Economic damage

“ We must act now to reverse these dangerous trends, which constrain the growth and dynamism of our economy, impair the creation of high-quality jobs, and threaten America’s economic standing in the world. ”

“ When the resources have been depleted, a precipitous collapse of the economic system will result, manifested in massive unemployment, decreased food production, and a decline in population as the death rate soars. ”

“ After having increased production to a considerable extent, it failed in its endeavours to regulate it, and struggled hopelessly in the toils of inextricable difficulties.
"'You are not totally ignorant, comrade, of the economic disturbances which filled the twentieth century. During the last hundred years of the capitalistic domination, the disorder of production and the delirium of competition piled up disasters high. The capitalists and the masters vainly attempted, by means of gigantic combinations, to regulate production and to annihilate competition. ”

“ The disastrous consequences that must of necessity follow on the economic order as it is constituted at the present time are already in evidence,—strikingly so in the case of the European breakdown. The owning class society is coming to an end—falling of its own weight. The time has come when the producers must take the control of the world into their own hands or suffer disaster. ”

“ Such fall of prices has destroyed the profits of legitimate industry, injuring the producer for the benefit of the non-producer, increasing the burden of the debtor, swelling the gains of the creditor, paralyzing the productive energies of the American people, relegating to idleness vast numbers of willing workers, sending the shadows of despair into the home of the honest toiler, filling the land with tramps and paupers, and building up colossal fortunes at the money centres. ”

“ But notwithstanding all these facts I admit there are evils, serious evils, and much distress in the manufacturing districts; many are still out of employment, and in many branches of trade wages are low. We have violent fluctuations in trade, and periods when multitudes endure great suffering and it becomes this House to inquire why do these fluctuations occur, and what is the great cause of their suffering. I attribute much of this [Pg 611] to the mistaken and unjust policy pursued by this House, with respect to the trade and industry of the country. ”

“ These problems of job control, of wealth and income distribution, of industrial inter-relations and of the relation between the state and industry are pressing for solution in every important centre of modern economic life. Each constitutes a disturbing element and contributes its mite to the aggregate of social instability and unrest that are racking the economic world. ”

“ Bankruptcy and Chaos [Pg 28]
World economic affairs are in a muddle. Famine has gripped Central Europe since 1918; unemployment is rife in Japan, Argentina, Britain, and the United States; business depression is felt in all of the principal industrial countries; producer and consumer alike find the world's economic machinery sadly out of gear. ”

“ The destruction of the social and economic structure of Christian states will also be brought about by the destruction of industrial prosperity, through speculation and constant strikes, “throwing masses of workmen out of employment,” artificially raising wages, thus increasing the cost of the necessaries of life, and finally by bringing about a general economic crisis and the disorganization of financial systems. ”

“ That the continued and increasing depression of the manufacturing, commercial, and agricultural interests of this country, and the wide-spreading distress of the working classes, are most alarming:—manufacturers without a market, and shipping without freight; capital without investment, trade without profit; and farmers struggling under a system of high rents, with prices falling, as the means of consumption by the people fail; a working population rapidly increasing, and a daily decreasing demand for its labour ”

“ Businesses will suffer because customers will have less money to spend. The longest these cuts remain in place, the greater the damage. Economists estimate they could eventually cost us more than 750,000 jobs and slow our economy by over one-half of one percent. ”

“ Added to which evil comes the still greater one—an extensive damage to the organization of society. Numerous importing, producing, and distributing establishments are swept away; tens of thousands of their dependents are left without work; and before the industrial fabric can be repaired, a long time must elapse, much labour must lie idle, and great distress be borne. ”

“ The fall in the value of many stocks and securities held by the banks forces many brokers and speculators to convert their resources into ready money. This is the moment of danger; weak enterprises find their foundations crumbling, and there are many failures. [6] The falling prices, the shattered credit, and the financial losses force many factories to close, and many workmen are thrown out of employment. This moment of widespread loss is the crisis, It is followed by another period of low prices and of small output, and therefore of profits small or negative in many industries. ”

“ And, without consumption, what does production amount to? What does it avail us that our stores and granaries are overstocked, if the people are unable to buy? The thing is reduced to a cruel mockery when stores and granaries are over-gorged, while people clamor in vain for clothing and food, and drop dead within reach of these prime elements of warmth and sustentation.
What does it avail us if the balance of trade be in our favor by one, or two, or three hundred millions of dollars, if this result be obtained by the degradation and death of our own people? ”

“ The result is just what we have seen in a former instance: all that any man may make by buying Foreign goods cheap, he loses ten times over by the decline of his own property, product, or labor; while to nine-tenths of the whole people the result is unmixed calamity. The disastrous consequences to a nation of the mere derangement and paralysis of its Industry which must follow the breaking down of any of its great Producing Interests have never yet been sufficiently estimated. ”

“ The absolute and instantaneous destruction of half the entire movable property of the world, including houses, ships, railroads, and other appliances for carrying on commerce, while it would be felt more sensibly at the moment, would not produce anything like the prolonged distress and disorganization of society that must inevitably result from the permanent annihilation of one-half the metallic money of the world. ”

