175

 The ratio of capital to output for the period

1850-1958 is shown in Table 14.

 TABLE 14

 CAPITAL-OUTPUT RATIO, 1850-1958


 Year Ratio

 1850 2.8

 1900 4.7

 1929 4.2

 1945 2.7

 1958 3.8


 Source: Goldsmith, "National Wealth:
 Estimation," p. 57.


 A rapid increase in capital relative to output

 took place during the last half of the nineteenth

 century. The ratio slipped slightly by 1929 and then

 fell to a very low level in 1945 as industry was

 pushed to its capacity to produce large increases in

 output with a limited stock. By 1958, following large

 capital expenditures, the ratio had again risen to a

 level just below that of 1929. The figures are

 exactly what would be expected from our considerations

 of changing metals demand.