Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-07-20
BUSINESS PLAYS LITTLE
PART In CONGRESS RACES
Connection With Politics i'm This Years
Campaign Is Held to Be Less
Than Ever Before.

much in the calculations of political
managers, nor, apparently, In the minds
of the voters. For whatever reason the
Democrats seem less disposed than Is
usual with the party out of power to
blame the business depression on the
party in power. There is less political
agitation of this kind, less political cap
italizing of "hard times" than has been
the rule during previous depressions.
Issue Remains Doubtful.
The Democrats for the morent create
an impression of uncertaint~ on their
part as to what issue they expect to
emphasize. Up to the moD.lnt of the
actual passage of the tariff bill prac-
tically the whole of the Democratic
publicity laid emphasis on the taf1n
Since that event there has been a def
mite and striking phenomenon, what
ever its meaning nay be. The Demo-
Gratis in an obv,1ds manner have laid
of" the tariff Not only the Democrats.
The two lseseSt chains of newspapers
| in AmeShAA, which, while the tariff was
| pendi:s, dashed it with fury. have had
sinrS the bill was passed, almost lit
! 11Slly not a word to say about the tariff.
What that means is hard to Aay. Per-
| hapS it may be recognition Cs1at the
tariff could not possibly be the cause,
or even a cause, of the business depres-
I sion. In any event we should be able
to see Iscetty soon just what issues the
| Democrats expect 10 T6Sse and empha-
size in the campaign that shortly viii
| be under way.
To turn from the political aspect Of
the present expression, to consider it
In the light in which nearly everybody
looks upon it, to speculate upon how
1t will express itself in the future state
of business, .ex-President Coolidge the
other day referred to some previous de-
pressions and said:
1.-The important fact is that the coun-
try went on developing wealth
increased greatly"
It would be safe to be even more
| specific and more emphatic. The longest
period of lowering prices this country
has ever known was from the early
| '70s to the late eos. Yet it was during
| Just that period that the biggest buSi-
nesses and the greatest fortunes this
country has ever known were built UP.
1t was during precisely that period that
practically the whole of the early oil
business was built up and John D.
Rockefeller made not merely the start
of his fortune, but quite probably as
much as half Of all he has today. Not
only Mr.. Rockefeller but scores and
hundreds of others in the oil business.
It was during that period that the steel
business grew up-the steel business as
we know 1t today in contrast with the
preceding and now partly eclipSed iron
business. It was during that period
that Mr.. Carnegie made his fortune and
the components of what In 1901 became
the United States Steel Corporation
were, built up. It was during that pc
Rod, in spite of some intervals diffi-
| cult for farmers, that land in the West
ern States rose in value from O few
dollars an acre to upward Of a hundred.
Not to prolong the illustrations, the
important and practical point having
! reference to the present is that low
prices for goods, which Is the! outstand-
ing mark Of the present condition, do
not necessarily make for lack of bIsi-
ness activity or lack of prosperity. One
might reasonably assert the contrary
that low prices of goods make for great
volume of business. The proof is near
at hand. The period Just behind US,
from 1920 to 1880, was period, on the
whole, of low or lowering prices. Yet
that was precisely the period Of the
greatest prosperity this country has ever
known.
Trade Gains After Decline.
What happens is this: Over long Pc
RODS, sometimes as long as 20 years or
more, prices of goods tend downward.
| But the decline seems to take place In
particular way. It takes the form Of
sudden and rather drastic drop, fol-
lowed by several years Of roughly sta
bilized prices on the new level. At the
end of several years there may be q
new and considerable drop, followed
again by several years at the new level.
The comparatively brief period Of the
drastic drop Is attended by very much
reduced volume of business. Thereafter,
once the new level Is established, bust
ness goes forward with an increasing
momentum that becomes something like
a fury of activity.
That is what has happened during
the last 10 years In the United States.
About 1920 there was a stringent fall
in prices, accompanied by severe halt
in business activity: then ensued nearly
10 years of the greatest volume OF busi-
ness and the greatest prosperity the
country has ever known. Then came
new drastic drop in prices, in the midst
of which we now are.
About the duration of this business
depression there has been much pre-
diction. One would not do a service to
add to the quantity of it. But there
Is present at this moment a concrete
condition-the consumption of goods is
much greater for the moment than the
production of goods.
The consumption Of many forms Of
goods is going on almost as usual. That
sales, which are less than per cent
below last year. At the same time the
decline in the production of goods, as
measured by the reports Of manufac-
turers, is from 10 to Is per cent, at
least, below last year.
What this means, sooner or later, Is
a sudden realization Of kind Of famine
in goods, followed by hurried buying
of goods on the part Of retailers and
other dealers, resulting, perhaps, in
slight elevation of prices over present
levels and thereafter, If we can Judge
by precedent, new and prolonged Pc
Rod of constantly increasing business
activity at the new level Of prices.