation; these existed, thanks to the Merchant Marine Act, long before the war began. There is nothing in the long-time growth pattern of the shipping industry to suggest that continued subsidies, of whatever probable volume, will change the pattern to any appreciable degree. World War I raised shipbuilding twentyfold — from about 200,000 to about 4 million gross tons a year. Thereafter the trend prevailing since around 1907, when a decline had set in, was resumed. This peacetime trend will probably be resumed once more as the axis around which yearly shipbuilding volume will fluctuate.
Fig. 8. U. S. Automobile Production, 1900-1944
Factory sales of motor vehicles, with a trend projected tentatively to 1960. Ratio scale.
The automobile industry in early 1946 had a huge volume of new orders, but there was no evidence that these would create a new trend line. The industry’s rate of growth was declining sharply well before 1940, and was closely approaching maturity, as shown in Fig. 8. Whatever temporary postwar splurge the industry may enjoy, the trends revealed in the chart suggested it had already attained, prewar, the bulk of the mature maximum of output. A Fortune estimate of mid-1944, for instance, concluded that a production of 4½ million cars annually from mid-1945 on would completely saturate the market by 1950; a production of 6½ million cars would saturate it by the end of 1947. Actually, of course, all early forecasts of automobile production for the months immediately following the war were vitiated by the occurrence of a strike wave; even 1946 production fell much below the manufacturers’ earlier hopes. While failure to produce more cars in 1946 came from inability to manufacture, and not from the lack of a market, subsequent years should be watched for an answer to an apposite question: Will even “deferred demand,” so called, enable the automobile industry hereafter to get very far above its prewar average production levels?
Fig. 9. Value of U. S. Horse-Drawn Vehicle Production, 1839-1939
Data decennial 1839-1899, quinquennial 1899-1919, biennial thereafter. Data are adjusted for the purchasing power of the dollar, 1926= 100. A trend is shown, projected in dashes tentatively to 1960. Ration scale.
We have here an example of an industry which, even before reaching maturity, was superseded by another. Without the advent of the dynamic automobile industry, which destroyed it, the horse-drawn vehicle industry would doubtless have reached maturity at the levels indicated by the dotted line at the top.
What happened to the earlier carriage industry is shown in Fig. 9.
Grouped together on pages 36-41 the reader will find charts showing the trend in a number of basic activities as various as cattle on farms, corn production, cotton production, wool production, wheat production, malt liquor consumption, lumber production, cotton spindles in operation, coal production, copper production, and lead production. These are shown not because any one of the series charted is particularly significant in itself, but because as a group the charts tell a consistent story, and — most important — because long series of figures are available.
They indicate that maturity has been or is being reached throughout our economic fabric as a whole. In the light of such charts, any talk of the unlimited frontiers that lie before us is a pure expression of faith and hope. The statistical evidence does not support it. Like goldfish nibbling at the glass of their bowl, we have demonstrably been reaching the circumference of our economic world-as-it-is.
This is not a tragic fact; it is merely a fact. We may adjust ourselves to it well or badly. Still more, we may decide as a society that we refuse to live in a world of such an established circumference, and try to break whatever bonds have been holding us there (if we can discover what they are, of what they are made, and how to break them), and then create a world with far wider horizons for ourselves. Some may suspect that this course will be the one that Americans will ultimately try to follow.
There are some newer industries in the nation which still have much of their growth ahead of them. We shall survey a few of these briefly in the following chapter. They should be of interest to investors who are concerned with the long-term outlook, and to young people who are intelligently choosing industrial careers.
There is no reason, however, to assume that the activity of any one of them, or of all of them put together, will change the near-term national outlook suggested by the charts discussed in this chapter.
Fig. 10. Cattle on U. S. Farms, January 1840-1944
Data decennial 1840-1910, annual
