AMERICAN CRASH

Hokitika Guardian, 21 February 1930, Page 2

AMERICAN CRASH

ASTONISHING FEATURES. It had been apparent for some months prior to the collapse that conditions were rapidly coming to a crisis, remarked Mr W. Appleton, of Wellington, who has just returned from a world tour. When leading stocks had been speculated in to such an extent that the return was only about 3 per cent on the capital, it was apparent that something would have to crash. 'Mr Appleton attributes the Wall Street debacle in no small measure to the “come-back” of Henry Ford in the motor industry. In the United States the motor industry was predominant, and all the factories had speeded up production to such an extent that moi e cars than ever were manufactured last year. With Ford coming into action with a sale of something like two million vehicles, it was inevitable that there should be a slump in other directions; and that, Mr Appleton considered, was one of the primary causes for the collapse. Then, too, there had been very heavy speculation in the whole of the United States.

THREE MILLION UNEMPLOYED

“Another outstanding feature in America,’ said Mr Appleton, “ is the extent to which time-payment sales are made. Manufacturers of all classes of articles have vied with each in mass selling, with the result that practically every man, ; woman, and child in America had mortgaged his future for years ahead. There was, of course, the inevitable collapse in the labour market, with thousands of people out of work; and it naturally followed that these payments could not be kept up. At the present time there are three million people unemployed in the United States. As any man, woman, hoy or girl earning from £2 a week upwards could buy anything from clothing and jewellery to radios and motor cars, on the weekly or monthly payment plan, credit was very much in demand. The result is to-day that the United States, with about one-fifteenth of the world’s population owes in private debts three times as much as all the rest of the world put together. This is on the authority of Mr James Martin Miller, former United States Consul-General to New Zealand, Germany and France; and on this point M.r Miller is not referring to National Government debts, hut only to those of individuals.

“BOASTED MACHINE AGE.”

“It is estimated also that there are 32,000,000 motor cars in use in the world to-day',and approximately 27,000,000 of these are in the United States. The fact that the people of America own more than five times as many cars as all .c'f the rest of the world’s population has for many years been the .subject for boasting, but people over there now realise that there is a certain liability attached to the ownership, Any intelligent observer must notice that this boasted machine ago of ours, with its amazing mass production and its accompanying installment selling to unload over-production has proved a somewhat dangerous artificial stimulant to sound business and prosperity.

“In my opinion,” said Mr Appleton “some of the captains of mass production in the United States have ridden for a somewhat disastrous fall. The American people have what I might term a publicity complex and are ‘sold 'on ideas’ very quickly. Just about the time I was there, when those who thought realised that a fall was about to take place, the newspapers were full of optimism. One heard it constantly on the radio, and even in the theatres there was properity talk.’

SMALL MERCHANTS “SNUFFED OUT,” “I noticed a statement, for instance that one of the big ‘chain stores’ had reached a business the highest in his-

tory. T o comment was made, however, on the thousands of once prosperous

local merchants who have been ‘snuff-

ed out’ of business in* the process, and of the hundreds of wholesale grocers, wholeale druggists and other jobbers who have lost their livelihood, Last year, I was told 40,000 travellers went off the road because their houses had gone out of business. It is well known that the ordinary commercial travellers cannot sell goods to chain stores. “Big business is all right in its way

but the strength of any country lies in

a large number of small businesses, f That is the conclusion I have come to after examining conditions in the United States and Canada.' In these coun-

tries not only are there chain stores but there are chain druggists, and even chain restaurants and cafeterias.

An independent and virile people conducting individual businesses are of far more service to a country and to a nation as a whole. MONEY DIVERTED TO CITIES.

“There is no getting away from the fact, too, that this centralisation of control makes it possible for chain store manufacturers to control and regulate prices and give themselves the benefit of any arbitrary advances in the prices of the necessities of life. They, of course, receive princely salaries, while their sub-managers and their employees frequently only get a living wage. Another point, too, is that the money taken from the public in every village and citv is sent in each day to the head office in some large city. Each community in this way is drained of its cash in circulation. Of course, one would not classify some of the big departmental stores as chain stores. I now refer to the huge organisations that are controlled by one or two in dividuals,”