Evening star., 1931-06-16

The business depression is the doFni-
nant subject before the country and the
world today. It's blight stretches from
all quarters of the globe to every busi-
ness place and every cottage door IN
cur land. propose to discuss 1t and
the policies Of the Government in re-
Spect to 1t.
Depressions are not new experiences,
though none has hitherto been so wide
spread. We have passed through no
less than Is major depressions in the
last century. We have learned some
thing as the result of each Of these
experiences. From this one we shall
gain stiffening and economic discipline,
greater knowledge upon which We
We have come out of each previous
depression into o period of prosperity
greater than ever before. We shall do
so this time.
AS we look beyond the horizons Of
our own troubles and consider the
events in other lands, we know that
the main causes Of the extreme violence
and the long continuance Of this de-
preston came not from within but from
outside the United States. Had our
wild speculation; our stock promotion
with its infinite losses and hardship to
innocent people; our loose and extrava-
CANT business methods, and our un-
precedented drought, been our only dis
asters, we would have recovered months
ago.
A large part of the forces which have
swept our shores from abroad are the
malign inheritances in Europe of the
Great Warts huge taxes. its mount
ing armament, its political and social
instability, its disruption of economic
life by the new boundaries. Without
the war we would have no such de-
preston. Upon these war origins are
SuperimpoSed the overrapid expansion
of production and collapse In price Of
many foreign raw materials. The de-
monetization Of silver in certain coun-
tries and score Of more remote causes
have all contributed to dislocation.
Some particular calamity has happened
to nearly every country in the world,
and the difficulties Of each have in
tensifled the unemployment and finan-
cial difficulties of all the others. AS
either the cause or the effect, we have
witnessed armed revolutions within the
past two years in o score of nations not
to mention disturbed political life in
many others Political instability has
affected three-fourths Of the population
of the world.
Independent Recovery.
do not at all minimize the economic
interdependencs OF the world, but de-
spite this the potential and redeeming
strength Of the United States in the
face of this situation Is that we are
economically more self-contained than
any other great nation. This degree
of independence gives assurance that
with the passing Of the temporary dis
make q large measure Of recovery ire
, spective of the rest Of the world. We
! did so with even worse foreign condi-
tionS in 1921.
We can roughly indicate this high
degree of self-containment. Our average
annual production of movable goods be-
fore the depression was about $50,000,-
100000. We exported yearly about
five billions. or 10 per cent. The world
disruption has temporarily reduced our
exports to about three and one-half bill
lions. In other words. the shrinkage
of foreign trade by one and one-half
billions amounts to only 2 or 3 per cent
Of our total productivity. Yet as re-
suit of all the adverse forces our pro-
duction has been reduced by, roughly,
ten or twelve billions. This sharp con-
trast between a national shrinkage of,
say, $l2, 200, ,000, 900 and loss Of 81 $780,
600 900 from export trade Is an indica-
ton of the disarrangement Of our own
internal production and consumption
entirely apart from that resulting from
decreased sales abroad. Some Of this
enlarged dislocation is also due to the
foreign effects upon prices Of commod-
tiles and securities.
Moreover, the repeated shocks from
political disturbance and revolution in
foreign countries stimulate fear and
hesitation among our business men.
These fears and apprehensions are un-
necessarily increased by that minority
of people who would make political
capital out of the depression through
magntfying our unemployment and
losses. Other small groups in the buSi-
ness world make their contribution to
distress by raids on our markets with
purpose to profit from depreciation of
securities and commodities. Both groups
are within the law: they are equally
condemned by our public and business
opinion: they are by no means helpful
to the Nation.
Fear Is Economic Force.
Fear and apprehension, whether
their origins are domestic or foreign, are
very real, tangible, economic forces.
Fear Of loss of a job or uncertainty as
to the future has caused millions Of
our people unnecessarily to reduce their
purchases Of goods, thereby decreasing
our production and employment. These
uncertainties lead our bankers and
business men to extreme caution, and
in consequence q mania for liquidation
has reduced our stocks Of goods and
our credits far below any necessity. All
these apprehensionS and actions check
enterprise and lessen our national ac-
tivitieS.
With no desire to minimize the
realities Of suffering or the stern task
OF recovery, we must appraise the other
side OF this picture. If we proceed
with sanity we must not look only ct
the empty hole in the middle of the
doughnut.
We must bear in mind at all times
our marvellous resources in land, mines,
mills, man power, brain power and
courage. Over 95 per cent Of our fam
lies have either an income or O bread
winner employed. Our people are work.
Ing harder and are reSolutely engaged,
individually and collectively, in over
hauling and improving their methods
and services. This is the fundamental
method Of repair to the wreckage from
our boom Of two years ago; 1t is the
remedy to the impacts from abroad. 1t
takes time, but is going on. Although
fear has resulted in unnecessary re-
duction in spending, yet these very re-
ductions are piling up savings in our
savings banks until today they are the
largest in our history. Surplus money
does not remain idle for long. Ulti-
mately 1t is the most insistent pro-
moter Of enterprise and of optimism
Consumption Of retail goods in many
lines Is proceeding at higher rate than
last year. The harvest prospects indi-
cate recovery from the drought and in
creased employment in handling the
crop. Revolutions in many countries
have spent themselves and stability ts
on the ascendancy. The underlying
forces Of recovery are asserting Them
selves.
Government Gave Aid.