Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-05
Lack of Public Participation
Held Favorable Factor
in Situation.
ECONOMIC DEPRESSION
HAS WIDESPREAD EFFECT
Present Conditions in This Country
Reflect Unsettlement of Bust
ness Abroad.
BY CHARLES F. SPEARE.
eciaI niepatnh ~ r-h. ut..

Special Dispatch to The Star.
NEW YORK, October 4.-The de-
cline in the stock market this week
stopped little short Of the, low aver
age Of November, 1929, though the rails
went below the panic level, and scores
OF individual shares from the industrial
list dropped further down the price
scale. With them went bonds, whose
market position is affected more by
earnings than by money conditions.
Except for the much smaller volume
OF Liquidation, 1t has been a period
reminiscent of a year ago, but with
the former vulnerable elements in it,
such as extended credits In speculative
enterprises, top-heavy market and a
bew1ldered public committed to all sorts
and conditions of new securities, en-
tirely eliminated.
What We are dealing with now is an
economic situation more distressing
than any since 1893. For the first time
since this last major panic, practically
every important country in the world,
except France, is seriously affected.
This fact makes it more dificult to de-
termine the depths to which the depres-
sion may 60 and the probable extent
to it.
Trade Centers Linked.
1t is impossible today for one to
travel in this country or in Europe and
not realize how inter-related domestic
and foreign trade and credits have be-
come since the war and how necessary
it is that sound economics and stable
governments should permanently pre-
vail where, in the one case, raw ma
terialS, and, in the other, manufactured
products, are the source of national
wealth and the basis of universal en-
ployment. The people of the United
States have had to learn in the last IL
months, and especially in the last six,
through loss of trade and a sad shrink
age in the value of their investments,
that what goes on in Great Britain, in
Germany, IN Russia and in South and
Central America, directly affects their
particular business and their individual
incomes. Its application may be remote
nj many instances, but traces of it will
be found in nearly every distressed
commercial situation that exists within
our borders.
Not only does the international char
acter Of the depression render, analysis
Of 1t more difiicult than in the past.
but new elements have entered into it
which confuse the outlook They are
nearly as much cause as were the
traditional factors of transportation in
securities, real estate and commodities,
overproduction of finished goods and,
as corollary, unSound banking
practices.
British Outlook Obscure.
AS an illustration, take current condi-
tionS in Great Britain and in GERMANY
In the former country, whose prospects
are probably more obscure than those of
any great power today, we find what
has never before existed since the early
part OF the last century, namely, polit-
ical and social situation that bears
down on industry nearly as hard as do
the fall in commodities and the loss of
trade through inability or an indisposi-
ton to go along with modern methods
in organization and in machinery.
Were Great Britain able to release her
self from the grip of labor policies and
high taxes and had she the former CO.
operation Of her dominions, much Of the
present hopeleSsness in business circles
would disappear. Out of the crisis there
Is at last developing some unity and ini-
tiative among industrialists, very little
among political parties.
In Germany cause and effect in their
relation to the existing depression in
trade and in the market value of securi-
ties, are difficult to separate. The great
success of the National Socialists
u
has been credited to the severe economic
conditions from which Germany has
suffered. The worldwide repercussions
of this epiSod have been entirely from
its political significance.
Politics Causes Confusion.
The profession of propaganda to
which the war gave birth is today play
ing many tricks on the public. 1t is
little wonder that the man in the street
gropes about trying to find satisfactory
explanation for all that Is occurring and
Is taking toll of his wages or increment.
Out of this propaganda develops the
mental state, or psychology, that in 1929
made men feel that they were sitting on
top of the world and that in 1880 has
reduced them to blubbering converts to
the doctrine Of despair.
1t is unfortunately true that in Europe
at present emphasis is being placed on
the serious economic status in order to
bring about political advantage. This
game has been played to a dangerous
degree both in Great Britain and in
Germany.
Fortunately for the United States, it
does not have to deal with this mixture
of economies and politics. While there
will unquestionably be a political reac-
ton from unemployment, low prices of
agricultural products and the losses and
depreciation in securities, one here is
not always compelled Ia analyze the
business situation both from the eco
nomic or social and the political stand
point. For this reason, recovery IN the
United States should be earlier than
In Europe. And there Is nothing that
the rest of the world awaits with such
eagerneSS at the moment as signs of
permanent revival in this country.
"Invalids" Drag on Business.
At another important point the con-
ditionS, or business policies, now pre-
vailing in America and In Europe are
quite different from those in other years
of crises. Probably the most important,
and one tending to prolong the depres-
sion, Is the unwillingneSs to liquidate
the bad situations and take the losses
arising from them. No one wants to
hurt any one or be hurt. Consequently,
in every country there are great num-
beers OF corporate 1nvalidS being carried
along whose permanent recovery would
be assisted II they were made to start
over on q sound basis of capital and
efficiency.
Along with this is the question of
sustained wages, sustained retail pl IS
after a long term of falling prices of
dealing with overproduction of VIII t,
coffee, rubber, wool, etc. In other wo. lis,
the world previously has been willing or
has been made to take its medicine In
q crisis. following . period Of overspecu.
CONTINUED on Fourth P"s'''