DECLINE IN PROSPERITY

Waikato Times, Volume 108, Issue 18140, 3 October 1930, Page 7

DECLINE IN PROSPERITY

POSITION IN AMERICA.

PRESIDENT REVIEWS CAUSES.

SPECULATION; OVER-PRODUCTION

United Press Assn.—Elec. Tel. Copyright. (Received October 3, 9.30 a.m.) NEW YORK, October 2. A message from Cleveland (Ohio) states that the President, Mr Hoover,, addressing the American Bankers’ Association, said: “We have had severe shocks, 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 we have the assurance of our ability and economic strength to .overcome this decline. The depression is world-wide; its causes and effects lie only partly in the United States. Our country is engaged in overspeculation In securities, which crashed a year ago, but perhaps an even larger Imminent cause of our depression has been the effect of the collapse of prices, following over-produc-tion of Important raw materials, mostly In foreign countries.

Particularly had the 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.”

Mr Hoover continued: “These major over-expansions have taken place largely outside the United States, and the collapse has reduced the buying power of many countries. “Prosperity has been temporarily affected by various causes. On some occasions it has been accompanied by political unrest, such as in Brazil, Columbia, Chile, Peru, Mexico, Australia, Canada, India, China, Argentine, Cuba, and Java, but readjustments in prices are now being made. 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 degree to free ourselves of the world influence, and make a large measure of independent recovery, because we are so remarkably self-contained. We shall need mainly to depend upon ourselves for recovery, as other nations are in greater difficulty than we are, and we shall need again* to undertake to assist and co-operate with them. “There is no simple explanation of these movements, and this is not the occasion for an anlaysis of the many theories —such as too little gold, or the inflexible use of it. Whatever the remote causes may be, the immediate cause of most of the hard limes is inflatory booms. These strike some sentiment of economic life somewhere in the world, and their re-echoing is destructive. The result will bring depression.

“We may safely assume that our economic future is safe as far as it is dependent upon the competent handling of problems of productivity, but one result is a further advance toward stability which is even more urgent, for with the higher standards of living the whole system is more sensitive and penalties of instability more widespread.” The President concluded by saying: “Any recession In American business Is but a temporary halt ,ln the prosperity of a great people.’’