Steps to Economic Recovery outlined in a Cutlery Publication

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 “Recovery from a business depression involves a readjustment in the basic factors of our industrial structure. This process requires time and leadership. It can be hastened or retarded by what business men do. The period required to get back to a normal rate of activity varies with each separate cycle, and the experiences of former times do not furnish an infallible guide as to what will happen now.”  

Interestingly this quote is from an article in Paine’s Cutlery Journal dated January 1931. The article continues by pointing out the required steps to “readjust” from the economic period of that time-

  1. Prices, especially raw materials, must come down until they are more in accord with supply and demand factors and at levels more favorable for purchasers.
  2. Inventories of raw materials and finished goods have to be reduced and in many cases even below normal amounts.
  3. Money rates must be lowered and supply of funds available for businesses must be ample. Businesses need to have no fear of being handicapped by lack of credit facilities or high rates of interest in the near future.
  4. Production must be adjusted to consumption.
  5. Purchasing power must be built through savings and strict economy.
  6. Excess liabilities as represented by items such as large broker’s loans, installment payments outstanding, borrowing by member banks from the Federal Reserve Banks have to be liquidated and brought down to a more nearly normal basis.
  7. A saner attitude of adjusting operations and policies to facts rather than relying on unjustified and unfounded hopes must be adopted.
  8. A determination to act aggressively in remedying bad or unwholesome conditions have to be replace a policy of letting affairs drift in hopes that they will right themselves.

Scientific investigations must be conducted to develop new products, new machines, better ways of utilizing our natural resources and more efficient management methods are required.

All of these steps will represent achievement and begin laying the foundation for a sustained period of prosperity. 

We, therefore, continue to maintain that after a period of relative quiet which may extend into the opening months of 1931, business activity will gradually improve and reach normal again during the falls months of the year. Capable and determined business leadership by all will help make this possible.

Business men have already become tired of standing still or sliding downward and are now looking toward a recovery which they are determined to bring about. Whenever this recovery does take place we can be quiet sure that it will be outstandingly a “revival of the fit.”

Source: Paine’s Cutlery Journal,  January 1931

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Published in: on February 6, 2009 at 8:20 am  Leave a Comment  
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