Evening star., 1932-08-14
THE LADDER OF RECOVERY
BY FREDERIC ]. HASKIN.

Affairs now having reached their
maximum Of depression, recovery slowly
commences. Consumption Is never ar
rested, even If production is, for the
world must continue to consume in
order that life and civilization may
exist. The continued increase OF pop
ulation also increases the aggregate OF
consumption, and, finally, the industrial
and commercial world again suddenly
realizes that the condition Of affairs
has been reversed and that now the
supply has become unequal to the de-
mand. Then such producers as have
stocks on hand or the machinery OF
production ready for immediate and ef-
fective service realize large profits, and
the realization of this fact Immediately
tempts others to rush into production,
in many cases with insufficient capital
raised often through stock companies
and without that practical knowledge of
the detail OF their undertaking wnlcn
is necessary to insure success. and the
old experience of initiation and reaction
Is again and again repeated.
These cogent observations were writ
ten by David A. Wells and are to be
found in his work called Recent Eco
nonic Changes" The book was pub
lished in 1858 years ago. Since
that time the United States has passed
through the deep depression OF 1898,
the panic of 1907, the sharp recession
of ls2o-21, and today is precisely at
that point, described in the foregoing
paragraph, following the depression Oh
the 30s.
The recent sensational rise in stock
market values illustrates In Spectacu-
lar manner the force Of DR.. Wells,
statements. In his day, while there was
a stock market, it was not so 1mportant
a factor in American economic lie as
It is today. The great industry then
was still agriculture and farm STOCKS
and bonds are not listed on the New
York Stock Exchange. Today the buSl-
ness pulse is more accurately timed Dy
the activity of the manufacturing IN
dustries which have supplemented agrl-
culture in the place OF supremacy
Reactions are far more rapid and where
DR.. Wells, in 1889, could properly say
recovery slowly commences" in these
times it Is expected that recovery Will
be rapid. The whole tempo OF the times
Is keyed up to pace undreamed OF As
wears ago, when there was no such
thing as q United States Steel Corpo-
ration, when Standard Oil was young
and when there was not an automobile
factory in the world. When DR.. Wells
fourished recovery might be indicated
by stimulated activity in a buggy whip
plant; today such industrial giants as
General Motors and Ford show the in
dications. 1t Is inevitable. in these
changed circumstances, that the pace
Of the recovery be accelerated and It's
effects magnifled.
More Potential Buyers.
DR.. Wells refers to the increase OF
population as factor in recovery from
depression. 1t is interesting to note
that the population Of the United States
today Is Just twice what 1t was when he
drew his conclusions. Since 1929, the
last year Of the last boom, the American
population has increased by 5000, 900
Five million more people are in the
country to consume food, shoes, cloth
ing, occupy dwellings, use automobiles
and buy, when they possibly can, the
million articles which modern ingenuity
has invented.
The Government issues weekly state
ments of the conditions of the various
industries. These statements now bea1
out such q condition as that described
by DR.. Wells concerning the low leve
of stocks on hand. This means stocks
of articles already in existence. 1t /!
known, for instance, that during tht
last year or 18 months some Of tht
large shoe companies, instead OF order
ing the usual carload lots OF shoes from