November 19, 1929: Statement on the Economy
THE ECONOMY AND PUBLIC CONFIDENCE
We are dealing here with a psychological situation to a very considerable degree. It is a question of fear. We have had a collapse in the stock market, out of which a good many people have lost money, and a lot of people who could not afford to, and a lot of unfortunate people have been brought in, the effect of which in the American mind creates an undue state of alarm, because our national thinking naturally goes back to previous occasions when events of that character have had a very considerable bearing upon the business situation, and in its final interpretation it is employment.
Now, a great many people lifted their standards of living, and naturally the effect of such a thing tends to decrease consumption particularly for luxury and semi-luxury, and those trades are no doubt still affected.
But this occasion so far differs from all others in that the credit situation in the country is entirely isolated from it due to the Federal Reserve and the banks, and there is no credit consideration involved. But the natural recovery of increased interest rates by the withdrawal of capital from speculative securities takes that capital ultimately back into industry and commerce. It is ordinarily the tendency of industrial leaders and everyone else to sit back to see what happens and to be a little more cautious in his business than he might otherwise have been that we have to deal with.
We have also to deal naturally with some unemployment in the semi-necessity trades. But the real problem and the interpretation of it is one of maintenance of employment. This is not a question of bolstering stock markets or stock prices or anything of that kind. We are dealing with the vital question of maintaining employment in the United States and consequently the comfort and standard of living of the people and their ability to buy goods and proceed in the normal course of their lives. So that the purpose of this movement is to disabuse the public mind of the notion that there has been any serious or vital interruption in our economic system, and that it is going to proceed in the ordinary, normal manner, and to get that impression over not by preachment and talks but by definite and positive acts on the part of industry and business and [p.388] the Government and others. As I said before, I do not believe that words ever convince a discouraged person in these situations. The thing that brings him back is courage and the natural sight of other industries and other men going ahead with their programs and business.
So I wanted you to get that background upon it all, because it seriously concerns the press to give the confidence to the public that the business fabric is now organizing itself, taking steps on its own responsibility to carry on; that it is going to go even farther and stretch itself to meet any possible condition of employment is the thing that will give courage to the public rather than to say to them every day that they should not be alarmed. So that I am trying to get this problem across by action in different industries and other groups rather than by too much talking, and, therefore, I don't want to talk about it. I want the action to speak for itself. These conclusions are not a statement from me. That is the conclusion of those men who were present.