Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-09
.DEFLAT|ON IS HELD /,
/. PRIMARY CAUSE OF .
TRADE RECESS|ONS
Underconsumption Results
From Sharp Decline in
Purchasing Power.
SURPLUS CURTAILMENTS E
HAVE NOT BEEN DRASTIC
Modern Machinery Cleared to Pro-.
duce More Than Public Has
Need For.
By JOHN +. sINcLArR.


NEW YORK, November s.-That ever
recurring questions overproduction
cause or an effect?--continues TO absorb
| the attention of the business world
Secretary Melons statement that OVER
production OF certain basic commodities
both In the United States and abroad
was the cause of the present depression
brings 1t again to the front.
Here are some interesting figures on
the subject: 81
American oil wells are capable Of
producing over 100000 barrels q day.
as against the present market demand
OF under 100000 barrels. American
coal mines can produce 10000 900 tons
year TO supply the American market,
which needs but SOC, ZOO, 900 tons. The
steel industry with 100000 tons ca
pacity win have q production this year
Of about 40,00O,000 tons, according to
James A. Farrell Of the United States
Steel Corporation. The Wool Institute
reported In 1927 mill capacity Of
duction OF $3.50, OoO, 900. American shoe
factories are equipped to turn out 9O0,-
100000 pairs Of shoes a year, while
Americans buy scarcely 800, Oo0, 900 pairs.
Effects Of Surplus.
There is no question here regarding
| overproduction capacity.
"Overpr0duction Is q dOuble-edged
sword, striking the worker through UNI
| employment, the business man and the
farmer through overhead costs, and cut
| ting its savage way through every social
class" says Stuart Chase, who sees
chaos unless the people of the United
States direct production from q master
blueprint Of all industries.
But overproduction, in my opinion, Is
the direct result Of the stoppage Of
business due to defiation. Actually,
overproduction Is more apparent than
real. What Is wrong Is underconsump-
| ton and the cause of this undercons
sumption Is the decline of purchasing
| power due to dedation. And also to
| the lack of confidence which must
necessarily be associated with declining
| prices the latter condition being entire
" due to defiation.
Think It overl
Work Fund For JobIess.
Steward r'r0sser, banker, is busy
raising 100000 by voluntary subsz
cription In New York City to provide
! jobs for 80 weeks to unemployed heads
| of families.
Originally, Mr.. Prossers committee Of
New York business men set out to raise
$150,000 day, with the idea Of giving
10000 uen i've days work Q week ct
So q day throughout the Winter. But
it was not enough So now the commit
tee Is asking for 100000 day to pro-
vide 100000 days Of employment ct So
a day between now and next Spring.
New York City has $780, 900 persons
out Of work-the greatest number IN its
history.
AS q result, Americas largest city ID
experiencing, according to Mr.. Prosser,
what amounts TO community dis
aster."
The larger business men are being
appealed to daily, and subscriptions viii
be taken from every individual who
cares to give" says MIR. Prosser. We
intend to seek funds from individuals
Of wealth, from corporations, and SMALL
er gifts from employees who are now
at work and in 8 position to aid the
less fortunate"
This New York banker, who Is chair-
man of the Bankers Trust Co, was
born In Buffalo, SO years ago. He went
to work after receiving q common
school education. with the Equitable
Life Insurance Co.. of the United States.
In 1897; he became vice president of the
Aston Trust Co. Of New York. Fivo
years later, he went to the Liberty
National Bank Then, in 1914, he
assumed the presidency Of the Bankers
He is q member of the board Of
directors Of many Of the largest Ameri-
can corporations including General
Motors, kennecott Copper, Chase
securities, General Electric, American
Surety Co. and International Nickel.
mo banker In the city Is more popular
than Seward Prosser. He Is the ideal
man Tor this most important but thank
less task at this distressing time" said
another New York Banker to me.
Price Of Electricity.
Unqestionably, the price Of household
electricity Is becoming one of the most
important issues In American life, es-
pecially political life.
During the recent campaign, q poll
teal circular directed to housewives in
Westminster County, N. Y, the abode of
many rich New Workers, called atten-
ton to the difference in the price paid
there for electricity and the price paid
in Ontario, Canada.
According to the circular, the On
tario housewife had for $40 o month
the. following electrically operated de- .
vices in her home: Light, range, ice box,
nat iron, t0aster, .ironer, vacuum clean
er, radio, washable machine, fan, waf1ie
iron, curling iron. chatting dish and
warming pad.
Westchester County, this same $3.40
would purchase only electric light. In
fact, 1t was pointed out in the cir
cular thai the 1sew Rochelle noussyife,
who operated all the devices merroned
above would have q monthly electric
bill of $25.63, that the same services In
Yonkers, q short distance away would
cost $21.45, In New York City only
$19.75, in Poughkeepsie, further up the
Hudson River, $12.53 and but $500 In
Albany.
The circular is credited with having
been very effective as q vote getter
among women, especially In those dis
tricts where the higher prices prevailed.
Because Of this, the whole public
utility question Is likely to be discussed
pretty thoroughly In the New York
Legislature later.
In fairness to the company which
supplies Westchester County, N. r., with
electricity, It should be said that tn
company now pays the county abou
81, 250, 900 annually while In Ontarx
public utilities are tax free.
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paper Alliance)