2- further declines and even the soft goods industries finally participated in the downward trend, though to a lesser degree. So, here at this Conference, the immediate experience of deflation has replaced the long-range threat of inflation as a principal concern. The latter danger has not been absent from our thinking, but we have concentrated our attention for the most part on the problems of the moment. We have seen that there is unmistakable evidence that we are experiencing a recession and that this recession has hit manufacturing and mining the hardest. This fact has been confirmed by the remarks of many of those participating in this Conference, and representing such industries as non-ferrous metals, steel and steel fabricating, petroleum, machinery and equipment manufacturing, chemicals, clay products, paper and paper products, and others. Evidences of temporary excess capacity in relation to the market demand of today is present in many quarters. This is particularly so in the durable goods industries, but there is also some evidence of it appearing in the non-durable goods industries. This over capacity, coupled with a rapid inventory liquidation, has caused: 1. Gross national product to decline rapidly. 2. Halted at least temporarily price inflation. 3. Caused serious illness in the capital goods sector of our economy These factors have accelerated a trend that has been in evidence for some time. The profit squeeze is on in more and more industries, and this fact was again brought forth time and time again by participants in our Conference. 1. Universally we are faced with constantly increasing costs, with rising labor costs the principal offender.