Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1895-01-07
INSTRUMENTATION,

A business man was more of a philoso-
pher than he supposed when he made this
shrewd remark: americans have been
overproduction. Is it not time for us all
to pay some attention to the more serious
evils of underconsumption?" With a
Scent rate for cotton and a downward
tendency in Liverpool that may carry it
lower; with the abnormally low price Of
wheat creating feeling of dependency
and CONSERVATION among farmers; and
with commodities of all kinds cheaper
than in former years, yet with light and
variable demand for them at any price,
the conviction is forced upon rejecting
minds that shrinkage of purchasing
power in the greatest market of the
world is vastly more disastrous, not only
, toAhe United States, but also to Europe,
than any surplus of productive energy
can ever be. Two years of business I'M
certainty and depression have produced
conditions of underconsumption in great
nation which in its prosperity was the
heaviest buyer both of imports and do
nestle products and manufactures. Re-
coyery from those conditions is necessarily
slow and difficult because it implies Il
restoration of the purchasing power Of the
average consumer.
The ordinary free trade economist has
an easy way of disposing of such phenom-
ena as illustrations of the universal law OF
supply and demand These is more cotton
and wheat raised, he will say, than the
world needs, and consequently prices have
folI h,1t hon thprn will bp a
diminished acreage of each, and the evils
of overproduction will be counteracted.
Formulas like. these do not go deep enough
to reach the level of uuderconsumption
Although the crops of cotton and wheat
are phenomenally large the supply would
not exceed the demand so enormously ii
the average consumer could buy on the
same scale as in 1892, the prosperous year.
But this he cannot do, for his earnings
have been reduced, his savings have been
impaired, his employment is uncertain
and his prospects are gloomy. He is wear
ing his old clothes, living on cheaper food
and less of it, and cutting down his liv.
ing expenses in many ways He is the
consuming unit, and he buys less than he
did. Multiply him by 10000, 900, and there
Is the American market, with a shrink.
age of purchasing pgwcr which has disas-
trously affected all its own industries and
many of those of the world. There are
smaller sales of home manufactures and
less work and lower wages for workers;
and undcrconsumption of food and cloth
ing is the normal result.
With cotton at ) cents and the price
dropping, southern planters are in a state
of bcwilderment and CONSERVATION. Bank.
ruptcy and impoverishment stare them in
the face if the present rate, which they
assert is below the cost of production, be
maintained. In like manner the wheat
producer sees ruin confronting him in the
continuance of low prices for grain. The
southern planter and the western farmer,
the two agents who We're largely instru.
mental in ordering in 1892 a reversal of the
industrial and protective policies of the
nation, are now suffering directly from
the evils of underconsumption. Manu-
featuring interests were the first to feel
the effects of business uncertainty and the
losses of wageearners. The great agri-
cultural producers south and west are
now learning to their cost that the marked
decline in the purchasing power of a
prosperous nation reacts necessarily upon
cotton planters and wheat farmer.
If cheapness of food and clothing were
the main factors of national prosperity
Americans would now have full cause for
gratitude to Democratic tariff meddlers
But when -four is low and cotton sells
below the cost of production, and every
other commodity is cheap because the SUP.
ply runs far beyond the demand, they need
not be thankful. The practical experience
of the last two years has taught Ameri-
cans that, whatever may be the truth
about free trade or the protective policy.
nothing can take the place of national
prosperity under which all classes of the
population are employed at good wage,
and all industries are in full, unimpede.
operation. These are the conditions which
develop the purchasing power of every con
sumner and make the American markt
the main safeguard against overprodu
ton at home and abroad.-[New Yer
Tribune.