Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-03

CLEVELAND, Ohio, October 81
President Hoover, addressing the Amer.
lean Bankers Association Convention
here yesterday. said:
Members of the American Bankers
Association and guests:
Il am glad to meet with this as.
sembly of representative bankers from
every State and almost every county
of our country. During the past year
YOU have carried the credit system OF
the Nation safely through a most diff
cult crisis. In this success you have
demonstrated not alone the soundness
of the credit system but also the ca
pacity OF our bankers in emergency.
I'VE have had a severe shock and
there has been disorganization In our
economic s5--il which has temporarily
checked the march of prosperity. But
the fundamental assets of the Nation,
the education, intelligence, 'virility and
the spiritual strength Of our 100 ,000, 900
people have been unimpaired. The re-
sources of our country in lands and
mines are undiminished. Scientific dis
covery and invention have made further
progress. The gigantic equipment and
unparalleled organization for production
and distribution are in many parts even
stronger than two years ago.
States Problem of Today.
Though our production. and con-
sumption has been slowed down to IS
or 80 per cent of normal, yet by the
very fact of the steady functioning of
the major portion of our system do we
have the assurance of our ability and
the economic strength to overcome the
plete the restoration of order in our
ranks and to intensity our efforts to
prevent such Interruptions for the
future.
And it is not a problem in academic
economics. 1t is a great human prob
lem. The margin of sfrinkage brings
less of savings, unemployment, priva-
ton, hardship and fear, which are no
part of our ideals for the American
economic system.
This depression is worldwide. It's
causes and its effects lie only partly
in the United States. Our country en-
gagged in overspeculation in securities
which crashed year ago with great
losses, A perhaps even larger imme-
date cause of our depression has been
the effect upon us from the collapse in
prices following overproduction of i'm
portant raw materials, mostly in foreign
countries. Particularly had the plant
ing of rubber, coffee, wheat, sugar and,
to lesser extent, cotton expanded be-
yond world consumption even in normal
times The production OF certain
metals, such as silver, copper and zinc,
had likewise been oyerexpanded.
Buying Power Reduced.
"These major overexpansions have
taken place largely outside of the
United States. Their collapse has re-
duced the buying power of many coun-
tries. The prosperity of Brazil and Co
lombia has been temporarily affected
from the situation in coffee; Chile,
Peru. Mexico and Australia from the
fall in silver, zinc and copper. The
buying power of India and China, de-
pendent upon the price of silver, has
been affected. Australia, Canada and
the Argentine have been affected by the
situation in wheat; Cuba and Java have
been depressed by the condition of the
sugar industry: East India generally
has suffered from the fall in rubber.
These and other causes have pro-
duced in some of the countries affected
some political unrest These economic
have echoed in slowed
down demand for manufactured goods
from Europe and ourselves, with inev-
table contribution to unemployment
But the readjustments in prices, which
were also inevitable, are far along their
course. Most of these commodities are
below the level at which sufficient pro-
duction can be maintained for the
worlds normal needs, and therefore
rONT1nq. SaYr lot Vraafsf -Vo0OvnV. ~
Because the present depression Is
and because its causes were
does not require that we
should wait upon the recovery Of the
rest of the world. We can make very
large degree of recovery independently
Of what may happen elsewhere.
Recalls 1922 Measures.
'T should like to remind you that
we did precisely that thing in 1922.
We were then experiencing the results
Of. the collapse of war imitation in all
and in every direction.
We had less organized cooperation be-
tween the business community and the
to help mitigate that sit
uation. The rest of the world was In
chaos from the war far more menacing
both to. economic and political stability
than anything confronting us today.
Our dificulties at that time were
far more severe than they are at pres
snt. The commercial banks particu-
arly were sufferers from q large vol
ume of frozen credits and enjoyed
nothing to compare with the comfort
able Nquidity that prevails today. We
then had overexpansion and large
stocks In most commodities; today,
with one or two exceptions, we are free
from this deterrent. But we led the
world in recovery. 1t was our 1nde-
pendent recuperation from that depres-
sion and the economic strength which
we so literally and largely furnished
10 other countries that was the very
basis for reconstruction Of q war-de-
world.
1--WE are able In considerable degree to
free ourselves of world influences and
make a large measure Of independent
recovery because we are so remarkably
self contained. Because of this, while
our economic system is subject to the
shock of world influences, we should
be able, in large measure. to readjust
ourselves. Our national production Is
oyer one-third of the total of the whole
commercial world. We consume an av-
erage of about 90 per cent of our own
production Of, commodities. If. for ex-
ample, we assume a restored normal
home consumption and held even our
present reduced basis of exports, We
should be hpon or per cent Of normal
basis Even this illustration does not
all Of OUR seh-contained
strength.
Must Depend on Selves.
we shall need. mainly to depend
upon our own strong arm for recovery,
as other nations are in greater diff
Guilty than We, We shall need again
to undertake to assist and cooperate
with them. Our imports of commodi-