UNEMPLOYMENT IN THE UNITED STATES 113 
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tions save parts of their respective incomes. The weakness of his hypothesis lies 
primarily in his failure to recognize the fact that income saved is actually promptly 
spent—its chief peculiarity being that it is spent for producers’ rather than for 
consumers’ goods. Thus, the corporation’s savings are largely used to construct 
new plants, install new machinery, and so forth. Savings not so spent are de- 
posited in banks which loan the money to others who spend it. 
As a matter of fact, economists long ago made the fact clear that there is never 
any danger of production outrunning consumption. Human wants so far exceed 
the total of goods available that for practical purposes they must be regarded as 
insatiable. The larger the product of a business enterprise, the greater its sales 
tend to be. The greater its sales, the more revenue it has available to buy materi- 
als and hire laborers. The money paid out for materials or wages is used by the 
recipients to buy other goods or services. And so supply and demand, production 
and consumption interact in endless spirals. 
From time to time the even flow is interrupted and depression results. Just 
what the forces are which break the circuit, economists are not yet able to state 
with any degree of certainty. Experience shows that, fortunately, the more 
serious breaks in the continuity of industry are usually short-lived. During these 
periods of maladjustment many commodities have to be lowered in price in order 
that the total supply produced may be sold. Occasionally there is some commod- 
ity which it is practically impossible to market at any price. These transitory 
conditions, however, do not in the least prove that either general overproduction 
or general underconsumption ever has prevailed for any considerable length of 
time in any country. 
SHIFT OF LABOR 
There is no evidence whatever to indicate that the trend of unemployment in 
the United States has been upward during the period of the new industrial revo- 
lution. What has actually been happening is this. Increased per capita income 
has enabled most families to spend larger proportions of their respective incomes 
for luxuries. Wants long unsatisfied were the desires for better homes, more 
travel, and more amusement. The period since 1922 has, therefore, been charac- 
terized by a great volume of residential building, by the construction of a lengthy 
system of automobile roads lined with huckster stands, restaurants, gasoline 
stations, and lodging houses. Hotels, restaurants, and theaters have expanded 
rapidly in the cities. To build and maintain these houses, roads, and service- 
rendering establishments has required an army of workers. As those desiring to 
work were, for the most part, already attached to other industries, it was necessary 
to outbid these industries for their services. This was done, with the result that 
the numbers employed have been diminishing in manufacturing, agriculture, and 
railroading. . . 
The loss of workers in these industries has caused little inconvenience to any 
one, because of the fact that improvements in technique have enabled the average 
employee to produce far more goods or services than formerly. As a result, the 
volumes of both manufactures and agricultural produce and the ton mileage of 
freight have been growing more rapidly than population, despite the diminution 
in the number of workers in each of these three fields. As Dr. William T. Foster 
puts it, each consumer’s dollar constitutes a vote, and these votes determine the 
course of industry. Consumers recently have voted out railways, factories, and 
farms in favor of new homes, automobile highways, hotels, and theaters. 
I call your attention to that, gentlemen, as a prelude to the economic 
shadows that fall upon the course of this discussion, and because I 
may possibly anticipate the inquiries that might otherwise come from 
the committee with respect to some of these questions which have 
been addressed to others. 
Now, Mr. Chairman, I want to discuss this bill, if I may, not in its 
parts but as a whole, because it presents a complete plan and the 
legislation is to be judged, it seems to me, in both its validity and its 
quality by its plan as a whole and not by any mere reference to the 
parts. Much of the discussion that has gone on here this morning 
has been addressed to something in which we all agree, and that is 
the incidence of a depression upon our social life and the necessity 
for intellicent consideration of the remedies that will remove that