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The Music Trade Review
No Excuse for Pessimism in Business
(Continued from page 3)
having gained two hundred million dollars
($200,000,000) during the last year and bank de-
posits are becoming almost liabilities because
of the lack of demand for funds from business,
which is depressed on account of the buying
power that is tied up by doubt and fear of the
future. Commodity prices are getting lower
and lower because few seem to realize the
golden opportunity to purchase raw materials
at attractive prices. All records of the past
show us that commodity prices never remain
long as a non-profit-making level, which is en-
couraging, to say the least.
I find entirely too many business men waiting
for better times, apparently hoping that by some
miracle this would come about, at least, I have
yet to meet the man who could tell me just
what we are waiting for or just what must hap-
pen. This is astonishing because the American
business man does not usually wait for some-
thing to happen. He finds out what the trouble
is and corrects it. In view of this characteristic,
it is in my opinion a serious reflection on Amer-
ican business to now sit idly by and wait for
better times. I find that many people are add-
ing to our troubles by preaching gloom and
spreading pessimism for no good reason that I
can see except, if bad times continue, to be
able to say "I told you so," and I find others
going so far as to belittle the efforts of those
who are trying to restore confidence.
Country's Wealth Not Impaired
On the other hand, I find that the wealth of
the country has not been impaired. We as a
nation have just as many resources and have
the same desires and propensities we had a
year ago. I find that there is nothing wrong
with the country. We are still turning out
enough wealth each day to maintain the highest
standards of living ever reached by any people
in the world and I find that men of vision and
courage are taking advantage of present oppor-
tunities while others sleep.
I find that new industries are being born.
For example, it is estimated that well over one
hundred million dollars was expended this year
for miniature golf courses. Think of it—one
hundred million dollars for a new plaything.
According to newspaper reports, twenty thou-
sand people of Chicago in one day paid twenty-
five cents each, or a total of five thousand dol-
lars, to see an embalmed whale, and that five
other groups, exhibiting embalmed whales,
were making a very profitable tour of the
country.
In view of the universal cry of hard times,
this almost seems an absurdity, but proves that
the public has money and will spend it, and
confirms my belief that even now there is a
good market for the products of any industry—
both at home and to some extent abroad—if
they are well made and fairly priced. It may
be a buyers' market, but the market is there,
if you have the goods.
Each Depression Offers a Lesson
In reviewing the past, I find that we have
had many business recessions and business de-
pi essions. We survived them all, however, and
wo were wiser and stronger from the experience.
We learned a lesson each time and we have
learned a new lesson this time. Conditions
generally will be healthier because of our ex-
perience. The depressions of the past rarely
lasted more than a year. Therefore, based on
past experience, the present depression has
even now run its course, besides, I have been
unable to find any good reason, nor has any-
one been able to advance any good reason, why
a depression must run its course, why the cycle
cannot be shortened, after the cause has been
removed.
As I said before, I believe that the cause of
our recent business illness has now been re-
moved and that we are recuperating, but much
more slowly than need be because of not only
our own fears but because of the preaching of
pessimists and because of many bad examples
that are constantly before us, such as closed
factories, breaks in the stock market, and idle
working men. Recuperating business is not as
fortunate as the recuperating man to which I
referred. Man can feel himself getting better
and his doctor encourages him. He is not de-
pendent upon anyone else for his complete
recovery. When the business of a whole nation
is ill, however, we are dependent upon each
other. We require good examples and simul-
taneous recuperation and cooperation, not only
between industry and capital, but also with
tite working man.
Must Establish Confidence
It is, therefore, my opinion that in order to
avoid a slow, tedious and expensive convales-
cence, we must re-establish confidence. We
must have the courage to start and we must
then all pull together. No one industry or
group of industries can do it alone. Factories
must resume normal operations. Merchants
must replenish their stocks. We must band to-
gether. We must cooperate and the watchword
is "Confidence." We must first have confidence
ourselves and then by our words and actions
we must instill confidence in others. Industry
and capital must show the way. They must not
expect the working man to be the first to have
confidence that the depression is over and be-
gin buying their products until industry and
capital, to whom the working man looks for
guidance, have set an example and until he has
been offered work and has lost that doubt and
fear that always exist during periods such as
this.
I may be wrong, but I see no sound reason
for waiting for better times. In fact, I am
convinced that it is a mistake to do so. Let
us face this problem as American industry usu-
ally faces its other problems. Let us simulta-
neously do something instead of sitting back
and twiddling our thumbs. I believe that time
has already effected a cure, but we must all now
have confidence and help in the convalescence.
