Business conditions in America—what is the meaning of the "recession", so-called?

Business conditions in America—what is the meaning of the "recession", so-called?  (1937) 
by James Hamilton Lewis

BUSINESS CONDITIONS IN AMERICA—WHAT IS THE MEANING OF THE "RECESSION", SO-CALLED?

Mr. LEWIS. Mr. President, I beseech the Senate to give me its audience for a few moments. I desire to submit some suggestions on a subject aside from the pending bill.

Mr. President, I put the query to this honorable body: What is the matter with America, and what is the matter with the people?

This morning from the press we read that the New York stock market—to take but a single barometer—has fallen precipitously for many weeks; that throughout the East uncertainty and general fear prevail; and that the belief prevails that this major recession has been caused to no small degree by the New Deal policies in general, and the tax laws of the Roosevelt administration in particular. It is said that this belief has become so general that for the first time since 1930 there appears to be a majority in Congress disposed against the administration and in behalf of the businessman. How can anyone be for the businessman and not be for the President? The President has constantly announced his advocacy of the business of the businessman.

Mr. President, I call to the attention of the Senate this statement. I invite you to consider also the fact that a statement of a similar nature comes now from San Francisco, Calif. I so read. I ask my colleagues, What does it mean that there should be in difierent parts of our country at this particular time such a concurrence by chosen voices in the denunciation of their own country? There is a union of these agencies in a condemnation of the administration of their Government. All this is, in such unison as we are now having it, disclosing for its purpose an intention to depress the confidence of our people in our own country, and evidently to drive the Members of this honorable body and their colleagues in another body to some purpose of those who are the authors of the system and inaugurated the conspiracy.

Mr. President, I invite the attention of my honorable colleagues to the fact that last night, in one of our great cities of the Republic, there arose a voice ostensibly in behalf of what are defined as manufacturers; another voice in another city raised up in behalf of what was said to be the expression of economists; and, in another part of the United States, a voice in behalf of what was said to be peace and confidence. We observe, sir, that each of these assailed their country on the same ground. These spokesmen attacked the administration for the same purposes. Each charges in similar phrases to each other that the country is falling into dismembered fragments. It is announced that the finance of the banks is frustrated and the credit of the country assailed to echo through the world. The standing of our country is so diminished by accusation as to leave it unworthy of the confidence of an American.

Mr. President, one looks in vain to find a justification for this sort of thing. We note we must feel that the manufacturers and finance are misrepresented. I again ask, Where in truth is this country? How in truth does it stand?

I concede, sir, that, in the ordinary mutations of business and commerce in all seasons, and daily, stock markets rise and fall; but behold this country as it stands as to honest material of just speculation on exchange! Our credit in finance today is greater than that of any other country on earth. Our standing before the world in credit is the very highest. Business in our land is prosperous, barring one or two instances, such, for example, as the decrease for a while in the demand for steel as building moves slowly and, if you please, something of a decadence in the -construction or selling of automobiles, caused by war, of nations decreasing export sales.

If you please, sir, turn about you. see the spectacle! Tile vaults of the banks are stifled with money. Our national credit is so high that on but day before yesterday the bid for the bonds of the Nation in a new Treasury finance exceeded by 15 times the necessity. These bonds pay but 2½ and 1½ percent.

At this time we behold, sir, seven great nations of the world tendering us their securities bearing from 5 to 7 percent, while the great commercial bodies all around us of an industrial nature—in many respects of the highest class—heretofore yielding splendid profits, tender their securities bearing from 5 to 7 percent. Yet our people demonstrate their confidence in the administration here in government; in the Treasury and its securities, in such manner as you have seen from time to time, particularly during the past few days, giving their preference and their confidence to the securities of the United States.

Sirs, there must be some reason behind these assaults which seem to come from so many quarters, so very far apart geographically, and yet seemingly of the same consistency, and almost of exactly the same language. Surely, Senators will have interest enough to ask themselves the question, "What is the purpose of this? Is it the hobgoblin of deranged minds?"

In one instance we are told from the East, "It is the Roosevelt tax laws." In another instance we are told, "It is the New Deal measures." In still another instance we are told, "It is the general policy of the administration."

What particular policy do these gentlemen refer to that has adversely affected the credit of this country? What particular thing do they assert has decreased, if you please, and demeaned the credit of the National Treasury? The President accedes to the business demand of the power companies, and to reducing and abolishing the taxes claimed to be burdensome. Business, finance, and agriculture are now in full cooperation. Is not that the state of completion of full confidence, trust, and success?

Where is the particular thing to which the megaphone, banquet, and radio proclaimers allude as causing the stock market to rise and fall that is of a legislative character? Is this the standing claimed as cannot be respected by honest men in the land? We ask the commanding question here: What is the motive behind these assaults, as well as what is the reason of these combinations concurring one with the other in misrepresentations of all true business and faithful business organization?

Mr. President, I beseech the Senate to hear me while I invite them to a bit of the history of the country. Do Senators feel there is something new in this particular course that has been taken at this time? Indulge me to the point of vexing your patience. I speak of that which is within your memory. I shall not hark back beyond that merely to recite recorded history.

In 1914, the off year after the election and preceding the Presidential election in 1916—and I hope the leaders of both political parties will catch this, because each participated in legislative action during the time—the World War was on the world. Promptly in 1914 there arose in this country suddenly and all at once a general assault upon the credit of the United States. There arose a hiss and scorn upon and a denunciation of anything there was of government. The result was that we could not get a cent to bring the farmers' goods to the railroads. We could not get the money to ship his goods to the consumer. The then Secretary of the Treasury, now the junior Senator from California [Mr. McAdoo], took the step, with the aid of the President, in putting the Treasury behind agriculture to get the products to the market.

