Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1868-12-16
WHOLE NO. 1924
CAPITAL GONE TO M0RK.


"CapitaI on a strike" was the cap
ton of an article we had occasion TO
write some months ago. At that time,
money amOngthe people-in the cOun-
try especialIy Iy-was scarce; but at all
the commercial eenters it was supera-
bundant. This was not attributable
to our paper money system. The fea-
ture to which we refer was even more
prominent in England, where the
currency is on a specie basis, than in
this country, where paper IS the basis.
In London, money was abundant at l
| to 8 per cent. per annum, because busi-
ness was stagnant and people were
avoiding rather than seeking new en-
I engagements. In New York, at the
same time and as late even asSeptenl-
/ Der, money was loaned at 3 and per
cent, and borrowers were not found
/ to any extent, except on the Stock
Exchange. In Cincinnati it was also
plenty. with loans as low as 4 per cent.
and from that up to per cent, with
| lenders looking anXiously for reliable
men to borrow. At that time the
crops of 1857 had been moved, and
there was but little in the hands Of
producers to sell. The crops, too, had
been light. For three years the har-
vest had failed, and general stagna-
ton was the consequence. This drove
money into the commercial eenters,
where its chief function, for the time
was connected with speculativeO opera
tiOns in fancy securities, which added
about as much to the wealth of the
country as the two Yankees acquired
by trading jaek-knives-
But how is it now? We have had
good crops. In the aggregate thepro-
ducts of the soil were above an aver
age. This has given employment to
money. Capital has gone TO work
1t is scarce in New York; Scarce in
Cincinnati, and scarce at all the COM
mercial centers. This scarcity has
not been caused by any reduction in
the supply. The volume of currency
is as large now as it was last summer.
The conclusion, therefor, is that money
is swinging the circle of trade. It IS
performing its legitimate functions
1t is moving the crops, and having
made this move, it will pay debts and
in due time return to the starting
points.
The scarcity of money, therefore, is
a good sign. When the rate of inter-
est is high on Third street in conse-
quence of a scarcity of money, il
means business. The ebbing of the
tide of money is now being experien-
eed. The return flow will soon be OBJ
served. Money has not gone into the
interior to stay. 1t never does stay
there very long. With its return mer-
chants will have old credits balanced,
4 4, III inc
will then give place to cheerfulness.
There has, undoubtedly, been over
trading. The shrinkage of values has
had its effect. The change from ex-
travagance to economy has interfered
with many calculations. Notions Of
profits have been contracted, and peo-
pie enter cautiously upon new engage
ments; but the business Of this cOun-
try has never gone down on good crops.
Our financial and commercial reyul-
siOns have been caused by undue ex-
pansion, followed by crop failures
We have had the expansion and the
crop failures. We have had also the
contraction of business, and the sec
Ond remedy for commercial depres-
sion-good crops-is in hand. 1t is
true prices of most article of produce
are comparatively low; but even at
these prices the aggregate value OF
produce in the country is far greater
than in any one of the last three years.
At the same time the cost of living is
reduced. TO the consumer it does not
come near so hard to pay s. for flour
rs it did to pay S14. This will bring
down the price of manufactures, and
then the farmer, ifhe has to sell chap
er, will also buy cheaper.
To hear some people talk il might
be supposed that good crops were real
" a calamity. Three million bales Of
cotton, for example, means lower
prices than whe the crop was two mila
lion; but it also means lower prices
for cotton goods. We can not see,
therefore, where the calamity comes
in. An increase of fifty per cent. in
the corn crop means lower prices for
corn, but this hurts nobody, and bene-
fits everybody. If it were not so,
here is no cause for thankfulneSs for
good harvests, but the reverse.
The fact is, if the harvests of 1868
lad failed as did the harvests of the
preceding three years. capital would
till be on a strike. There would bs
N abundance of money at the eom=
nercial eenters, with no legitimate
for it. This is what the
,OOd crops have prevented, and it is
hus that business is being put upon
IS feet again. Cincinnati Gazette.