Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-28
END OF DEPRESSION IS SEEN
ON STOCK BREAK ANNIVERSARY
Period of Recovery Has Been Long in
Making It's Appearance After Drastic
Liquidation In Wall Street.

falling commodity prices and stocks
went into protracted decline, carry
ing them close to the lows of the
preceding Autumn. A rally in the
market in July came to grief in early
August when the drought became a
serious threat to the farm States.
With the depression in both stocks
and business having endured nearly a
year, however, it seemed reasonable to
suppose that substantial seasonal re-
covery might come in the Autumn.
Gains in steel mill operations and re-
ports of a turn in retail sales seemed to
promise it, and stocks started upward
again, only to turn downward early in
September, when business and trade
statistics foreshadowed that eXpecta-
| tions of recovery would again be diSap-
pointed. Share prices continued down.
hill until levels we'll below those of a
year ago were established. At last
weeks bottom the general level of share
prices was the lowest in about three
years.
Depressions Are Similar.
There is much to be said in the way
of alibi for the overoptimistic expecta-
lions of November, or again last Spring,
sion in economic history has manifested
| about the same symptoms, but the dag
nosis in each case has finally discov-
cred distinctive ailments, and, in the
present case, the causes Of the trouble
have been obscure and the diagnosis
has been extremely difficult.
In the first place, the crash was not
preceded by any serious cases OF in
solvency such as had provided warning
signals in the past. Furthermore. the
preceding depression was eight years
old, and the salient weakness of that
time, huge and burdensome stocks of
merchandise, was lacking. The situation
was obviously different.
Going farther back into Wall Street
experience. it was necessary to go back
to 1907 to make any sort OF COMPARE
son, for such troubles as occurred In
the years 1920 were attributable to
the extraordinary influences of the
World War, and were therefore clearly
| not comparable.
The history of 1907 did not help much.
| for the banking situation had been so
vastly improved since that time as to
lead to the conclusion that the troubles
of 1907 could never again be expert
enced. Going still farther back, the
| troubles of the 1905 were largely at
| tributable to instability Of the currency,
and the threats to the gold standard.
The basic difficulties Of this 1929-3p
| period appear, now that the situation
| has been more thoroughly analysed, to
| be due to over-expanslon OF plant ca
pacity. Save In few instances, main
ly ra wmaterials, there have been no
burdensome inventories of merchandise
on hand.
End Of Slump Seen.
But productive capacity has been
| speeded up beyond the requirements of
consumptive capacity. There has been
very plentiful capital, and it has been
freely invested in the building of fac
tories and the digging OF mines. It was
suddenly discovered that the goods
| could not be consumed as fast as pro-
duced. so production was curtailed and
a painful period of correction and adj
| justment has ensued.
At least in point of duration, previous
periods Of depression have had much
in common, and comparisons indicate
| that the present period must be ap-
! preaching its flag end.