PROFESSOR BONAMY PRICE ON COMMERCIAL DEPRESSION.
(To THE EDITOR OF THE " SPECTATOR:1 Sin,—On my return from abroad, I have seen the notice you -took, in your "Current Literature" of May 10th, of my article in the Contemporary Review, on the commercial depression ; may I beg the favour of you to allow me to say a few words with refer- ence to a remark made in it, which may convey a wrong impres- sion of my meaning on an important point ? I am described as ' -utterly scorning a reduction of production." It is quite true -that I consider the increased production of wealth the one sole remedy for the commercial depression. That de- pression has for its cause over-consumption,—the consuming and destroying of more wealth than is restored, by pro- duction. Impoverishment is the necessary consequence, and trade becomes depressed, because there are fewer goods to buy with, fewer things to give in exchange. The only possible cure for this impoverishment is an increased production of wealth. In this general sense, reduced production would be simply an absurdity. But there is another state of trade in which reduction of production would not only be expedient, but would also enforce itself, whether desired or not. It is not an event of universal trade, but of some particular trade, in which the capital at work, and the quantity of goods made, exceed the means of purchasers wherewith to buy. This is a wholly different matter from universal impoverishment. Here a particular form of wealth, special goods, are produced in quantities beyond the power of the market to clear away ; buyers sufficiently numerous and sufficiently strong are not forthcoming. As long as they fail to present themselves, reduced production must be had recourse to, however much sanguine producers may struggle on, in the
hope that to-morrow may be better than to-day. So long as buyers do not come forward to take away the goods at prices repaying cost of production, there must be a diminution of manufacturing, or ruin will overtake the business. This is a very obvious truth, and has been dwelt upon with much energy by many speakers and writers.
The remark in the Spectator might easily, under such cir-
cumstances, suggest to many minds the thought that this was the reduced production which I scorned in my article. So far is this from being true, that in, explaining the depression and its consequences, I have distinctly pointed out this condition of individual trades, and called it the second stage in the depression, the stage of over-production ; I have given de- tails as to the extent to which the construction of machinery for this over-production was carried. There is a third case of which I have spoken, not advocated by many Unions, to work fewer days in the week, and thus to lessen production, but to demand the same rate of wage for each of the working days as previously. This system I condemned, not because it diminished production, but because it increased the cost of production, thereby making the goods dearer, and consequently the number of purchases still smaller. To blame such a method of meeting a failing market, is not to pour out scorn on reduced production.
—I am, Sir, &c.,
Previous page
