Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-21
No Real Wealth Lost
In Stock Market Drop
To the Editor Of The Star:

To the Editor Of The Star:
I have often heard opinions ex-
pressed here and there and q little
everywhere about town, according 70
which it would seem to be q well es-
tablished fact that everybody lost money
in the stock market crash and that con-
sequently the Nation has become poorer
I think the time has come when 1t is
necessary and wholesome to expel from
the peoples imagination such gross
myth. To this effect, I wish to make
it known that If ever since last year
this country has encountered any loss,
1t is but the loss of its illusions.
In fact, since Lavoisier, we are all ia
miliar with the proposition that Dams
la nature rien ne sc perd, r1en ne sc
cree" in nature nothing is lost nothing
is created" In other words, II any one
happens to lose something 1t is for the
greatest benefit of his neighbors, and
reciprocally, some one can enrich MINI
self but at the expense OF the COM
munity. And what is true with tndi-
viduals is also true with nations; SO that
it can be safely asserted that the losses
of fo,Ir-fifths of Frances wealth and a
million and a half Of her dear children,
dead in the defense of the sacred cause
of civilization" did not occur without
profit to other nations. Similarly, rea-
soning along these lines, we are led to
the conclusion that If, indeed, some
money has been lost In wall Street, it
must be found somewhere here or in
foreign countries, otherwise it will be
agreed that this loss Of money Is tmagi-
nary or illusory.
But, in order to make the problem
clearer, let US see what happened be-
fore last October. For quite a while
the stock market, as whole, had been
steadily increasing. This increase was
then interpreted by distinguished
economists as an irrefutable indication
that the Nation was getting richer. The
wealth of the Nation was stressed In
every speech; prosperity became the
"cheval de bataille"-the fighting
horse--of more than one politician. and
the people started to believe hard in an
exaggerated prosperity. The result was,
the more prosperity was talked OF, the
higher the stock market would go.
Now, did the increase in the national
wealth justify the behavior of the mar
ket? This is the whole question, and
1t is answered in the negative. Long
before October the exports had reached
ceiling. while imports were increasing.
American money was invested abroad
in great quantities, chiefly in South
America. Gold was exported to Europe.
American tourists helped that exodus OF
money frona the country. The market
went climbing to higher and higher
levels. though there was no increase In
the Nations wealth.
Then happened the inevitable. The
investors realized the ridiculous income
from their stocks, and, at last, eyes were
opened to the cruel truth:
That the stocks had an illuSory value
an6 that the investors and gamblers
lost, but their illusion does not allow
any doubt, inasmuch as the money they
could pretend to have lost has left no
trace either here or in the commercial
balance of foreign countries. Conse-
quently it can be assumed that the
country is as prosperous as it was be-
fore, under the Coolidge so-called pros
perity. E. DE LA RUFFINIERE.