“SEVERE SHOCK”

Northern Advocate, 3 October 1930, Page 5

“SEVERE SHOCK”

AMERICAN ECONOMIC STATUS

PRESIDENT ’ S DIAGNOSIS.

BEST OF A BAD JOB,

(United Press Association—By Electric Telegraph—Copyright.) (Received 9,8 m)' 'NEW XORK, October 2. A message from Cleveland (Ohio) states that President Hoover, addressing the American Bankers' : Association, said: “We have had a severe shock, and there has been disorganisation of our economic system which has temporarily checked the march of prosperity. Though our production and consumption have been slowed down to 85 and 90 per cent, of normal, yet by the very fact of steady functioning of the major portion of our system, do, wc have an assurance of our ability and economic strength to overcome this decline. ‘ ‘ Tho depression is world-wide. Its causes and effects lie only partly in the United States. Our country ..engaged in over-speculation in securities which crashed a year ago. “Perhaps an even larger imminent cause of our depression has been the elloet of the collapse of. prices following the over-production of imported raw materials, mostly in foreign countries,' J

Particularly had tlxo planting of rubber, coffee, wheat, sugar, and cotton expanded beyond world consumption, even in normal times. Certain metals likewise were over-produced, notably zinc, copper and silver. The President continued: “These tndjer over-expansions have taken place largely outside the United States. This collapse has reduced the-buying power 1 many countries. Prosperity- has been temporarily affected by various t causes, on some occasions accompanied by political unrest, such as in Brazil, Columbia, Chile, Peru- Mexico, Australia, Canada, India, China, Argon*, tina, Cuba and Java, but readjustments in prices are far along- the course. Most of these commodities , are below the level at which sufficient production can be maintained for. the world's normal needs, and,'.therefore sooner or later must recover.„ “We are able to a considerable de*. gree to free ourselves of world influence and make a large measure of independent recovery. Because, we are so remarkably self-contained,, we shall* need mainly to depend on ourselvesi for recovery, as other nations, are in greater difficulty than we arc, . and ' we need again to undertake to assist and c‘o-operate with them. ~ ‘ 1 There is no simple explanation of these movements. This is-not the oeI easion for an analysis of many theories, such as too little gold’ or the ‘ inflexible use of it. Whatever’ the re-’ mote causes may be, the iniuie‘diat& cause of most of the hard times is inflatory booms. These sfrtJTe. some sentiment of economic life somewhere in the world, and then the re-echoing destructive result will bring depression. . V. • ' “We may safely assumo that our \ eeonomie future is sure, as far as it is dependent upon competent handling of the problems of productivity; but one result is a further advance ’towards stability, which is even more urgent, for with higher standards of living the whole system is more sensitive and the penalties of instability are more widespread."

The President concluded fay saying; "Any recession in American business is but a temporary halt in the prosperity of a great people;”