The Sun.
London, England, 1867-03-09 00:00:00

Why Business is Dull.

For the last two years we have grown •so accus-
tomed to our " unexampled prosperity " that we
are loth to admit the possibility of any change, and
are slow to give heed to paragraphs like the following,
culled almost at random from the newspapers within
a week or two :—" The principal corporations in
Lawrence, Massachusetts, have notified their em-
ployes of a reduction in their wages of 10 per cent."
"Sixty bookbinders in Hartford, Connecticut, struck
yesterday for higher wages, their pay having been
lately reduced 25 per cent." " The coal-miners of
Pittsburgh have quit work on account of an attempt
to cut down their wages." " The Lowell Manufac-
turing Company are running their mills on time."
"All the rolling mills of Wheeling have stopped
work, and 1,000 persons are consequently thrown
out of employment." " The wages at the Wamsatta
Mills, New Bedford, Massachusetts, have been re-
duced 10 per cent." At the same time the
complaint is ever 3 where general that business
is bad, prices are declining, Wall-street is in
a chronic state of discomfort, the internal re-
venue receipts are falling off, the reduction
of the national debt has stopped, the failures
for the year have again increased to more than double
the amount of any year since 1861, the railroad re-
ceipts are growing less, and gold has again advanced
from 1314. to 139. In short, business matters and
business prospects generally, are in a very unsatis-
factory condition, and the whole country, but
recently engaged in a grand chorus of glorifica-
tion over our prosperity, is now getting ready to
indulge in the corresponding fit of depres-
sion. It is worth while asking, What is the matter ?
Answers are plentiful, but none seem to us quite
satisfactory. Contraction of the currency, says
one. True, the currency has been contracted about
twenty millions since June 1, or about two and one-
half per cent. in eight months. But it is likewise
true that business continued extremely good, in
spite of contraction, until near the end of the year ;
that money, in spite of contraction, was always
easy ; that there was no contraction in January,
ylNe'tal Wall-street, t Januaryreet , and we
that
in witnessedthesam
ethemonth
o ngreat f
January,panic i
n
in which there was no contraction, business was
worse than ever. The fact is, that as inflation had
nothing to do with the improvement in busines, so
contraction had nothing to do with the depression
in business, except by its effect upon the imagina-
tion of thoughtless speculators. Another answer
is : the impulse of the enormous expenditures by
Government is wanting. But the heavy expendi-
tures of Government ceased nearly two years ago,
while the country has been unusually " prosperous"
until within the last two or three months. The
friends of Mr. Johnson point to Congress as the
cause. The Radicals say the President's policy is
to blame. Free-traders throw the responsibility
upon the tariff. Protectionists argue : our business
is ruined by the competition of the products of
pauper labour in Europe. The real cause of the
depression in business is, in our opinion, as follows :
the mischievous system, born of national ignorance
and national selfishness, of raising money by loans
instead of taxation (thus creating the national
debt), has deluded us into the belief that we were
prosperous and were increasing our wealth, while
we were in reality eating up our capital. From
this delusion we are being gradually but surely
awakened by that great, stern, silent, but impres-
sive teacher of finance, the tax-gatherer. We are
not going to trouble our readers with statistics, but
we must use a few figures (correct ones though)
for the sake of clearness. In the year 1860 the
people of the United States possessed and used an
aggregrate capital of 16,000 million dollars worth
of property, by the aid of which the combined
labour of the whole people produced annually addi-
tional property to the value of further 8,000 millions.
This annual product sufficed to furnish the whole
people with food, shelter, clothing, and such luxuries
as each one, according to his individual gains, could
afford, and to leave a surplus besides. This surplus
or annual saving amounted to about eight per cent.
of the total capital, or to about 640 millions worth
of property. In other words, the whole people of
the United States produced annually property worth
8,000 millions, consumed annually property worth
7,360 millions, and saved annually property worth
640 millions. Had the annual production of
•a
pro-
perty increased since then ? We have no reliable
data in the shape of figures ; but when we know
that one-third or one-fourth of the entire number
of males of the chief producing ages were under
arms for from one to four years, and one-tenth
of them were killed or permanently disabled, it is
safe to assume that production has not increased since
then, but that it has actually diminished. Apart
from this assumption, there are many scattered in-
dications that production has really diminished, and
of these indications the most striking certainly is
that " the decline of industry" and " the diminu-
tion of products," which play so important a part in
Mr. M'Culloch's report to Congress, in Mr. Well's
report on the tariff, and Mr. Morrill's recent speech
on our finances, are, by almost universal consent,
accepted as facts, and are daily quoted as the worst