"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.
"Thus by the autumn of 1937, last autumn, the nation again had stocks on hand which the consuming public could not buy because the purchasing power of the consuming public had not kept pace with the production.
"During the same period. . . the prices of many vital products had risen faster than was warranted. . . . In the case of many commodities the price to the consumer was raised well above the inflationary boom prices of 1929. In many lines of goods and materials, prices got so high that buyers and builders ceased to buy or to build.
". . . The economic process of getting out the raw materials, putting them through the manufacturing and finishing processes, selling them to the retailers, selling them to the consumer, and finally using them, got completely out of balance.
". . . The laying off of workers came upon us last autumn and has been continuing at such a pace ever since that all of us, government and banking and business and workers, and those faced with destitution, recognize the need for action."
All of this I said to the Congress today and I repeat it to you, the people of the country tonight.
I went on to point out to the Senate and the House of Representatives that all the energies of government and business must be directed to increasing the national income, to putting more people into private jobs, to giving security and a feeling of security to all people in all walks of life.
I am constantly thinking of all our people—unemployed and employed alike—of their human problems of food and clothing and homes and education and health and old age. You and I agree that security is our greatest need; the chance to work, the opportunity of making a reasonable profit in our business—whether it be a very small business or a larger one—the possibility of selling our farm products for enough money for our families to live on decently. I know these are the things that decide the well-being of all our people.