The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1930-05-10
Killing the Goose

In this decade a seemingly impossible economic
phenomenon has developed in America. 1t is made
up of the following apparently paradoxical parts:
Higher wages, shorter hours, lower prices, bigger
profits.
1t goes against the economic philosophy of all
time But it works. It's name is-masS production
1t has been made possible through invention,
Standardization, elimination of waste-through appli-
cation of imagination to industry.
We have witnessed the wonder most spectacularly
in the history of the Ford Motor Company, but that
history is typical of hundreds of other similar indus
trial achievements
The KEY to continued success of the mass produc-
ton idea necessarily must be found in evSt-
widening market 1t would cost innumerable thou
sands Of dollars to build just Ford car. But If
you can build enough Ford cars, you can sell them
proftably at a few hundred dollars each.
The more you sell, the more the possibility of
further reducing the price. AS the price is reduced
more can afford to buy. So the market is widened
Thus the process evolves. lower prices, high profits
better wages shorter hours.
But all along the success of mass production
hinges on mass market. SO long the market
continues to grow, so long as the buying demand
expands the mass producer continue along the
hne that has characterized Fords remarkable de-
demonstrating prices increasing wages, shorten
ing hours and increasing profits
But when the market fails to expand, when it
begins to contract, when it can no longer be Stmu-
lated by reduced prices, then trouble and serious
trouble starts For mass production involves ire
mendous fixed capital investment in plant and
machinery.
If you have plant geared up to great production
and are unable to sell its capacity, you are in for
trouble Your fixed capital charge eats you up and
your whole structure becomes topheavy.
Our economic troubles today not due, as they
we're in Biblical times to famine. They are due to
plenty-to overproduction and underconSunptlon
Anything therefore that tends to cut consumption
threatens the whole phenomenon, which, II 1t can
be continued, constitutes. as President Hoover has
said the greatest single step in all time toward the
abolition Of poverty.
Unemployment reduced wages, or any other eco
nomic act that reduces purchasing power works to-
ward destruction of the whole mass production idea
Now there is a natural limit to the consumption
capacity even Of these great United States Stimuli
lated and speeded up though the consumption idea
has been-with the luxury of yesterday transformed
into the necessity of todaythe demand has not kept
ND with supply. That's what's wrong with us now
We are temporarily at the "saturation point
What is the way out?
Obviously-more markets That means foreign
markets.
And what are we going to do about it?
We Gre building tariff wall around America We
are inviting reprsals We are shrinking our markets
We are killing the goose that has laid our golden egg
Nobody knows better than Herbert Hoover the
philosophy of production and how mass pro-
duction works His speeches in the campaign time
and again expressed that philosophy.
1t is inconceivable that Hoover knowing what be
does viii sign the tariff bill