Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-20
Breaking the Vicious Circle.

The first of the series of the Presi-
dents conferences on the Nations bust
ness, held yesterday, resulted in sSSur-
ances by representatives of the great
railway systems of the country that
there will be no slackening of construc-
ton works in consequence of the recent
slump in the stock market and no re-
duction in employment. On the con-
trary, there will be a heavier rather
than lighter program Of improvement
projects, a program involving the en-
penditure of no less than a billion dol
lars.
This is one of the strongest possible
guarantees of continued industrial pros
perity. 1t is not an artificial stimula-
ton, for the works involved in the pro-
gram are all needed and their execu-
ton eventually is essential to the proper
maintenance and expansion of the
transportation system of the country
Yesterdays conference assured that
there would be no postponement of
operations.
Ais 10 III Tic HlUSI
a carrying out of the principle business
as usual" despite the shock of the col
lapse of the speculative market. 1t is
positive proof that there has been no
loss of actual values in the recent
slump, no destruction of tangible wealth.
Some billions of dollars in paper prof
its have been swept away. A good many
people have found their savings, I'M
wisely invested" in stocks on a margin
basis, transferred to other hands. To
them this has meant loss, to others
it has represented a gain-the loss and
gain occurring at a gaming table. But
up to the point of the cessation of the
sensational decline there was no slack
ening of business, no lessening of pro-
duction, no diminution of the buying
power of the country.
The danger at this crisis was that
feeling of poverty would develop and
spread, starting from those who had
suffered in the speculative market and
marked by curtailment of purchases for
the less essential commodities, the lux
line on a considerable scale inevitably
affects trade in general, cuts off en-
ployment as production is reduced, sets
up condition of real privation on the
part of those who do not indulge In
luXuries, but are, in their idlencss, I'M
able even to obtain the necessities.
Thus is established the vicious circle
of the market slump, the sense of in
security. the feeling of poverty, the
checking Of business, the closing of
mills, the panic.
President Hoover's move to prevent
the spread OF this spirit Of insecurity.
to break this vicious circle, is a prac-
teal one. Yesterdays conference of the
Chief Executive and the railroad heads
assures that one Of the greatest of the
country'S industries, that of transportn-
ton, will not lessen activity. There will
be other conferences. Indeed, a second
has already been held, that of the Fed
eral Reserve Board and its advisory
council, with the President, resulting in
an assurance being given to the country
SNOAAASoo uLid DollhlIiS
are sound and that the rediscount rates
will not rise, but will be reduced. This
guarantees greater ease of money-find-
ing for the operations that are to be
undertaken by the transportation cor
porations, without any slackening OF
security.
The immediate purpose of these con-
ferences is to oispel pessimism. That
procedure has begun. The country has
reacted positively TO the presidential
proclamation of sound economic con-
Giticns, which was based upon an init
mate and complete knowledge. The
railroad companies have done their
part. Other industries will doubtless do
theirs. 1t is up to the people to carry
on TO the limit of their buying power,
TO maintain the standard of living thai
they have gained during the years OF
good times"
--~-~----- = ~s0H-S --------