I then said this to the Congress:
"But the very vigor of the recovery in both durable goods and
consumers' goods brought into the picture early in certain highly
undesirable practices, which were in large part responsible for the
economic decline which began in the later months of that year.
Again production outran the ability to buy.
"There were many reasons for this overproduction. One of them was
fear--fear of war abroad, fear of inflation, fear of nation-wide
strikes. None of these fears have been borne out.
". . .Production in many important lines of goods outran the
ability of the public to purchase them. For example, through the
winter and spring of 1937 cotton factories in hundreds of cases
were running on a three-shift basis, piling up cotton goods in the
factory, and in the hands of middle men and retailers. For example,
also, automobile manufacturers not only turned out a normal
increase of finished cars, but encouraged the normal increase to
run into abnormal figures, using every known method to push their
sales. This meant, of course, that the steel mills of the nation
ran on a twenty-four hour basis, and the tire companies and cotton
factories and glass factories and others speeded up to meet the
same type of abnormally stimulated demand. The buying power of the
nation lagged behind.
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