The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-09-01
Capital on "strike''-NO Confidence and No
New Investments.
From the London Times OF August ISL


With consos at ~, with money I'm abundance
amounting to glut, with wheat harvest above
home. we certainly ought to be doing well. There is
no reason at first sight why trade should not he
brisk labor In demand, and work well TemnneIated,
Unfortunately, things are ret exactly so. Trade
does Indeed. as We shall presently observe, show
pleasant symptoms OF revival, but it is still ac
tive and the features OF the money market yet
destre Consols are, IN fact, too high-hat is they
are higher than they would be II there was
more wholesome competition for unemployed
capital. When 1t was argued four five years
ago that the English funds would never again be
above. 70, there was reason, though, as It APP
What was meant by the assertion was that In
the new field OF finance opened up under the
operation OF limited liability Investments Offering six
OF seven per cent would be so plentiful, and practi.
caly SAFE as 10 draw away money FROM securities
yielding only haif that rate OF interest. Even
tous investors would gradually be attracted TO spec
ulations Of such PROMISE and the general decline Of
tie demand for the public stocks of the Kingdom
would lower Their value from the recorded average
Of 92li TO 30 at the outside. We repeat, there was
reason In these views, but the conclusion upset
by the extravaganza TO which the new system
carried. Tie investments OF 1865 did but confirm
the Old adage and show that "good interest means
bal security the experience OF 1866 alarmed peo-
pie beyond an measure, ana the result is that IN
1865 money, Instead or being applied 10 The iegitt-
mate Development or our Industrial resources. IL
either yv,dg,,gv poured into consots or Kept une-
yioved ia immense amounts uU confidence and oI-
porta'atties nag at length return or this happy con-
trade reports which appeared In our last impression
The prospect, as 1t appears to us, is none
rately bright In weather prognostics II Is always
held that the more gradual the rise the more perma
nent Will be the effects, and the same rule may hold
good In the vicssitudes and fluctuations Of trade
The truth Is the effects OF the last panic have been
may be assumed, beyond the magnitude OF the
cause II must he remembered that the pressure
was felt long after the crisis The collapse Of one
Immediate loss of capital, but by succession Of
calls for further contributions Limited liability as
actually employed, had proved snare, for though
the responsibility OF shareholder was indeed
''limited" the bounds were still wide enough
10 admit OF ruin Unconscious investors imagined
that their liabilities were limited to the sums they
had paid down, without thinking that they still
answ erabe to the full amount OF their shares The
actual embarrassments thus produced and proracted
conspired with the public alarm 10 generate dis
trust which has appeared almost nterminabe, 50
that not only in this country but In France likewise,
enormous sums or money have been allowed TO lie
Idle IN the banks while trade and industry have Ian
guished for want OF aliment and supplies.
Nothing could show more forcbly me uDofdty ~
capital The argument that capital, after ALL rs as
much In need OF employment a. labor has been found
ol no practical weight true, the owners OF money
who wiz not employ II get nothing for Il; but 70 ths
for time they are content 20 submit, and for q
longer time, indeed, than could nave been mag.
ined. In fact the state OF lhings was fairly de.
sCTibcd 10y the assertion that capital in It's turn
was 'op striEe.m II has cen ON strike" for these
two years, and though capitalists have suffered IKE
MI other strikers 1t rs but now that they have made
any sign OF coming IN. The problem before us is Of
incaiculable Importance n II could but be thought
out and solved. rae capital means unemployed
iabor ana stdgjtd1a trade, and ,chdt these mean ia
their effects UpOp the pubiiC iceif1re zoe need not
sag. IL would be far better for the country that
money should be dear than that II should be cheap
IN the sense In which " Ia cheap now. In reality.
n1twiths landing It's quoted value IL stil 20 dear
Us not to be had by ordinary dealers M any price
Whatever. That very limited class Of dealers whose
proposals satisfy the expectations o the frightened
captalst MY have what they want at a nominal
price: but TO the great body OF dealers the market
h altogether Closed What IL wanted now " such
a ',leinand for money! as will Draw ont the
funpiy. A demand for money implies that there
H. promising employment for it--in other words,
tlaf there will be employment for labor too. We
trust we may az length be reaching this condition
1htee years ago We went 100 last ana 700 lar
Aopev wa e,t purely on the promise OF Interest
aud Without Sufficient care for security Such terms
Ofcose created an affinity OF speculation and gave
Tor \ zine an incredible impetus 10 trade. Then
came the inevitable catastrophe and after II such an
enduring terror as was never before known. Let US
ho,'c that Tie quiet and gradua Drightenlng Of I'M