American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. Capital Shortage You all remember the recession year of 1974. You remember the inflation that accompanied the recession and boosted your food bills in the supermarket and your expenses for the car and home more than it raised your salary. And you remember the sky-high interest rates that shook the utility industry, floored the housing industry and led to the cancellation and delay of many investment projects. And you remember reading about the hike in the nation's unemployment rate. Perhaps you yourself were unemployed; more likely you knew of friends and relatives in other industries who were laid off in the worst recession since the great depression of the 1930's. In short, you all remember 1974 as a year in which the economy did poorly and in which the standard of living for the average American slumped. If you're able to visualize a string of years just like 1974, then you can imagine what a shortage of capital would do to this country. Not that the recession of 1974–1975 was primarily caused by a shortage of capital; it was primarily caused by a shortage of capital; it was not? But the economic symptoms of this last recession mimic those that would result from a capital shortage. During a capital shortage not enough money is around to adequately finance industrial expansion. Interest rates skyrocket and necessary investment projects are cancelled or delayed. Industrial capacity consequently becomes inadequate, and this inadequacy leads to shortages and soaring prices. Unemployment rises, mainly because economic growth is too slow to completely absorb the entry of millions of new workers each year. Thus, a shortage of capital retards economic growth, raises inflation, boosts unemployment and in general lowers the standard of living. Objective and Format Some businessmen fear that this country will experience a capital shortage in the 1970'S and 1980's. They feel that the enormous and growing capital requirements of the oil and gas, coal and electric utility industries will make this outcome inevitable. Are their fears warranted?