, 1875-06-23
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THE PANIC IN ENnT.&Nn-

Tho Chicago organ Of ahinplaster expan-
sion, high-tariff taxation, and tho corrupt
rings, partly misundorstands and pnrtly mis-
represents Tna ThmuNEs explanation Of the
Engltgh panic. It follows the accepted def
milton TINT " Whatever gives profit Ia capl.
tai" and then proceeds Ia say:
IN word. THx Tn,nuNa maintains that thu com.
msrcial community Of England have accumulated as
largo surplus Of rent and interest paying capltA
thas they are nnnhla to pay their dshtst To charao
tarite is explanation Of the prceent panic in En-.
gland AZ nonFenss, IN to usa 4 very mild term. W
have bcen told that TIC why To aTod pAncs IL 10 main
tim specis baais currency; to deal only In houesi
nonsy-gold. But England has pursued prec1sely
this eot,Zse anco the closs Of ths EApolconie wars
And Jet England has been repeatedly conyulsed by
panies, and IN now suffering from panic which
hreatens 10 b. widespread and foasfully disastrous
ws have tccn told BY thu frce-rate buionitts tia,
cur pancs ore causcd BY currency iaaauon protection
aud Lack Of "capita1 = and now no aco England
rent by panic, notwithstanding England haa free
tr4de, II free from currcncy tu1aou, and possesses
ausIlus Of capital"
Now, accepting tho above definition Of
capital, 1t loses it's character when It is no
longer invested 1eproductiyely, or when It
ceases to bring rent. Tho desire to keen
cnpitN In nctiye motor, when 1t had accurnu.
lated in an oxcess above all legitimate do
mands, is precisely what causcd tho recent
disturbance in English financial circles, In
other words, it was m excess or limitation
Of capital, is, m expansion beyond tho
limits whero 1t could bo made reproductive Mt
home, or to bring rent abroad, with reason.
ablo assurance Of preserving the principal,
We will outline tho argument NO used before,
Tho British nation has been produc-
ing 100,0o0,ooo pounds startling ($5o0,.
ooo,o ,ooW per aunum oyor and above its
home demands. It fonnd m outlet
abroad, and was loaned for invest.
ment to foreign Governments, State
and locd; 10 railroad and mining
corporations; to companies for public I'm.
provomenta and premature developments to
everybody and everything that promised o
roturn OF tho principal. Then ca1ns rcpudia.
ton in various quarters, Governments and
corporations suspended payments. Railroad
building and public improvements were
brought to o atand-still. Not only did the de.
mand fall of, but there was no longer any
reasonable prospect Of getting back the prin-
cipal In loans Of this character, It was then
that English capital began to accumulate in
tho vaults, where it lost It's character "a
capital and became non-productive. At
this time thero was an abnormal and
unhea1thfm demand at homo. Many Of
the manufacturers had extended their
business beyond their own resources, stimu.
latod thereto by the demand incident to tbs
railroad extensions, public improvements, and
Premature developments wo haye already
noted. They were crippled ~ by tho long
strikes at home, and ~ by sudden suspen-
aion ot the demand from abroad. The Ameei-
can panic OF 1873 bors heavily upon them
among other things. They then bocame
heavy borrowers, not to meet growing bua;-
mesa, but to carry loasea already sustained aud
increasing They got tho idle money upon
securities which would not hayo satisfied tho
English capitalists few years before, but be-
cause the capital was idle, and It's owners
were ready 10 loan It even to hard-up
manufacturers aud reckless spsculatora
There had to be a day Of sottlo-
mont to strike the balanco and wipe
out the lossoa. This WAS tho story Of "in-
lation Of capital " and ita conaaonanoss :,
the Chicago organ of ahinn)aa.er o1nona7on
hioh.tariT tarnt;on and tha coxrr,,,t ", 49,
cannot understand II. Il ia hec.rse tho a1
p,anation ooaa a litt1s deonar tban th.t o-e.n
ia scoustomot, n narctrate @"''
But the oonc1ua;on ~ ths J.~ coovr ND
q. F. A11xx novananer rolat,va ~ ~ Inn 49,
don manic ID na falss aa tta jact =, NV com1sa 49,.
honsion il stnnid AInndon nan1e. w,th ;ta
,unfattored commcroo and aolid ourranov ia
mt tts ssn,s sort of th;no az Az A,oar;,.n
panic, which comes from The jotnt influence
Of a i;oh tariff and tha ernansion ~ 10
money. 4 pan,o In Enalsnd il . tam.
porarv anspenaIon for I. osneral .ot.1am.n,
OF q comparauyek few persous and a,a,., IN
which 3 portion Of abs sl.o.+4,ous surplus cap
i.~' ..."ise,y ,hvested because II il = surplus,
Is wiped out but there Is no general pros.
tratson Of commerce, no general suspension
OF business, no general suspension Of produo-
tion, nothing akin tothe universal btagnation,
want U1nom s11f5Arinu md miear,, In ri3o,t
to an American panic which follow, An ~.
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