Very Vital Statistics

The best sign of the long-range growth of the economy is the birth rate of new businesses. Last week there was plenty of evidence that the rate was the highest in U.S. history. Dun & Bradstreet reported that in August establishment of new business incorporations rose to 14,329 from 12,234 a year earlier. For the first eight months of 1959, new incorporations amounted to 133,891, almost a third ahead of the comparable period of 1958.

Even more of an upsurge was shown by the birth rate of all new business, both incorporated and unincorporated. In the first six months of the year, the Commerce Department estimated that the nation gained 55,800 businesses, more than in all of last year. The increase brought the total of all U.S. firms to a record 4,645,000.

Despite the enormous growth of giant corporations, which pessimists predict will kill off small companies, the U.S. now has a third more independent businesses than it had at the end of World War II. They are growing faster than the population; the ratio of business enterprises to the general population is one-fifth higher than in 1900.

While every broad segment is expanding, the expansion is relatively slow in manufacturing (total number of firms up only 3% over 1951), faster in transportation, communications and other public utilities (up 18%), and faster still in construction (up 26%). In trade, the supermarket has cut the total number of food and related stores by 14%, but with many more new products to be distributed there has been an 18% expansion in the number of wholesaling concerns. Since 1951, old-fashioned general merchandise stores have declined 9%. But with more and more people on the go, restaurants are up 4%, automotive retailers 20%. Meanwhile, U.S. consumers, spending more on their persons and their surroundings, have caused the number of service trades firms to expand 18%. A,nd the rise in property ownership has caused the ranks of finance, insurance and real estate firms to expand 23%.

Through it all, Commerce points out, the small businessman not only survives but predominates. Three-fourths of all U.S. business concerns employ fewer than four people. In two-fifths, the concern consists of the boss himself.

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