The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1928-07-06
SPENDING, SAVING AND CONSUMING
New York Times

Not long ago. Wall Street mas much impressed by a
series Of articles written in collaboration by Messrs
oster and Catchings and leading to the conclusion
that the problems of industry could be solved only by
the consumers decision to less and spend more
ne actual contention of the writer's not quite
sweeping as that; they admitted the theoretical propr
ETY. OF reduced spending and increased saving when
aggregate consumers demand should have outrun pro-
ducers' facilities. But the gist of the argument was
that the present industrial dilemma is producing ca
pacty in excess of visible consumption The citizen
VINO spends his income increases consumption and
saves his income and invests it. directly indirectly
IN securities issued by manufacturing concerns to en-
large Their plant he thereby helps to increase produc
tive facilities while reducing potential consumption
II this conception Of the duty of the thrifty was
somewhat startling to disciples of Poor Richard and
the Parable OF the Talents it at least fell with the
mood prevalent on Wall Street and in such industries
a. had begun to wonder where they would find mar
ket without concession in prices for their ambitiousy
extended output. To dsinterested persons. however
the reasoning seemed entirely academic Their natural
comment that the average citizen spends or saves
personal character or circumstances. Therefore, while
the argument that he ought to adjust his use of sur
plus income to preserving equilibrium in trade might
% unanswerable economically, practically it would get
In the current Century magazine, the same authors
return to the discussion. but with good deal of quail
tication individuals as we'll companies they now
admit must save" The way out of the dilemma lis
not to abandon the ancient virtue of thrift Neverthe
unless the deficit is made up in some other way" How
is this to be done? Their is by "higher real
wages. Ihey even concede that "use of new money
in capital facilities may help to prevent over-produc-
ton, through providing consumers with money
wherewith to buy goods before the facilities pro-
duce any goods" But this conclusion strikes the
reader almost as anticlimax to the original argu-
ment for spending versus saving. It is far from
new discovery in economic philosophy that it has
been the consciously unconscously accepted principle
ever since the beginning Of modern industry.
Neither can the contention be called that judi
c'ously planned construction of public works will help
20 so!ve the over-production problem. The idea of
speeding-up work on public buildings and roads and
other government facilities, by way of relieving or
avertlng unemployment, has been actually put into
practice for considerably than a century, The
to be better planned is in line with recent formal dis
cussons by various branches of our government
Messrs. Foster and Catchngs emphasize and quite cor
recty the absence Of satisfactory data on unempoy
nent such IS could be used in framing policies But
that matter also subject of warm debate in the
United States Senate several months ago, and the
statistics will presumably be improved Even the con-
entien that corporations ought to lay in supplies at
time Of trade reaction is familiar. When Hartman
controlled the Union Pacific his practice of ordering
rails and rolling stock at times when prices were low
,ecause Of Industrial depression attracted great
aon The reason why all other companies did not |
!aitate It was that the hard times which had
nsapened the market for supplies had also reduced
Undoubtedly the practice Of "distrbutive buyins.
adjusted to industrial conditions contains possibilities
4 further development. The Century article urges
.oey OF publcworks expenditure to the needs Of in
lustry and the authors write enthusiastically of the
probable response from trade IF the United States
government announced it, intention use all its fiscal
aonths. n order 70 achieve property" They do not
scuss the probable response supposing that the gov
snent at some subsequent juncture should announce
hat i had sssn 81 to rsvssss it. plans.