The Washington times., 1930-09-11
LEADERS CLASH.
ON CAUSE Of
CRASH

grade, the season tOr liking LLle
blame for the stock market crash
and the business depression is
still open.
Strangely enough no one seems
agreed-alwayS 1t was the other
fellows fault. AS to remedies
there is the same disagreement.
To date nearly everyone has
been taking swipe at Wan
Street, shifting part. II not all, the
blame on stock speculation for the
market crash and business reces-
sion.
A few lieutenants and captains
in Wall Streets army have uttered
faint protests. Now the general
in the person Of Richard Whitney,
New York Stock Exchange presi-
dent, absolves the Street.
Whitney BIames Business
Business is to blame. In Whit
ney's opinion. The business slump.
he asserted, was due to q long
period of overproduction accom-
panied by an artificially Stimu-
lated high commodity price level.
"TO attribute business depres-
sion to stock market panics is
to place the cart before the
horse" he added, "fOr in reality ,
stock panics are an effect rather
than . cause Of trade deprcs-
siOn."
This certainly sounds convinc-
ing. But we have Henry Ford.
one of the worlds leading expon-
ents of mass production. saying
there is no such thing as over
production. Ford is as qualified
to speak for business as Whitney
is for Wall Street.
Both are experts in their lines.
Whitney in stock market opera.
ton and Ford in industrial opera
ton.
Ford believes in the theory that
until there no longer is a desire
o. need to buy product or COM
modify there can be no over.pro-
duction Of that product or COM
modify. The clogging Of the mar
ketS with goods for which there
Is no longer an excuse for being
causes depreSSions, according to
the Ford school of thought.
Whitney does not believe much
in this theory, at least in its ap-
plication to specific instances. So
the question is, when is over pro-
duction not overproduction?
Ford On Stocks
AS for Mr.. Whitney's game
stock brokerage-Ford thinks the
sun has set. It is all played out,
he believes and will never again
be worked on the American peo-
pie. He also is sure stock prices
will never come back to where
they were. People have said that
before, too.
That the Stock Exchange does
not think this way is evidence by
its recent installation Of high
speed tickers, capable Of handling
5000. .000-share days. Ford's old
friend, Thomas Alva Edison, dis
agrees with him on this point. 1t
was Edison who said last year as
soon as the 9,000,OO share day
ticker was perfected the time
would not be far distant when it.
too. would be unable to keep UP
with trading.
To get back to the subject Of
depreSSions and stock panicS, we
have had the opinion Of the
broker and industrialist. Let us
see what the banker has to say
on the subject. Benjamin M.
Anderson, jr., Phi. D.. economist
of the Chase National Bank, is
generally regarded as the worlds
largest banks spokesman on mat
ters of this kind.
Cheap money and unlimited
bank credit available for capital.
uses and speculation were the
causes. That is the way DR.. An
derson views it.
"There is no intOxicant more
dangerous than cheap money
and excessive credit" DR.. An.
dersOn states, "and the mar
veIOus thing is. not that we
have had a wild orgy Of Specu.
lation, but rather that the in
sane speculation did not begin
sooner"
Enter the New Era
This period was from 1922, with
an interruption in 1923, until
early 1928.
Through the whole Of this
period our business community
kept its head" he continued.
"Cheap money didn't lead our
businesses to accumulate exces-
Sive inventory or speculate in
commodities. Cheap Opey.
didn't lead to excessive borrow.
ings ON short term by our
businesses"
In 1927 men calculated before
they bought securities. DR.. An
derson points out, but in 1928 and
1929 they ceased to calculate
they were in a new era"
Wealth was not to be made
by the pr0saic process OF work
and saving out Of income, wealth
was rather to be made By ris-
ing capital values, and business
was to be kept active by the
spending of profits made
through rising capital values"
Thus from this 1t would seem
the cart might not be before the
horse If the blame Is at least