Phenix gazette. [volume] (Alexandria [D.C.]) 1825-1833, 1826-10-04
COMMERCIAL REVULSIONS.
From The S7th No. of the Edinburgh Rerie'c.l

In entering on this inyeStlgatlon, IL 10 neSs'
sary to distinguish between those re3uisio",
which depend on political contingencies, anu
NAV therefore be considered as IN some i'1a-
sure accidental, and those which arise from ',ie
miscalculation Of individuals, or from some oeS
feet in the system under which the INDUSTRY VI y
any given country is conducted. Inc cauSea "a
the former are plainly beyond tne sphere y .''e
Fconon,is,. 1t is his business 10 determine
wbaf course government ought, under any CIV
on circumstances, to adopt, with view to the
increase of the public wealth; but it is lmposSl-
b,s for him to say a priori what IL tciU adopt
He can neither divine its measures, nor warn
those who may be injuriSasly affected by them,
ofthe approaching danger. We do not, there
fore. mean to make any observations on such
revulsions as are the immediate effect either OF
the measures of foreign governments, or OF our
own. but TO conhne ourselves exclusively 10
those which take place in the ordinary course Of
affairs. and which recent experience has shown
NAV be as sudden and violent as any that could
be occasioned by the breaking out OF war, or
the occurrence of great revolution
This class Of revulsions have their origin ell
Their. first. in the miscacuations CT those who
are engaged in the production of commodities;
or second. in the miscalcuations OF the mer-
chants who deal in them; or, thud, IN Huctoa-
ton of prices, caused by sudden change IN
the quantity, and, consequently, in the value oil
money. We shall take the liberty 10 submit
few observations on each ofthese heads.
/. With respect 10 the first class OF revulslons
mr. those which arc caused by the mlscalcula-
tons of the producers, they generally originate
in some arrangement OF the usual proportion
between the supply and demand oil certain spe-
cies of commodities. Suppose, for example,
that. owing either TO the opening OF new mar
bets. to change Of fashion, or TO any other
cause. the demand for cotton goods were con-
s;derabIy increased: The consequences OF such
increased demand would be, that the price OF
co,,ons would Immediately rise, and that the
manufacturers would obtain comparatively
bign profits. But the rate ofprohts In different
emnloyments has constant tendency.to equal
;tv. and itcan never, unless when monopolles
interfere to prevent or counteract the operation
or the principle of competition, continue Tor any
considerable period either higher or, lower IN
one than in the rest. AS soon, therefore, as this
rise in the price of co,tons had taken place, adj
ditional capital would begin to be employed In
their production. The manufacturers already
ENGAGED in the cotton trade would endeavor to
borrow fresh capital; while number OF those
engaged in other businesses, would withdraw
from them, and enter into it. Unluckliy, how
ever Il IS next 20 certain that this transerences
of capital would not stop at the point when 1t
would suffice to produce additional supply at
the old prices, but that it would be carried SO
much farther as to produce glut Of co'ons,
and ruinous reyulsion.
variety of causes conspire to produce th:s
effect: The advantages which any one class OF
producers derive from an increased demand
for their peculiar produce, are uniformly exag
perated. as well by that portion OF themselves
who are anxious, in order to improve tneir
credit, to magnify their gains, as by the whoie
BODY Of those who are engaged IN other ouSr
nesses The adventurous and sanguine-tnose
who are particularly disposed to take on're 'S-
notun, pro magmfco-crowd into business
which they readily believe presents the shortest
and safest road to wealth and consideration; al
the same time that many OF that generally hu-
merous class, who have their capitals lent 10
others, and who are waiting until favorable
opportunty occurs for investing them IN some
industrious undertaking, are tempted 10 loiio"
the same course. II occurs TO few, that the
same causes that impel one to enter INTO q ae-
oartmen. that is yielding comparatively hiSh
profits, are most probably impelling thousands.
Confident in his own good fortune, the adVcn-
turer leaves q business 10 WHlCH nc h"u 1871
bred; and with which he was we'll acquainted,
to enter as competitor on new and untried
arena, while those who are already engaged ID
the advanta geous business, stretch their credit
to the utmost, inorter TO acquire the means OF
extending their concerns, and of increasing the
sunnly of the commodity in unusual demand
The result, that every unprejudiced observer
would anticipate, almost invariably takes place.
A disproportionate quantity of capital being at
tracted TO the lucrative business, glut of the
market. and ruinous depression of prices, un-
ayoidably follow
Every merchant must be aware OF the truth
4 Of what we have now stated. And such OF our
readers as will investigate the history oil indus.
try. either in this or any other country, will
find. that a period of peculiar prosperity IN any
one branch, is the uniform harbinger OF mis-
chief. II we turn, for example, to the history
of agriculture, the alienation between the Pc
RODS of high prices and great agricultural pros
peri.y, and Of low prices and great ag:icuitu-
raj Distress is so striking, that 1t cannot IAN 20
arrest The attention Of every one. lhe high