At this time the securities of our land fell on the stock market with great suddenness; fright existed all over the land. Eminent gentlemen supposed to represent finance and commerce began denunciation upon their country. The administration was held up before the world as lacking worth or confidence in various respects. One charge was that our Nation did not join in war with haste. Then, secondly, the charge was made that the policies under the Wilson administration were the kind destructive of business, of credit, and of honor.

It may be that Senators feel that these charges initiated this feeling of unrest. Far from it. It was the product of the design. Hear me while I recite that under Theodore Roosevelt in 1906 and 1907, in the off year, war was going on between Russia and Japan, and promptly, with suddenness, came an assault on this distinguished President and his policies, denying him the right to respect, withholding the people's confidence from him. He was demeaned as lacking in intelligence. He was accused of being an anarchist and his legislation of being destructive to all principles and products of America.

It was then that in this honorable body Senators were compelled to find their recourse as refuge in different forms of legislation, some of which went by the name of railroad legislation and others by designation of Treasury finance.

But the fact is evident that we see how absolutely duplicated today is of that which was in 1914 an off year. Now, in the off year of this administration, while war is pending in Asia, occupying all of Asia, war in Europe induced by conditions in Spain, with a terror hanging over England and France because of Germany and Russia, we find the very same element throughout the land, directed by certain influences of the exact nature, duplicating the very conduct that we saw during these other days of war and under similar circumstances and situations. Behold the similarity and answer, "Why?"

We ask, "What does it mean?" May I ask the question of you, Mr. President, is it possible that these eminent speculators throughout the country bide their time to depress the stocks of their own Nation and then to purchase them in, and then to raise the price to the highest possible mark; then seize the products of the farmer from the farm, the results of the manufactures from the factories, at the very lowest prices to which they have been depressed, and then lift them to the very highest prices that monopoly will induce, and so sell them to the great profit of the manipulators? Is not that just what was done under the war days of 1914, following what was done under the war days in the time of Theodore Roosevelt in 1906 and 1907?

Now, what do we find? Is it possible, I ask, that these speculators have conceived that if they can start a policy in this Government of making every human being feel that whatever stock he possesses is already tainted with utter failure and dishonor and every form of undertaking is likewise, if you please, decreed to its death, that from this result they can frighten the body which we know as the Securities Commission from any further enforcement of the law that compels the showing of a just amount of property behind a stock before it can be issued? Is it possible these masters at last conceive again what they did in 1907 and 1914, and what we know they did in 1929—that by doing this they can have those who are possessed of anything dispose of it at any figure, and they can then issue new stock in the form of certificates with nothing to sustain it but water and audacity, and then sell those stocks to America under whatever guise they please, while their rottenness will rob the widows, cheat the poor, and leave the country bereft of its financial honor?

Let us have no misunderstanding. Let us have a true understanding. I propound to my honorable colleagues of whatever political faith, How could there have been in San Francisco in one night, in the city of New York the same night, in a town in New England the same evening, and in the city of Washington the same noon, the very same speeches upon the very same ground? I hope the honorable gentlemen of the press will not fail to note that I openly charge that it could not have been done without some understanding had preceded it. There is no system which the mind can devise and now pronounce that there could have been an induction of that nature to the undirected mind that such could have expressed itself in harmony of words except that their minds were completely dominated by suggestion or direction from some superior, subterranean, and controlling force.

We come to the point. Here are the businessmen of this country anxious to join with the President, the President anxious to join with them, in complete communion and harmony. There is not the slightest dissatisfaction among those who are the real business. The toilers heretofore seem to have smoothed out their conflicts in the unions and are living together again in harmony, while we stand before the world everywhere with credit undisturbed, with honor conceded, with the very highest degree of commercial grandeur. We are the one and only nation in the world wholly at peace with itself. There are no riots in our land among our people. There are no disturbances among our people from fright or terror. There is no sense of abhorrence or shuddering upon the theory we are on the verge of war. There is nothing that indicates an alliance, or can be, with foreign forces to join with them in controversies they may have with their neighbors in the prospect of war they may have with other nations.

Why should the countrymen in our own land choose to dishonor our own country by discrediting it upon a false basis and holding it up before the world as unworthy of legitimate confidence that attends all business enterprises? Who is it that will profit by this?

When those gentlemen, whoever they are, which have frightened the poor woman with a small security to have her sell it at a complete loss and robbed the estates of the little possessions which they may have from which income may have been afforded, and then the little-business man shall be compelled to get rid of what he possesses on the ground that what he has is a loss and then induced to enter doubtful investments again, this result will reproduce exactly the situation of 1929-30. Will those people who are the creators of the desecration have been rewarded when they have brought disaster upon their own people, set dishonor upon their own Nation. and brought disgrace upon their own countrymen?

Where are those who are to be called statesmen? Let us give out a word from this honorable body. Those people are deceiving none who have intelligence. They will not be further allowed to mislead those of patriotism. The point is clear, the understanding is evident, that the dishonor behind it is one that has been clearly calculated to result in confusion and embarrassment.

On this floor at this moment, daring to be something of a spokesman for my honorable colleagues on both sides of the Chamber, I announce the time has come when we here reveal these people and now declare to them that this Government will not yield to peculators in their offense nor to speculators in their crime. This is a Government of patriots who will sustain their country by every sacrifice. This is a body which will stand squarely in defense of our country. We insist upon the indulgence and enjoyment of prosperity by its whole people and the patriotism of this Nation to denounce and punish all conspiracy against the people and the Nation of America.

I thank the Senate for allowing me to break into the debate at this time. [Applause on the floor.]