This is a copy of a Time Magazine article from December 2, 1929.
Monday, Dec. 02, 1929
"I WILL APPRECIATE IT IF YOU WOULD MAKE IT CONVENIENT TO ATTEND A SMALL CONFERENCE IN MY OFFICE ON THURSDAY MORNING AT 10 O'CLOCK TO DISCUSS MATTERS CONNECTED WITH MY STATEMENT OF LAST SATURDAY"
Philip H. Gadsden, president of the Philadelphia Chamber of Commerce, received this telegram, hastily "made it convenient" to go to Washington. For "my statement of last Saturday" was, as all the world knows, President Hoover's announcement of a series of conferences to devise means of preventing the Stockmarket decline from affecting U. S. business.
Before leaving Philadelphia, Mr. Gadsden told reporters: "We will go to the meeting prepared to bring back to businessmen here full details of the President's plan and the steps we can take to make it more effective." These steps turned out to be a State conference and plans by Philadelphia for $65,000,000 municipal work.
Thus did a powerful city, a rich state, cooperate with the President. Other co-operation by the end of the week was evident in an imposing list of pledgers and pledges, including:
Leading employers: No reduction of wages.
Labor representatives: No agitation for higher wages.
U. S. Chamber of Commerce: Formation of a permanent national economic council to deal with emergencies.
Railway and industrial leaders: Expenditure on improvement and expansion.
Federal Reserve: Cheaper credit.
Congress: Bipartisan support of the proposed $160,000,000 reduction in Federal income taxes.
Treasury Department: Enlargement of public building program from limit of $248,000,000 to $423,000,000.
James John Walker: Quick commencement of New York City's $1,000,000,000 construction plan.
Interstate Commerce Commission: Prompt action on the railroad consolidation question.
Interdepartmental Sub-Committee: Awards of 15 ocean mail contracts by Jan. 1. requiring $200,000,000 ship construction.
Such guarantees that the wheels of business would not slow down under the sudden loads of Loss & Fright could be created only by a powerful force. To obtain that force President Hoover (while Statistician Babson shouted that Congress should adjourn, go home, allow the President to act alone) summoned the strangest gathering to come to Washington since the "dollar-a-year" men of the War. Merchants, Bankers, Manufacturers, knocked into the Cabinet Room, heard the President's plea, discussed the situation informally, pledged their support.
Although to the conference of industrialists and merchants* there came more great executives than to any of the other meetings, the most prominent was of course Henry Ford. Long has Ford been the name symbolic of U. S. mass production, U. S. prosperity.
Of what Henry Ford said at the meeting there is no record. It was only revealed that the automobile makers, represented by Ford and General Motors' Alfred P. Sloan Jr., were satisfied that 1930 would be a normal year.
While the conferees, except for Julius Rosenwald, who came late and stayed late, were preparing to go, Motor Maker Ford rushed to the lobby where newspapermen were gathered, handed them copies of a prepared statement. In it he explained the market break as the result of a business decline caused by two reasons: 1) "There was a serious withdrawal [because of speculative activities] of brains from business by men who would otherwise have been working out better designs for commodities and better methods of manufacture and planning to put more value into their products." 2) "American production has come to equal and even surpass, not our people's power to consume, but their power to purchase. . . ."
For a solution Mr. Ford proposed: 1) "Putting additional value into goods or reducing the prices to the level of actual value." 2) "Starting a movement to increase the general wage level."
Unusual was this Ford statement because he alone of the conferees spoke before an official White House statement was issued, because he openly differed from the President whose position is that there has been no business recession, only a threat of one. But more unusual and surprising did it become when Motor Maker Ford suddenly went back to the President, announced he would increase the wages of all his men.
Because this decision was made some time after the conference, one view was that it was impromptu, for publicity purposes. But in any case, the fact was that by advancing wages when other employers met to see if the present level could be kept where it is, Henry Ford again took a solitary stand, maintained his position as Most Original U. S. businessman.
Yet despite his difference with the President's opinion about the condition of business, the general note of the Ford economic analysis was similar to the Hoover position that: Past market breaks created caution; caution hurt buying power; lack of buying power caused business recessions. Therefore: let the U. S. spend freely regardless of security levels.
At each conference the President sat in his regular chair, slouched over in one side, smoking a cigar, with his head cocked at an attentive angle. In calling the meetings he showed realization that U. S. Big Business, no longer feared, has reached a position where it is looked to as the big benefactor in times of trouble. Only agreement of big business to maintain schedules can keep U. S. money flowing freely, send miners into the earth, steel workers to the tops of high buildings, loaded freight cars along new steel rails.