United we must give American business a little
start and then confidence will grow by leaps
and bounds.
Confidence begets confidence. One factory
with smoking chimneys is worth a thousand
talks such as this. What we need is action
instead of words. In my opinion there is really
nothing wrong with business today except fear
of the future'and I believe that business will
continue to stagnate until this fear is removed.
We have much more to lose by remaining idle
than by going ahead.
What the RCA Victor Co. Is Doing
The resuming of normal operations in one in-
dustry will cause other industries to resume
normal operations and they in turn still others.
It will pyramid rapidly. For example, on Janu-
ary 1 of this year, as a result of the depres-
sion, we found ourselves with a mere skeleton
organization of less than 4,000 people. Our
industry as a whole had tremendously over-
produced in 1929. Therefore, there was no
sound reason to continue running our factory
and adding to the trouble by building more
radio. Indeed, we might have been justified in
closing our plants down tight, sending every-
one home and waiting for times to get better.
Our board elected to do otherwise, how-
ever, and we utilized the first six months of
the year not in producing more radio but in
enlarging and modernizing our factories and
equipment so that we would be ready for the
radio season this fall. We did not permit the
thought that there may not be a radio reason
this Fall to deter us. We gradually increased
the 4,000 on our payroll in Camden and spent
during the first six months of this year over
twenty-nine millions of dollars for materials,
machinery, tools, equipment and factory build-
NOVEMBER, 1930
ings. If one-half of this sum was converted
into labor, we furnished employment outside of
Camden, in other industries, between January
1 and July 1 for over 15,000; and the buy-
ing power of these people furnished employ-
ment for many other thousands.
We now have on our payrolls in Camden
over 25,000. The materials, supplies, etc., which
we have and will purchase between July 1 and
January 1 will furnish employment outside
of Camden for over 38,000. Our distributors and
dealers will employ approximately 77,000 in the
merchandising of our products, making a grand
total of over 140,000 people for whom our
company is directly and indirectly furnishing
employment. These 140,000 wage earners in
turn will spend their income for various com-
modities and thereby furnish employment for
many, many more thousands, and these addi-
tional thousands, through their expenditures for
the necessities of life, will again furnish em-
ployment for other thousands, and so on.
This must be a cooperative movement, how-
ever. We cannot depend upon our employes to
purchase all the radio sets we produce, but they
will purchase clothing, automobiles, foodstuffs
and the other necessities of life if we can keep
them employed. Hence, it is up to the other
industries to try to put more of their employes
back to work so that they can buy our product.
There must be reciprocity. If every industry
in the United States that is now closed down
or working part time would resume normal op-
erations, we would almost immediately have
prosperity, despite the fact that this depression
is world-wide.
In seeking reasons for confidence, we should
realize that, after all, business now is not very
far below a normal year and it is a mistake to
compare it with that of a year ago when it
was abnormal and unhealthy. I believe it
should be compared with a normal, healthy
year and then, I think, you will find that the
recession is only about 10 per cent, which
should not be hard to overcome, if we our-
selves have confidence and diligently apply our-
selves to restoring confidence in others.
How can this best be done? Surely, keeping
factories closed and keeping people out of work
will not do it. Surely, waiting for the other
fellow to start will not do it. Surely, waiting
for the working man to begin buying before he
has a job will not do it. Waiting for times to
get better is certainly not the right thing to
do. That process takes too long and costs too
much. The thing to do is for industry to take
the lead. Give our public a reason for not fear-
ing the future and they will begin buying.
Their buying power is still large, but their dis-
position to buy is slack and selective and will
continue so until they have jobs and their con-
fidence is restored.
If every wage earner in the United States
would buy now to the extent of an additional
15 cents a day, it would release enough capital
to employ approximately a million unemployed
•it $5.00 per day wage. It would mean two billion
one hundred ninety million dollars ($2,190,000,-
000.) back into circulation per year. The differ-
ence between prosperity and hard times in this
country after all is only the additional expendi-
ture of $1.00 per week per capita. Quoting
Mr. B. C. Forbes, "Let one million of America's
men of means, men of brains, men of power,
men of influence cast out fear and act with faith
and confidence in America's future and we will
discover that we have been frightened by
ghosts."
It was very wrong in 1929 for anyone to be-
lieve that the abnormal prosperity of that year
could last and I believe that it is equally wrong
now for us to wait for something to happen,
for us to continue to be pessimistic. Let us
provide work for our people and thereby re-
store their confidence. When that is done,
prosperity will be here or, as Mr. Dwight W.
Morrow has just said: "About the time we make
up our minds the depression is over it will be