Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-28
Trade Trend and Outlook
Los angeles Findncier Lays Business Difficulties to
OverprodMction of Commodities and Failure
to Control Distribution.
BY HENRY M. ROBINSON,
Chairman Security First National Bank
Los Angeles.

AS Told to Earle z. Grove.
If you should call the worlds leading
economists around a conference table,
don't believe they would settle the
questions of responsibility for the in
ternational business depression or agree
on the best courses of action for allevi-
ating its consequent distress.
Each recognized student of the prob
lem has his own ideas on causes and
remedies, and it is doubtful If such a
conference would unite on the proper
weights to assign to the various factors
listed.
The shortage Of, or, If not that, the
lack of mobility in the worlds gold
supply-the> argument advanced by
some Of the able British economists as
the principal reason for international
business depression-has been widely
discussed.
Yet there are q great many able
economists and men of wide financial
experience who insist that the gold stu
alton is not by any means the most
important factor, but rather that over
production of commodities Of all kinds
is the major difficulty.
Profits in Sales.
They take the position that forced
draft" sales of manufactured goods
have resulted in net profits through the
last few years which have in the main
been invested in additional plant ca
pacity. This overexpansion of capacity
in turn resulted eventually in distinct
overproduction.
The aftermath Of the war expansion
in production of foodstuffs, rubber and
like products has, as is easily recognized
been the cause of the long continued
low prices on these products. The fail
ure of artificial measures to control the
distribution of certain products con-
tributed to price generalization.
Other authorities will attribute the
existing situation to causes that have
no bearing on the two Just mentioned.
The restoration Of the gold standard in
England, to maintain its international
commercial prestige, is said by some to
have come too soon for the good OF
that country's own business and for the
part England should play in world
affairs.
The collapse in the price Of silver, due
to the action Of the Indian Commission
and conditions in China, Is another
factor which has undoubtedly con-
tributed to the present situation. as the
purchasing power of both India and
China has been seriously affected.
That the tariff barriers have been i'm
portant obstacles in the way of interna-
tional trade Is the contention Of most
economists. The Stoppage of loans and
advances abroad by private investors in
the United States has restricted the
purchasing power Of the other nations.
In the United States the increased con-
sumption of luXuries, as compared with
that of necessities, in the last few years,
has been very marked, and it Is be-
lieved that the higher the percentage
of luxuries in use by people the more
sensitive is its economic structure to
adverse influences
Mental Attitude Changed.
'Domestically, as I view it, the most
important factor in the situation today
is the reversal in the mental attitude
of nearly all the people Of the United
States in business life when compared