, 1874-05-18

| Atom V63 por ton IN 1873 to &00 III 1874 Ther1
"aa no panic In 1sng1and hut tho oa,,sos which
produced the extraordinary prices Of 1928
having to groHt o1tont coasod, tito prices foil
bao' towards tlor former standard, wl.i1o In tho
onftod Htatos, whore tllero was no Bpocial ca,lao
Tor tho advance in iron during 1928, tue pricon
would haVe nocoasariy boon reduced in sympn'hy
with tho doolinc in Europe, ovon IL tboto had
boon no pnnio.
Tho condition of tito iron -mcAors, lowcvor, is
but what might havo boou foroscon. Tho OK
traordinary prcos for iron In 1871-2-3 stimulated
production to SUCK an extent tint hundreds Of
now furnaces woro put In blast and IN
inamonso body Of iron yae producod.
all tho furnaces. both those In b1ast and
those suspended, haro now huch Btocks Of iron
OIL hand over from lust yoar that there 10 no
occasion to make my moro for a long tlmo to
como. Tho domand for iron has diminished.
Notwithstanding tho groat reduction In it's prlco,
md this is largo]y due to tho suBpcnBlon OF tho
rail-1nills. Tho manufacture OF rails had also
boon stimulated by tho extraordinary amount of
railway construction Ia thls country, OF Into
ycars tho system Of building railroads has boon
changed: instead Of employing cnpitn1 roads
arc HOW built on credit. Tho plan haa boon to
get donations Of tho right Of way, aud aul,acrip-
lions to tho stock from tho local municipalities;
thon to issue bonds. sell them at 40 to TO conts
on tho dollar, and with tho proceeds build aud
equip the road. This ByHtom of building roads
n3f1a at
construction. Tho agency through wl,ioI,
tho business has boon douo haa gon-
eral1y boen q construction company, Of which we
bo!lovo tlero are aomo flftoen or oightoon CHAR
torod by tho Legislature Of Pennsylvania and
doing business under tho laws of that State.
This Company denls with tho rail-mills. It payu
for tho rails in tho bonds of tho Railroad Com
pany, or the notos Of tho Construction Company,
and doaling entirely on credit, is willing to sub-
nit to my discount On either noten or bonds
Tic rail-mills, BY indorBing this paper, got it
discounted, md thus tho ton or flfteon thousand
mfloa Of rai1way, built entirely on credit, havo
tnado IN extraordinary demand for rails The
amount Of this pnpor credit, however roaohed
such proportions in 1878 that tho whole eyatom
broke down. Tile work Of building railroads on
credit was brought to full stop. Tho e1traordi-
nary demand for rails waB Terminated; the lomand
for pig-iron by tho rail-nail1s ceased, md honce
tho stagnatlon Of tho iron-making trade. But
this WAS not tho whole trouble. Wnon the panic
came. 1t found tho makors Of pig-iron, and tho
ownors Of ral1-mil1s. and the car.buillors. md
tho coal-doalers, holding largo amounts Of tho
paper Of those construction companies, and all
OF 1t went to protest. But little Of it has sinco
boen paid.
THUS tue Iron buainess, Which for few years
enjoyed wonderful prosperity from tho spec
1ulstivo schemes Of railway construction, now
finds itsolf proatrated, with large supply Of
iron on hand, which can only be sold at reduced
pricea, and with large amount Of capital sunk
in tho bonds and pnpor Of tho spectators who
went down in the panic Of 1873.