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PORTRAIT OF AN EXPLOSION 
Capital spending grew rather modestly in the tC£"‘s ar.d carty ISSO's, 
z, the la-ge chart at the top show3. The g*cat boom in scenting d-d rot 
gather momentum until 1963, but soon thereafter it began to scar tor 
several different reasons. One was the widespread desme o* business 
to beat the increasing Inflation in costs. That increase Is expressed 
here by the widening gap botween the lines for expenditures in current 
a-d in constant dollars. Note that spending !n constant doi'ars declined 
ir. 1370. (ft is expected to decline again this year.) 
“he hohronta! bars show that the bocm was meat u-cvenly distrib 
ute d ever the U.S. economy. Spending by airlines has ted that cf other 
;• di.rtrias in every five-year period shew.-, however, spend ng by Jho 
fetal transportation group (which a’so includes ra ;roads and trucking) 
Inc gre/.'h only modestly. The industries rcp'ceentcd here account for 
uf 03 percent of all capital investment. 
Capital spending as a proportion cf G.N.P. (chart a! right) fell badly 
in tne depression and during World War II. A'tcr the war it rarc'y cx- 
c"tdcd 10 percent until the m’d-1950's; but s*3rt : ng In 1X5 ti-e fgurc 
t-.-ped 10 percent for six years, averaging 1C.5 percent (versus the 
C f . percent average of 1047-04). Several ccorcmis'.s bel.r.o the new 
level is here ta stay or may rise. They bc.icvc cap ta! has become less 
r.". '.:c"l or is being used loss efficient’/, or that t'c-c arc .new needs 
tv rca.y capital spending-—c g., for poii-tion convels. 
i 
! 
WHERE THE MONEY WENT 
There he/e tv.n sewn! d r* net changes in the cbucturc of c.-.c : tai 
In the cfeity yea r e. Ac the trp chart shews, spend r.g cr p ant 'an; 
spend - o-i equipment (both measured in constant do'i.vc) ‘'em JTJ 
Pram 1‘V-i th'n.'.gh 1030. outlays fer ris.n! actus y grew screw*'.-.! * 
those fvV fotrpmn-t. Thereafter a huge gap in fever cf eqj.nm.a-: e 
Ore ns;e* e’ement causing the gap. the costs of p’ant ccrstn.c: c- 1 
roughly ro percent smee 1963. vc-sus 23 percent for equipment. 
Paec r ’. vends in purchases cf several varieties o* cr,j;?rr:-t a*e 
the chert r .-'ov,'. Equm—,e it associated with autemat an, p„cn :: cam: 
instrumc-:-., has ge.irad the r;ast. Purchases el ar.craft have trtp.ed, these 
cf trucks r.-.d buses have dcub'eJ. 
Purchases o! capita! coeds; n cc->5tant denars; 
C" :o. 
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