Life — November 16, 1928 — page 14: what you’re looking at

Machine-transcribed from the original scan — historical spelling and the odd misread are preserved.

VoLUME 92 November 16, 1928 Published by LIFE PU NuMBER 2402 BLISHING COMPANY 598 Madison Avenue, New York Cuarces Dana Gipson, President Cratr Maxwet, Vice-President Rosert Emmet Suerwoop, Editor LancHorne Gisson, Secretary-Treasurer One of the points in which this felicitous re- public is superior to the effete Old World is that the Europeans, as a general rule, hold their clections whenever they get heated up about some particular question; so that the clection answers that question either Yes or No, and somebody is bound to be disappointed. We hold our elections | at fixed intervals, and whatever topics happen to be exciting various sections of the country or classes of the population at the moment become the issues. Once in a long while a single question comes to} overshadow the rest, as did free silver in 1896; but as a rule the issues are so jumbled that no matter how the election comes out, you can always hold that the people voted Yes on whatever question ies nearest your heart. Happy is the na- tion in which everybody can win; or in which thinking you have won is, for the time being, as good as winning. One issue that was bound to be affirmed this year, whoever won, was the main- tenance of prosperity; the parties laid a somewhat different emphasis on it, but they were both for it. That was natural enough; what might have surprised the foreign observer was the amount of lung power expended on impressing the voters that they were both for it. It might have been taken for granted that no party would want to shove the country down- hill toward ruin. And the foreigner might have been surprised still more if he had taken a close look at this prosperity whose maintenance was so important. He would have found it generally admitted that the farmers are not prosperous; he would have heard it asserted by the opposition, and conceded, though not very loudly, by the party in power, that a good many people are out of work. This renowned prosperity, then, must reside principally in the industrial classes; the prosperous people are the American manufacturers. And what do the American manufac- turers say about it? The president of their National Association, a few days before election, estimated that forty per cent of the factories in the United States are oper- ating at a loss. No wonder he commented that “America has never been confronted by so many grave problems and dangers as at this feverish moment.” The foreign observer might have been excused for sup- posing that the main thing about pros- perity was “Try and get it,” not “Try and keep it.” But the invincibly opti- mistic American spirit remains persuaded |that the nation is prosperous, even if the people one knows are not. Tuanks to that same optimism, these statistics, even if accurate, are not quite so ominous as they sound. There has never been a time when a good many American factories were not operating at a loss in the hope that the loss might pres- ently be turned to a profit; and thanks either to our virtues or our luck, or per- haps a combination of both, that hope has generally, in the long run, been jus- tified. But things are happening to American industry that have never happened before. On the whole, it has the home market pretty much to itself; our imports are mainly imports of raw materials, And the home market is sold up, gorged with about as much as it can hold. So (quot- ing, again, the President of the National Association of Manufacturers, whose opinion is presumably not only expert, but as optimistic as the situation JUstifies) “of practically all commodities whic, America can produce it is producing roa ularly from fifteen to thirty per cent oe than it has the capacity to consume, o dispose of profitably in other markets.” How have we managed, so far, to dis pose of that surplus? As everybody knows, we have taken care of the overproductica of the present by selling it to the future, on the installment plan. We load ow. selves with all that we want, and tg that some day we can pay for it. But when that some day comes we shall stl] be loading ourselves up with more com modities to be paid for in a still more distant future; and as the productivity of American industry increases the date of ayment must be pushed farther and ‘arther ahead. It takes a truly heroic optimism to believe that this sort of thing can be kept up forever. There must be a limit to the amount of goods we can actually consume; certainly there is a limit somewhere, in time and in capacity, to the ability to pay for them. Two or three years ago, in the height of Coolidge prosperity, cheerful econ omists told us that the old theory of the business cycle, the inexorable alternation of good times and hard times, had been exploded; that we had discovered a magic formula that would keep good times go ing on forever. But that magic formula was only the increase of consumption on the deferred-payment plan to keep up with roduction; and if consumption reaches its limit, there is only one way to redress the balance. We must decrease production —work fewer hours; lay off men; ulti- mately, if need be, shut down factories. That means less money distributed as wages; which means defaulting on in- stallment payments; which means a still further decrease in production, and so on. It looks as if dat ole devil business cyde were still alive and kicking. Ixveep, the harder you look at our re nowned prosperity, the more curious things you discover. An earnest citizen was lying awake the other night worry: ing about the way the world is going, and his inability to do anything about it As his sleepless fancy wandered, he began to play with the notion of what he could do if he were gifted with omnipotence and enabled to perform any and every miracle that he thought the situation might require. It occurred to him that the worst thing in the world to“ay is the comicbooks.com