New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-06-04

II the advice had been followed IN real estate opera
TONS suppose that still greater losses would have re-
suited With some exceptions to be accounted for by
special causes the present time seems to be marked by
the curious phenomenon Of high prices for Walst sec-
rites and low prices for real estate and general mcr
chandise Let us rational explanation of this
state Of affairs
For many years, before the Autumn OF 1873, it was
fashionable take great risks for the chance OF making
large profits The building OF railroads gave employ
ment to large numbers Of men, besides furnishing bonds
for investors who wished TO put surplus earnings in a
permanently safe place Everybody seemed to be grow
ing rich for the money invested found its way through
iron mills and laboring men, back again 20 the investor
through business. Any could get railroad
for circulars freely distributed and advert ements
placed in prominent places 10 show the advantage
ofownng Northern Pacific. fornstance, instead Of Gov
eminent bond the advertiser Offering at the same tne
the former for the latter barring accrued interest
The spirit of speculation made 1t possible TO sell almost
any wel-writen and handsomely engraved security at
a fair reduction from its face value that the interest
upon the amount Of money invested would be worth
the taking. There he doubt that the same speech
lative mania affected all industries, and indeed this is
proved by the rate of interest having ruled very high
sometimes touching one per cent a lay. Inat rail-
road building carried far beyond s proper bounds IS
vancns forever and sooner or later. people do open
their eyes the fact that road cannot pay interest IN
less II gets money from some source or O,her. Ihe
awakening took place IN September 1873, ana the sud
den desire TO turn bad securities INTO cash brought down
suspended, but few, besides those deeply Interested IN
few weeks Wa-st men had grown calm ana were invest
ing in well established securities, which have steadily adj
Vanced since. The panic OF short durauOn, had
little effect upOn the mercantile community ana should
not be- considered "a cause of present dizziness.
The development OF our country is natural process.
and there should be gradual increase OF wealth Or
nary people should be making money. Nevertheless If
railroads built through regions which cannot support
them. builders must lose interest and possibly their
capital also II fOundcres erected 10 manufacture
rails etc. FOR such roads then the CONTEMPORARIES must
suffer when the demand for their product ceases II coal
mines are opened furnish fuel for such fOundcrics
then the miners must lose wealth when the furnaces 20
OF blast If manufactures completed Tor the pr
pose making the neceSsarieS and Inquiries Oh hie Tor
the employed in building roads, in making rails
and in mining COAL then when these persons tail 10 earn
wages their falls 10 some extent upon those who
expected supply their wants Railroad building Is one
trades that OyerOne, and II serves wei 10
show how the extraordinary deVeOpment OF any industry
stimulates u4dne activity in Others ana now the failure
Of a few great industries entails losses that ramlly
through the whole community. How slowly
the reaction from OveI-productiOn has worked
down through all trades Is shown by our
table OF prices Of merchandise giving lower average IN
1879 than 1874. When merchant misses the demand
his goods he does put his prices down ~ once say
20 per but he reasons that the demand must
come. and must make mp for the delay Drop your
pce suddenly and people Will suspect your credit or tc
quality your The advance III stocks and bends
indicates that they paying better interest ana dlN
dend whether earned than the average melran-
tile venture For more than year business men have
sought avoid losses rather than 70 make prons Ine
must better condition. but the Intimate relation at
xsts between all industries and the depression that
charaeterzes all, point 10 the mpossibty OF grand
revival OF trade this year whether the lhneuate future
will witness better times still greater depression ac
cOmpanied by the liquidation OF indebtedness Is "a
nroblem for serious consideration RADIX.
BsO0ktyn May "a, 1879.