The Waterbury Democrat., 1938-04-14

 States is of necessity a primary concern of government. Current events, if allowed to run undis- turbed, will continue to threaten the security of our people and the stability of our economic life. The national administration has prom ised never to stand idly by and watch its people, it's business sys- tenn and its national life disin- tegrate. It is because the course of our economics has run adversely for half year that we owe it to ourselves to turn it in the other direction before the situation be- comes more definitely serious.
 Business Collapse
 When this administration took office it found business, credit and agriculture in collapse. The col- lapse had followed on the heels of over-speculation in and over-pro- duction of practically every article or instrument used by man. Dur ing the processes of over-specula- tion and over -production-m the twenties-millions of people had been put to work, but the products of their hands had exceeded the purchasing power of their pocket books, with the result that huge surpluses, not only of crops but also of buildings and goods of every kind, over-hung the mar ket. Under the memorable law Of supply and demand, supplies so overran demand which would pay that production was compelled to stop. Unemployment and closed factories resulted. Hence the tragic years from 1929 to 1893.
 Starting in March, 1883, the Congress and the administration devoted themselves unceasingly, not only to reestablishing reser- voirs of credit, but yo putting pur- chas' .1g power in the hands of the consuming public and actually securing more equitable distribu- ton of the national income. Thus the downward spiral was stopped and not merely stopped, but started on an upward course - a trend lasting through four years and a half.
 National Income
 In 1928 the national income was eighty billion dollars; in 1892 it had fallen to less than forty bil- lion dollars.
 Since the low point of 1882, each year including 1897 was shown a steady increase in the income which the nation produced reflected in increased wages and salaries, in increased dividends, interest and individuals income. In 1887 the total of our citizens income had risen to sixty eight billion dollars.
 At the end of 1886 the efforts of the government to aid in increas- ing the nations purchasing pow CT and in stimulating business had become so well recognized that both the business community and the government felt that alrge measure of the governments spending activities could be mate rially reduced.
 But the very vigor of the recov- cry in both durable goods and consumers goods brought into the picture early in 1897 certain high ly undesirable practices, which were in large part responsible for the economic decline which began in the later months of that year. Again production outran the abil- ity to buy.
 There were many reasons for this production. One was fear fear of WET abroad, fear of infla- tion, fear of nationwide strikes. None of these fears have been borne out. There were other causes of over-production, and these causes differed in each industry.
 Buying Power Lags
 The net result of these causes and ill-advised practices was 8 repetition, on a small scale, of what had happened in 1927, 1928 and 1929 on much smaller scale. In other words, production in many important lines of goods outran the ability of the public to purchase them. For example, through the winter and spring of 1897 cotton factories in hundreds of cases were running on 8 three shift basis, piling up cotton goods in the factory and in the hands of middle men and retailers. For example, also, automobile manu- lecturers not only turned out a normal increase of finished cars, but encouraged the normal in- crease to run into abnormal fig ures, using every known method to push their sales. This meant, of course, that the steel mills of the nation ran on twenty-four hour basis, and the tire companies and cotton factories Speeded up to meet the same type of abnor- mally stimulated demand. The buying power of the nation Jagged behind.
 Thus by the autumn of 1897 the nation agian had stocks on hand which the consuming public could not buy because the purchasing power of the consuming public had not kept pace with the pro- duction.
 Prices Rose
 During the same period prior to last autumn, the prices of many vital products had risen faster than was warranted. For exam pie, copper-which undoubtedly can be produced at a profit in this country for from ten to twelve cnets a pound-was pushed up and up to seventeen cents a pound. The price of steel products of many kinds was increased far more than was justified by the increased wages of steel workers. In the case of many commodities the price to the consumer was rasied well above the inflationary boom prices of 1929. In many lines of goods and materials, prices got so high that buyers and builders ceased to buy or to build.