The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1927-12-09
(Official City, State and County Newspaper
Hoover on Prosperity

(Official City State and County Newspaper)
Hoover on Prosperity
Has the business cycle been abolished, or will
we have periodic repetition or old-1asMoned
'hard tines?
Here is the opinion of Herbert Hoover, as
given in an interview just printed in the Maya
zine of Wall Street:
Il can say that believe that the profound
forces which have been in motion III the whole
business world, particularly during the past ID
years, are making for greater stability, ana
have, in my view, greatly mitigated the vlo-
|. lence of the business cycle.
ut seems impossible that the old terror
stricken panic can ever return, and fervently
hone that those periodic stretches of heart
breaking unemployment, back-breaking prices
10 farmers, bankruptcies to business men
through no fault of their own, are on their
way to history if we only continue wise.
MANY factors contribute to this hope. The
Federal Reserve System has already proved it's
ability to guarantee against money panic. 1t
gives large measure of assurance OF con-
tinuous flow of credit. Business concerns have
today larger working capitals Of their own,
j. G., less proportion of inventories carried on
bank loans. All this contributes to freedom
from interruption of production and distribu-
ton through accidental or artificial restriction
of credit
Zone Of the supposed broader causes of the
business cycle was that in the rise from a
slump, increased employment brought larger
savings and profits, that these savings and
profits sought employment in expansion of in
dustry which in time brought about over-ex-
pansion and over-production, thence the slump
again. One might conceive this to be true if
the variety of business was limited and If in
creased production did not bring about de-
creased costs and consequent wider consump-
ton. If all savings had to be poured back in
to expansion of the industries from which they
! were derived, and if there we're no expansion
in demand for their products, this would prob
ably be true.
IF, on the other hand, the demand for capt.
tai was for new industry, such as was recently
the case in automobiles and still is for electrical
power and apparatus, foreign loans. better
/ homes, processes of production in old indus
tries, then this mechanistic theory would be
less applicable. This is to great extent TAX
/ ing place. We have an increasing skill in bust
ness and technical direction, in scientific dis
covery and invention due to the enormous
/ spread of education. Thus We have constantly
new fields for investment in new products meet
i ing new satisfaction.
1 I'VE have large growth Of cooperative sense
4 IN buslness-an increased feeling of mutual
i responsibility and an undoubted decrease in
!. wasteful labor conflicts. Our foreign trade has
4 to production and greater variety and spread
!. OF customers We have shifted our merchandise
Il ing methods TO a great degree from advance
i orders to hand-to-mouth buying-making for
I less inventories and thus less hazards in price
/ movements.
{ FINALLY, we have enormously improved our
1 private and governmental information services
1 as to economic movements. We now have a LOT
I o. useful statistical and economic lighthouses
4 by which navigation of business becomes more
I secure. We also have some new currents II
business which, believe. are really of mino,
Importance that may work against these stab
/ ilizing forces.
i That all these stabilizing forces amount t.
/ abolition OF the business cycle no one woull
say, for some part Of that movement is due K
4 the imponderables- politics, internal relations
\ fear, optimism, ETC. Certainly we have had ar
unprecedentiy long period of stabiity-and tn,
1 fundamental forces of stability are growing. Il
1 any event, none of the signs point to Stun,
at the present time"
( With another presidential election coming on
I Hoover's confidence as to the future seems re
4 assuring.