The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1875-03-02
PANIC LESSONS.
THE BUSINESS OUTLOOK.

THE BUSINESS OUTLOOK.
THE CAUSES OF THE PRESENT DEPRESSION
CoNsIDERED-THE STYLE OF LIVING NOW AS
COMPARED WITH THAT OF 1S60-rHE PRICES
OF PRODUCE C0MPARED-A REVIVAL OF
TRADE PROSPECTS.
Reviews OF the causes which have pro-
6uced the present stagnation in business are
of especial value at the present time, as
they serve ia remind the people of the
country of the particular danger which
must be avoided In any attempt to return to
our former prosperity. These causes, and
the practical application which may be
made of their existence, are
we'll summarized in an editorial in
the Cincinnati Gazette. 1t says
Taking the business of the country as a
whole, it has been, for several years past, un-
profitable. This has not been owing near so
much to a falling off in the volume of trade
or deficiency in those branches which un-
derlie our industries, as to other causes
viz: a high level of expenses and shrInkage
in values. These are the main causes of the
depression, so called, that has prevailed, and
the losses that have been encountered in
trade. In taking prospective view. there
fore, with reference to business, we must
look into the past for, unless the causes of
depression are removed, we can not expect
al Improvement; while on the other hand,
If those causes are out of the way prosperous
times may again be confidently anticipated.
The war, with its initiation of paper money,
elevated the whole business OF the country
to q high level. Profits were large and
easily made. From the extreme de-
preston of 1861 there was q rapid
reaction, and the value of paper
money was Increased, prices of commodities
advanced, wages were increased, and the
AZ Of ui N
doubled. IL really seemed as if the country
was prosperous beyond apTecedent, when, in
fact, it was the reverse. II could not be
otherwise with over million men in the
field engaged in destroying life and prop
erty. The deception resulted from the in
fiAtion of paper currency. Starting with
two hundred millions of paper money,
the volume was rapidly increased until
it reached over one thousand millions. The
greenback being legal tender for debts Of
all kinds whether contracted in the past or
present, ii took the plac9 of gold, but its
value declined in proportion as its volume
increased. The paper dollar was at one
time as low as 40 cents in gold, but still 1t
was called dollar, and in all transactions 1t
was the measure of value. Thus as gold de-
clined prices of commodities advanced and
profits were large and easy. The sudden ac-
emulation of
FIcrICIoUs WEALTH.
led to great liberality in the line of expendi-
lures and extravaganza in the style of liv-
ing, which embraced, and we may add, de-
moralized all classes. This all worked very
well until the topmost round of the ladder
of initiation had been reached. People did
not lay thsir profits aside to be drawn upon
under adverse circumstances. They acted
generally as if we had entered upon new
era which was to have no end.
the cost of living increased two,
three, and four hundred per cent. This
was largely due to the advance in prices Of
commodities, but still more to higher style.
| This will be readily perceived by any one
who will contrast the style of to day with
that OF 1860. The consequences was the
family that lived very comfortably In 1860
on 81 900 year could not make both ends
meet in 1866 on $1,000. It is much easier
to increase expenses than 1t is to cut them
| down. The one Is as easy as rolling of
log. The other Is as hard as rolling
very heavy log. The family Oncs &C
customed to living on FIVE thousand dollars
a year finds it difficult to get along on three
| thousand. Prices may be down, but style
is the trouble. There has been downward
movement, however. Necessity has COM
PEELED reduction, but still in this line a
good deal of the imitation remains. Much
remains to be done in the way of getting
| back to hard pan, so far as living expenses
are concerned. Inindustrial branches there
| ues was even more rapid than the previous
imitation. While the volume of business
was fair, the decline in prices more than
offset profits.
THE APPARENT PROSPERITY
of the period of imitation caused expansion
In buildings and machinery, in railroads, in
mines, and in mercantile Facilities. The
whole business of the country was vastly
overdone. In all respects we advanced
| more in ten years than would have been the
case in twenty years upon gold basis. The
beginning OF contraction, or the end Of in
| fiation, brought everybody face to face
| with this stern reality. The inevitable
result the country has fully experienced.
The shrinkage has been so severe
that it is out of all proportion to the contrac-
ton of the currency. The latter has been
comparatively moderate, while the former
has been sweeping and crushing. This has
/ paralyzed speculation and enterprise. Men
| have been trying to hol1 their own, and
| there has been little disposition to venture
into new fields, or risk anything in uncer-
tainties. This is human nature. IL is diff
cult to rally a whipped army. Men who see
| their wealth shrinking by process at ence
inevitable and uncomfortable, are very
apt to lose their grip, and to fall into
| a state Nrdering on panic. This state
| of things have been aggravated by the finSn-
cial doctors, who have been proposing des-
perate remedies, one side insisting upon
contraction and resumption, and another
upon an expansion OF paper money. The
middle ground, however, was decided upon,