“ With all the elements of national wealth in abundance, our manufactures were suspended, our useful public and private enterprises were arrested, and thousands of laborers were deprived of employment and reduced to want. Universal distress prevailed among the commercial, manufacturing, and mechanical classes. This revulsion was felt the more severely in the United States because similar causes had produced the like deplorable effects throughout the commercial nations of Europe. ”

“ Thus the division of labor, without which production would be almost nothing, is subject to a thousand inconveniences, the worst of which is the demoralization of the laborer; machinery causes, not only cheapness, but obstruction of the market and stoppage of business; competition ends in oppression; taxation, the material bond of society, is generally a scourge dreaded equally with fire and hail; credit is necessarily accompanied by bankruptcy; property is a swarm of abuses ”

“ Almost every conceivable cause has been assigned, or given as a partial explanation, for the stagnation of trade. A careful analysis of these recurring periods in the history of our country in 1837, 1848, 1857, 1873, 1887 and 1893, shows many partial causes of disaster in exchange, affecting the peculiar nature of each panic, yet one especial cause is evident in them all. That cause is large investment in fixed capital from which no immediate returns can be expected. ”

“ Everything seems to be going on as usual, commerce and industry vigorous and expanding, when suddenly there comes a shock, as of a thunderbolt out of a clear sky—a bank breaks, a great manufacturer or merchant fails, and, as if a blow had thrilled through the entire industrial organization, failure succeeds failure, and on every side workmen are discharged from employment, and capital shrinks into profitless security. ”

“ He explained the principle of this rise and fall of values, with his usual lucidity, to a committee of the House of Lords, which investigated the panic of 1847:—
“Monetary distress tends to produce fall of prices; that fall of prices encourages exports and diminishes imports; consequently it tends to promote an influx of bullion. I can quote a fact of rather a striking character, which tends to show that a contracting operation upon the circulation tends to cheapen the cost of our manufactured productions, and therefore to increase our exports.” ”

“ The results of these strikes in decreasing the purchasing power of employés and thus causing overproduction, and in discouraging enterprise and increasing the cost of capital, serve to spread their effect throughout the whole industrial community and thus cause an actual loss and injury many times that borne by the parties directly engaged. ”

“ New debts require new taxes; and new taxes must increase the price of provisions: new acquisitions of wealth, by decreasing the value of money, still aggravate this evil, and render them still dearer; this dearness of provisions must augment the price of labour; this must advance the price of all manufactures; and this must destroy trade; the destruction of trade must starve the poor, expel the manufactures, and introduce universal bankruptcy, riot, and confusion. ”

“ Outside of the defects of your currency, and your speculation, which are most prolific sources of industrial disaster, comes that blind over-production, entirely undirected by any reliable or authoritative knowledge of the existing capacity to consume. ”

“ Others were partly ruined, and beyond their borders, over a wide area, the trembling of the earth toppled houses, annihilated property and transformed riches into poverty. The cost in life can be reckoned. The money loss will never be computed, for the appraised value of the wrecked property conveys no notion of the consequences of the almost complete paralysis, for a time, of the commercial operations by means of which men and women earn their bread. ”

“ Or you can favor it—and thereby favor, instead of prosperity and progress, bankruptcy for the owners, spiritual bankruptcy for its supporters, and, worse than all, a wide-spread business depression, which will force capital elsewhere, slow down and stop the wheels of industry, drive the storekeepers out of business, and drag your own wives and families into want, poverty, ultimate degradation and death.
"The smoke from those mining settlements and furnace stacks upon the mountain above our iron city is the symbol of life—life for all of us. ”

“ What always happens when scarcity appears is that "the trade," indeed the whole world, insists upon the duty of increased production. As a result, wages and everything necessary in production advance. Costs sink to a second place. People having been frightened inevitably hoard, and finally when the joint effort of the world oversteps the market, there come the collapses called "panics," and thousands of business men are swept to ruin. ”

“ Every Cause hath been assigned except the true one, which seems to be "the sinking Value of Money, arising necessarily from the exorbitant Increase of Trade and Wealth." If this be so, it follows, that the Evil is incurable, excepting only by a general Augmentation of the Wages of the Poor.—Now This, which is the necessary Effect of the Exorbitancy of Commerce, naturally tends (by the increased Price of Manufactures) to the Destruction of Commerce. If the Exorbitancy of Trade should still run higher, this Evil will be aggravated in Proportion. ”

“ Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again. ”

“ The truth is, Sir, the great loss, the sore embarrassment, the 248 severe distress, arising from this Veto, will fall on the public, and especially on the more active and industrious portion of the public. It will inevitably create a scarcity of money; in the Western States, it will most materially depress the value of property; it will greatly enhance, everywhere, the price of domestic exchange; it threatens, everywhere, fluctuations of the currency; and it drives all our well-settled and safe operations of revenue and finance out of their accustomed channels. ”

“ You have closed mills instead of opening them, thrown out of work thousands, lowered the price paid for raw material, bringing ruin to its producers, increased the price charged for your products to the ruin of the consumer, and saddled millions of fictitious debts on the backs of their children yet unborn. ”

“ But the injuries resulting from the superior pressure upon governments of organized bodies of producers and merchants who have things to sell, to the detriment of the consuming public who have only buying needs, are too grave matters to be neglected here. ”