Smyrna times., 1932-11-16
OUR GOVERNMENT
VS.. ECONOMIC LAW
f. HI. Shakespeare Analyses
Present Conditions Lead
ing To Depression
DEFY TO ECONOMIC LAW

Now that the election is over,
let US consider present conditions
and also some Of the happenings
leading up to the depression. Let
us see if we can find anything that
might have started the trouble.
Hunger and want together with an
overproduction of food and goods;
work to be done, men seeking
work, yet no jobs; plenty of avail
able money but nobody using
money to start anything; the flow
of money damned up, as it were:-
these are the present conditions.
When and how did it start? Our
governmental authorities deliber-
ately started the "damming up of
money in the early spring of 1929,
evidently not realizing that any de-
fiance of supply and demand al
ways works havoc. Business of
the whole world looks to the New
York Stock Exchange for guidance
on interest rates and other indi-
cations of money supply and de-
mand. The stock market has a
way Of correcting its own excesses.
If left to itself, it obeys the law of
supply and demand, the Economic
Law This it was not allowed to
do in 1929. During the first five
months Of 1929, some sixty percent
Of the listed stocks actually were
showing q declining trend. About
February 1929, high government
authorities issued dire warnings
with statements that the stock
market could be Debated without
hurting business The Federal Re
serve brought pressure to bear on
the call money market, in April
1929 the interest rate was forced
up to twenty percent. Thus they
defied economic law, the law of
supply and demand for money!.
Instead of stopping speculation and
debating the stock market, this ac-
tion had exactly the opposite effect.
The high interest rates attracted a
food Of money from abroad and
from domestic sources which were
not in the habit of loaning in Wall
Street. Much publicity was given
to the "goings on" with the result
that the general public became i'm
bued with the idea that the stock
market could not 60 down, gov
eminent authorities had tried to
defiate it but could not do SO. Then
resulted the wild speculation of
the summer of 1929. The general
public thought they had sure
thing and bought any kind Of an
old stock at any old price. Many
experienced traders retired from |
the market in June and July of |
1e29,-the general public took the
market away from them. Many
investors dared not sell their hold |
ings because of their enormous
paper profits and the high income
surtaxes they would have to pay. |
(Another interference with the
economic law Of supply and de
mandD. The supply of stocks be-
came scarce. This resulted in wild |
unreasonable price advances. Gov
ernmental authorities had tried to !
interfere with the law of supply
and demand They failed, as every /
one always will fail when they defy I
economic law. Wide publicity Civ
49,, ~ - n
public to believe that the stock /
market was impregnable. The .
public was Unsuitable in its demand .
for securities. It wanted anything
and everything in the way Of .
stocks and bonds. Banking insti- .
tutions became lax and almost 4
careless about the securities they 4
underworld and issued. The gen
eral public demanded stocks and I
bonds of any kind; and Of course 4
somebody was ready to give them
what they wanted,-at price,
and what price. Then came a
market correction, the September
decline which ended with a good
sized slump during the first week
Of October. The President Of the
United States made statement |
assuring the country that business
was still good,-that business was
in no danger. stood in a New
York brokers Office and watched /
that statement come over the news
ticker. Immediately a dozen or
more men around me grabbed for
selling pads" ,-"sell at the mark