The excerpt below is from the testimony of Oscar Ameringer during the Unemployment in the United States hearings before the House Subcommittee of the Committee on Labor in 1932. Made just a few years into what became known as the Great Depression, it demonstrates how integral supply and demand are to each other, and also illustrates the irony of their relationship in an economy lacking national confidence.
During the last three months I have visited, as I have said, some twenty states of this wonderfully rich and beautiful country. Here are some of the things I heard and saw:
In the state of Washington I was told that the forest fires raging in that region all summer and fall were caused by unemployed timber workers and bankrupt farmers in an endeavor to earn a few honest dollars as firefighters. The last thing I saw on the night I left Seattle was numbers of women searching for scraps of food in the refuse piles of the principal market of that city. A number of Montana citizens told me of thousands of bushels of wheat left in the fields uncut on account of its low price that hardly paid for the harvesting. In Oregon I saw thousands of bushels of apples rotting in the orchards. Only absolute flawless apples were still salable, at from 40 to 50 cents a box containing 200 apples. At the same time, there are millions of children who, on account of the poverty of their parents, will not eat one apple this winter.
While I was in Oregon the Portland Oregonian bemoaned the fact that thousands of ewes were killed by the sheep raisers because they did not bring enough in the market to pay the freight on them. And while Oregon sheep raisers fed mutton to the buzzards, I saw men picking for meat scraps in the garbage cans in the cities of New York and Chicago. I talked to one man in a restaurant in Chicago. He told me of his experience in raising sheep. He said that he had killed 3,000 sheep this fall and thrown them down the canyon, because it cost $1.10 to ship a sheep, and then he would get less than a dollar for it. He said he could not afford to feed the sheep, and he would not let them starve, so he just cut their throats and threw them down the canyon. …
In Okalahoma, Texas, Arkansas, and Louisiana I saw untold bales of cotton rotting in the fields because the cotton pickers could not keep body and soul together on 35 cents paid for picking 100 pounds. …
As a result of this appalling overproduction on the one side and the staggering underconsumption on the other, 70 per cent of the farmers of Oklahoma were unable to pay the interests on their mortgages. Last week one of the largest and oldest mortgage companies in that state went into the hands of the receiver. In that and other states we have now the interesting spectacle of farmers losing their farms by foreclosure and mortgage companies losing their recouped holdings by tax sales.
The farmers are being pauperized by the poverty of industrial populations, and the industrial populations are being pauperized by the poverty of the farms. Neither has the money to buy the product of the other, hence we have overproduction and underconsumption at the same time and in the same country.