New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-25

soil again NJ prOHt Or IOI conoump'iou' III
| panic there are few persons who are suf-
ficiently sanguine to buy with view of max
ing profit by the turn of the market There
is also great economy in the consumption OF
all articles, including even absolute necessities.
8. The supply of money available for purchases
is greatly diminished in times of distrust. All
individuals and corporations having payments
to make, hasten to make the best provision they
can TO save themselves from insolvency They
are not sure that the sums which In the 0rdl-
nary course of business would be paid to them
will be forthcoming, and they struggle to pro-
vide against the worst that can happen. Men
with few debts and an abundance of cash
refuse to lend, desiring to avail themselves at
the time which may seem to them most suita-
BILE of the chance of buying at panic prices.
Hence, in popular phrase, great deal OF
money is boarded. Ii we could suppose such
q thing as the complete destruction of mercan-
tile credit and an entire extinction OF contl-
dence between man and man, two or three
times the present volume of currency would
be insufficient to do the business or this country
at existing prices.
4. The same causes which we have just
noticed as operating to restrict the supply of
money are also eftectual in increasing the de-
mand for it, All debtors are pressed for
payment, though Of course there is in many
cases sufficient humanity and common sense
in creditors not to insist on impossibilities.
Extensions are usually granted where little
or nothing could be realized by resorting to
extreme measures.
For some time all these terrible forces re
main in operation, and the necessary cOnse-
quence is that lower range of prices is
established. Everything ibecomes cheaper.
Stocks fall and wages go down. But, sooner
or later, and sooner in some things than III
Others. the tide is reversed Then we have
something like the following phenomena
1. The stock of commodities having been
reduced by consumption. which necessarily
goes on, and by the purchases which have
been made by reason of the lower prices, and
securities having been taken out of the stock
market BY investors, or shipped out of the
country, supply is diminished. Labor, indeed,
does not recover immediately, since the sup
ply of it cannot speedily be curtailed.
9. The demand for commodities, if not abso-
lutely increased, is necessarily greater in pro-
portion to the diminished supply.
8. The return of confidence gradually en-
ables business to be transacted by those
economists of money, checks, bills of ex-
change, and book accounts, somewhat as for
merry, thus releasing a vast amount OF money
which in the panic was most wastefully en-
ployed. The boards are also dispersed.
a. Prices being lower, business restricted
and applications Of capital to unremunerative
purposes checked the demand for money is
greatly restricted Hence money rapidly accu-
mulates in banks waiting Cor employment
True it is that confidence is not as complete
as it formerly was, that prices do not reach
the old level, that wages recover very slowly,
that consumption continues on a restricted
scale, that many promising enterprises never
revive, and that hundreds of the more adj
yenturous spectators do not succeed Ill get
ting on their feet again. For these reasons 1t
almost invariably happens that for two or
three years after great panic the supply of
money is more than adequate TO the wants
Of the community and the rate OF interest
falls Should there be no relapse it may
confidently be expected that the COM
ing year will open with an abund-
ance Of unemployed cash in all the money
centers Of the United States. That supertiuity
of money may be speedily employed III work.
ing ZIP the prices Of stocks and bonds to the
figures of three months ago, or it may he re-
served for useful and necessary enterprises
Congress may take advantage of favorable
contingency for tho restoration of the cur
rcncy to the gold standard or by imitation
the train may be laid for a future and more
devastating explosion. In short, the choice of
Hercules will be offered to the people of this
country, and momentous are the consequences
which rest on their decision.