New Britain herald., 1929-10-30

10 it's opinion that American busi-
 ness need expect no adverse results
 from the collapse in stock exchange
 prices.
 Such a view was expressed by Dr.
 Julius Klein, assistant secretary of
 commerce, in widely broadcast
 address last night, which is under
 stood to represent the attitude of the administration in general, and
 coincides with President Hoover's previous statement on the business
 situation.
 No action had been taken by the federal reserve board, in the face of yesterdays prcCipitous decline in security prices, although the board met with Secretary Mellon attend in close touch with the reserve bank in New York.
 The break in stock prices was attributed to the party in power by Senator Tydings, democrat, Mary land. In statement issued through democratic national Headquarters he asserted that fin most cases there is the ironical realization that these great leaders who a year ago were yelling prosperity are trying to find a scapcgoat in he face of IS billion dollar loss in one week of American life"
 Klein Cites Reasons
 Dr. Klein cited numerous circum- stances to support his view that American business is standing squarely upon firm, sound basis.
 The purchasing power of the na- tion is at high level, he said, and may be expected to continue so; the demand for comm oditios has not been affected by the stock market collapse: employm ent is on the in- crease per capita production boom ing; stocks of manufactured goods have not piled up and average com modity prices have maintained con- sistent levels.
 "Regardlcss Of regrettable specu- lative uncertainties" he asserted, "the industrial and commercial structure of the nation is sound"
 Pointing 10 President Hoover's statement of last Friday on the business situation which expressed high confidence in the industrial structure of the country, Dr. Klein said that no intervening circum- stance could be regarded as neces- sitating change in a single word that the chief executive uttered.
 At the most liberal estimate, he asserted, only very small propor- tion of the American population has been affected by the stock mar ket collapse-less than four per cent of the families and less than one per cent of the population by indfviduals-with a "vastly prepon- derant majority of the nation unaf- fected" by Speculative gyratlons."
 From this circumstance. he drew the conclusion that American pur- chasing power and consequent de- mand for mmoditics had been scarcely touched by the fall in se- curity prices.
 Purchasing Power Good
 "Ihe fundamental factor in the general situation of business is pur- power" he said. Real pur- chasing power is made up of wages, receipts of farmers, mcr- chants, professional men. and others and the profits of industry | These factors have not been changed by tn" drop in stock prices. The national income of the United States at this moment is hardly q fraction less than it was a month ago. Established indexes. such as he quantity of output of our farms. | our mines, and our factories and the volume of our railroad trans portation, supports this view"
 Dr. Klein said that it was impos- 7ible for him to forecast what might D" expected on the stock ex change tomorrow and next week." md improper, as well, for govern il'ilt olIlcldlS 10 attempt to do so. ]
 "T'he careful student of Amor'cqn economic life" he continued, equipped with an abundance of can forecast fairly well tn" long time trend of production md of standards of living and even ot many more specific branches of | business or other economic aspects. 1 lie cannot foresoe accurately short . imc changes in economic conditions ' md last of all those speculative . 'hangcs which depend largely on he psychology Of the people or of ! fraction of the people,"