In this agreement was not so much a promise of an orgy of unusual spending as a pledge not to curtail ordinary expenditure. In order to keep production up, each line of business must be sure other lines are running at full schedule. In this way did the conference give each leader assurance that he would be left holding no bag. Rumors of curtailment were denied. Merchant Jesse Isidor Straus of R. H. Macy & Co. said it was not true he had laid off 1,200 employes but that he had discharged 28, taken on 200. Other executives spoke along the same lines. Alexander Legge. Chairman of the Federal Farm Board, drawled, "It looks as if industry would have to begin scraping around to get employes instead of laying off anybody."
Occupation which will keep employes busy became evident when many a corporation backed its indefinite pledge to "keep going" with definite statements of plans. Odds and ends of the week's many announcements included the following:
¶ The Pennsylvania Railroad revealed that as part of its $100,000,000 electrification program it will soon order 150 giant electric locomotives to cost $16,000,000. At the Railway Association meeting in Chicago other lines gave estimates of their budgets, indicated 1930 railway expenditure of from $800,000,000 to $1,000,000,000.
¶ Bloomingdale's, Manhattan department store, planned to complete its $5,500,000 building program in three instead of five years.
¶ Camden, N. J., will employ 60,000 men in its $15,000,000 city, county and federal building plan.
¶ Youngstown Sheet & Tube Co., said its president James A. Campbell, increased its deposits in local banks so they would have funds to lend for constructive business.
¶ American Telephone & Telegraph estimated its 1930 expenditures for expansion at over $600,000,000. United Gas Improvement Co. placed its expansion at $41,000,000, $6,500,000 more than this year. Total utility construction during 1930 was estimated at about $850,000,000. Thus will utility companies, blamed as the most inflated of all before the break, be almost as big benefactors as the railways.
¶ E. I. du Pont de Nemours & Co., with current construction work involving some $16,000,000, announced that an additional $9,000,000 will be spent in 1930.
¶ "Advertising should go ahead with all of its characteristic force," said Dr. Julius Klein, Assistant Secretary of Commerce, in a radio speech. "Advertising ... is one of the most potent of business accelerations. . . . Any appreciable let-up in advertising programs would be unquestionably injurious."
¶ Honor of the first stock offering since the break went to Charles V. Bob & Co. who headed the marketing of $10,000,000 units of Federal Neon System, Inc.. a company which will acquire Rainbow Luminous Products, Inc., the National Neon Agency and the Neon tube business of Federal Electric Co., Inc.
¶ Robert Paine Scripps, chief stockholder of the Scripps-Howard chainpapers, said his system would soon spend several million dollars in building and plant extension.
¶ "There will be no curtailment of Wanamaker advertising" read part of a full page advertisement for the John Wanamaker Stores of Manhattan and Philadelphia. "We start distributing the third billion dollars of Wanamaker merchandise with the faith and action called for by the President of the United States."
*At the conference of industrialists and merchandisers were:
Secretary of the Treasury Andrew William Mellon
Secretary of Commerce Robert Patterson Lamont
Julius Rosenwald, Sears, Roebuck & Co.
Clarence Mott Woolley, American Radiator Co.
Walter Clark Teagle, Standard Oil of New Jersey
Owen D. Young, General Electric Co.
Matthew Scott Sloan, New York Edison Co.
Eugene Gifford Grace, Bethlehem Steel Corp.
Myron Charles Taylor, U. S. Steel Corp.
Alfred Pritchard Sloan Jr., General Motors Corp.
Pierre Samuel du Pont, E. I. du Pont de Nemours & Co.
Walter Sherman Gifford, American Telephone & Telegraph Co.
Samuel Wallace Reyburn, Lord & Taylor
Jesse Isidor Straus, R. H. Macy & Co.
William Butterworth, U. S. Chamber of Commerce
E. J. Kulas, Otis Steel Co.
George McCully Laughlin, Jones & Laughhn Steel Corp.
A. W. Robertson, Westinghouse Electric Co.
Redfield Proctor, New England Council
Philip S. Gadsden, Philadelphia Chamber of Commerce
Ernest T. Trigg, Industrial Relations Committee of Philadelphia
Henry Mauris Robinson, California Development Board
Julius Rowland Barnes, U. S. Chamber of Commerce
Railroad executives who met with the President were:
Richard Henry Ashtcn, American Railway Association
William Wallace Atterbury, Pennsylvania
John Joseph Bernet, Chesapeake & Ohio
Patrick Edward Crowley, New York Central
Agnew Thompson Dice, Philadelphia & Reading
Fairfax Harrison, Southern Railway
Leonor Fresnel Loree, Delaware & Hudson
Jeremiah Milbank, Southern Railway
John Jeremiah Pelley, New York, New Haven & Hartford
Fred Wesley Sargent, Chicago & Northwestern
Hale Holden, Southern Pacific
Unable to "make it convenient," Baltimore & Ohio's Daniel Willard stayed at home suffering from bronchitis.
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