The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1934-10-25
BY BERNARD M, BARUCH

five, years ago, next Mondays
the beginning Of this greatest OF
all crises. We are wrong. What
happened on black, Tuesday was
the toppling of the crazy structure
of credit initiation whose erection
we started when the rediscount
rate was changed two years be-
fore. ....."
We had begun to go mad, of
course, in 1924, when the bull
market got under way hard on the
heels. Of the election. We had
been growing more and more
through the three years that fol-
lowed, but it was not until 1927
that our frenzy began to reach its
full height. . .,
We lived, then, in q dream of
boundlesS wealth. We believed
that production never could catch
up with demand. In every pos
sible way, we increased our capa-
city to produce.
Our mistake was not in overpro-
duction, which is merely a CORE
lative of underconsumption, but in
creating excess productive capa-
city.
What we were striving for was
the expansion Of our world trade
based on that hope alone, as we
know now, individuals had increas-
ed their debts by so per cent in
seven years, and corporations had
increased theirs by rs per cent.
to hold our trade land still fur
Their to increase it, we loaned the
money with which our goods might
be bought. No nation was too
crippled, too incapable of incur
ring such a debt, for US to urge
our loans upon it. .. .s
We shut our eyes and kept them
shut, to the fact that during the
war. with it's dislocation of man.
ufacture and commerce. the whole
world had put itself into a posi-
ton where it could, and did, make
for itself most of the things it
needed.
Above all, we shut our eyes to
increasing unemployment and de-
clining agricultural prices.
There was no shortage of goods
during the war, not even of grain
The shortage was in bottoms, by
which these goods might be trans
ported. Nations, of necessity, be-
gan to make their own things, and,
once the emergency was over, they
kept on making the things they
had not known before that, they
could make. They; did not turn to
other nations as they had before,
and least of all did they turn to
America. ,,4 -
The whole world shared in a
delusion of limitless trade.
1t was not 3 situation peculiar
to America. In the very nature
of the world situation, we were
the heart of it all. We had be.
come the great creditor nation OF
the world. Our gold holdings had
crown to more tina ntwice, those
of France and more than five
times those of England. q Inevit-
ably, when disaster came, we were
the vortex, Demands for apply
ing the brakes and stopping the
madness, notably by such men as
Carter Glass, went UNDECIDED.
Now we are liquidating our
follies. - ,n.
For five years we have been
asking how and why all this has
come about, but even, in the
depths of our despair, we would not
let ourselves believe that it was
''V We tried to bring back the
values on which they had been
builded. Our Wealth had been
great beyond measure. This
wealth, we protested, must be
brought back. We still Rugged to
our hearts the delusion that we
all could be rich without working.
We shut our eyes to the fact that
our whole economic structure had
! been undermined.
Some say that the ancient sys-
tenn has broken down. 1t hasn't.
In our madness we loaded it
beyond its capacity to carry.
| Pessimism is.,still a common
mood, yes, but pessimism always
follows on the, heels, of such dis
tresses as we have gone through.
1our decisions Of dlifendingswealth
have given, place to.delusions of
unnending gloom. One is as I'M
real as the other. s..>':...st..
The, time has come for us to
cool off The time has come for
us to speculate. -,..a g--,
J. No word in all our language has
been more abused and less under
stood than this. To most of us, it
means gamble. :, In. reality, it
means to observe, to see, that is,
to study, to contemplate what has
happened in relation to what is
now and in relation to what is to
come. The true Spectator is he
who, having studied, sees what is
to come and is prepared to act be-
fore it occurs. "a.
i Now, we are in the. process of
examining critically our emer-
\ gency legislation, in ordersto ali
sorb and fit into our permanent
system that which is good.
No laws, by themselves, will oct