Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-01-10

American farms and factories are
| American citizens themselves In nor
NAL times more than 80 per cent of
Americas trade is in America, and at
present more than 95 per cent. We
must then chiefly depend upon Amer
lean customers to maintain our eco
nomic system.
The overwhelming proportion of
American customers for American
goods and products are American
| farmers and industrial wage earners
and salaried employees. In other words
| mass production Is dependent upon
mass distribution and mass consump-
ton. The farmers products, in the
main, must be sold to wage and sal
aired employees. The products manu-
| featured by labor must in turn be sold
chiefly to wage earners, employer and
salaried farmers. Thus we find the
farmer and the wage earners mutually
dependent upon each other.s Since II
per cent of the product Of American
farm and factory are bought Of at alb
by those with incomes under $4,000
yearly we see that If the farmer and
wage Garner do not receive sufficient
return from their own labor to buy
| what they need, the business balance is
| destroyed; depressions come and panics
| follow.
Cause Of Conditions.
What has happened to those farmers
and wage earners? Herein lies one of
| the chief contributing causes to pres
ent conditions. Since 1926 the wages
in America have decreased 50 per cent.
The interest and dividends of capital
| during the same period have increased
more than 60 per cent All know that
farmers cannot pay taxes, interest, and
buy the products Of factories on scent
cotton, 10-cent corn, ascent wheat
and other farm prices in proportion.
Since the World War farm prices
have decreased so per cent below the
prices Of factory products. In other
words, one bale of cotton or one bushel
of wheat before the World War would
buy more than two bales of cotton or
| two bushels Of wheat today.
Thus We find wage and salaried en-
ployes with purchasing power reduced,
power reduced.
This weeks bulletin of the National
City Bank of New York contains three
| pertinent statements portraying this
| disarrangement brought about by over
payment of capital and underpayment
| of farm and industrial labor.
Bank Bulletin Quoted.
This bulletin says:
THE inability Of the farmer to buy
Is keeping factory workers out OF en-
ployment. and the Unemployment goes
around the circle"
This shows that the farmers pur-
chasing power Is necessary to operate
| the factories.
! What about the necessity Of in
dustrial purchasers for farm products?
| The same bulletin answers this ques-
ton as follows:
1T should be added that the decline
in prices Of dairy products seems to
have been due in less degree to an in
crease In production than to a decline
In the purchasing power of consumers"
| Thus We see the two largest groups
Of Americas consumer purchasers are
mutually dependent, one upon the other.
| Their purchasing power is gone, al
though they produced enough wealth
to buy, If the economic system had
functioned fairly and adequately. Where
did their products go?
Idle Funds Feature Markets.
Let the National City Bank answer
this question. which it does in the fol-
lowing language:
"Inasmuch as the deposit liabilities
Of these banks have greatly shrunk
over the past syear it is apparent that
the banks are the possessors Of far
larger reserves than they can find safe
and profitable use for under present
conditions"
The existence of this huge share of
idle funds is the dominating feature of
the money markets. Clearly, the volume
of funds awaiting the beck and call of
business is enormous.
These bank statements show the re-
suit of an underpayment of farmers
and industrial workers and an overpay-
ment of capital. These huge idle funds
paid to capital in excess of its just part
of production thus congest the chan
nels of trade. If, as was contemplated
by our economic system, labor had re-