Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-09-27
DAWES SEES 1881
DEPRESSION END
Ambassador Tells Irish Bust.
ness of World Is Now
Recuperating.
n the Associated Press.

iunchS0n AT the City hAu t0uay. pre-
dieted the end of the current world
wide industrial and trade depression by
the Summer or Fall Of next year.
THE business fool of 1899 was he
who had no fear" he said.
The Ambassadors address was an
analysis of present worldwide indus
trial and trade depression, its cause
and its probable Duration
II. Gen. Dawes said he would not fall
into the common error Of travellers OF dis
clssing questions of local industry, but
that In Belfast, which is q center of
worldwide business, he could properly
discuss the present worldwide depres-
sion, since, as nearly everywhere else,
it Ia having its serious local effect.
Ambassadors Address.
The Ambassadors address practically
b full follows:
"a world depression in business is
due always to sudden change in the at
titude of the worlds peoples. This
changed attitude Is often explained in
different countries Is being the result
of diverse causes, including unWise ma
tional policies, undue speculation, over
production, underconsumption and poll
teal or social upheavals.
These. however, are more the ef-
feets of this change Of general attitude
than the causes of it, 1t is often easier
TO conclude that one catastrophe or
error In business Is the cause OF the
following one, rather than that both
originate from one underlying cause,
In the United States, for instance, as
we'll as elsewhere. a major depression
in business has always been preceded q
few months before by stock panic
induced by oyerSpeculatlon. Many
have assumed that the collapse of the
stock market caused the later depres-
sion. Many have assumed, too, that
this correct forecasting Of business
trends by stock SPECTATORS Is evidence
OF the composite intelligence OF the
specializing class.
Caused by Same Thing.
Nothing could be more untrue, for
not only Is the specializing class as .
whole no wiser than those In other
businesses, but no intellectual judgment
of the future can always prove 10 be
right and in this case general unloading
of stocks months before general buSt-
ness Is materially affected always oc-
ours. The truth is that stock market
depression and the following business
depression are both caused by the same
~thing-a fundamental change in the
from sudden loss Of confidence on his
part. the first public manifestation Of
which occurs on the Stock Exchange.
1.-THE reasons why the Stock Exchange
gives this first evidence Of change IN
general attitude are simple. Business
on the Stock Exchange Is transacted
under unique conditions conducive to
almost immediate public registration of
general lack Of confidence in values.
On the Stock Exchange when conf
-dence in the future Is rampant every
facility exists for SPECTATORS TO get
easily into debt, and In proportion TO
the thinness OF their margin and larger
amount Of stocks they carry upon given
esPls. invested t e margin the . sEgsr
Contyarywise, when their optimism
~falteFs, the quicker viii they run from
prospective loss necessarily proportion
"The man with merchandise TO sell,
-on the other hand, when he commences
pose Of 1t gradually. He Is not gen.
-eraily under the necessity when the
market drops. Of Immediately putting
up additional margins Of security TO
his creditors II he prefers not to sell
Just then, When the market slackens
he does not have to fear being sold out
by somebody else if he prefers TO take
his own time IN selling.
Lessons More Abrupt,
Moreover. In general business, so
much Of which Is concerned with sup
plying Of human necessities, there iS
q greater continuance In demand and,
In consequence, in times Of depression,
"a slower market decline than in stocks
-demand, for which the lessons are more
abrupt. Nevertheless, the fundamental
cause Of the decline in both ia the
same
''Let us consider this fundamental
cause. Comments of learned economists
differ 50 widely in respect TO 1t and the
probable time Of continuation Of the
present worldwide business depression,
that We laymen may be excused for
seeking simpler explanations. The
qualities Of composite mankind are but
qualities Of the average individual COM
posing it.
: "As the average man In his personal
or business activities occasionally de-
parts from the usual, so does mankind.
As man sometimes cuts loose from
safe business moorings so does man
kind. AS a man sometimes embarks
upon unknown and dangerous seas Of
speculation and unsound enterprise, so
does mankind. and what then happens
10 a man happens to mankind.
(. I'VE don't know why q man goes
wrong, but we have no difficulty in
knowing when it Is thus with mankind
After a hectic period induced by re-
grettable combination of oyerconfi-
-dence and misdirected energy reaction
and return to a normal view of things
causes the first business collapse, then
"a period Of stagnation and then .
period Of recuperation.
In Stage Of Recuperatien.
''The business Of mankind Is now in
q stage of recuperation. We know that
In a general way under the law of
action and reaction periods of under
activity in business are somewhat pro-
.portional In length 10 periods of ac-
-tivity preceding them. That time is
considerably over year behind us when
the public suddenly turned over from
exhiliration and that confidence in the
future which is the basis Of prosperity
TO that lack of confidence which Is
the basis of business depression.
IT do not think that the business of
the world left its normal trend earlier
than in 1927, two years before the col
lapse Of prices In 1929 on the leading
stock exchanges of most nations. If
i am right in this, other things being
equal, may we not hope to see normal
trend OF world business resumed by
Summer or Fall of next year, which
VIII mark the end Of the after two
year period?
Exceptional local conditions may in
this or that country retard or adj
vance the healing effect of returning
world business confidence, but nothing
ness recovery. The business fool of
1929 was he who had no fear. The
fool now is he who has no hope"