The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1875-08-18
Ght4ntelIiqetreer,
Trnding without CapiIaI.


FINN the Chicago Tribune
The London Tine, in 4 recent article
on the failures in England, pointed ou
the great change which has taken place
Of late years in the conduct Of business
That paper saysthat, In modern business
the men who use capital tOr the carrying
forward Of the major operations OF com
mercc and trade are not the owners Of
that capital. Our merchants, manufac'
mrers, and captains Of industry do moi
trade ON their own money The active
men on Change have little capital. II
these leaders in thcgrcat army OF modern
industry were condemned 10 use no funds
but their own for one day the transac-
tions Of that day would shrink into very
moderate proportions indeed
This is more strikingly true in this
country than in England. The whole
basis upon which business was once trans
acted i. reversed. Capital was formerly
the basis Of credit, the credit being pro-
porlionately smaller than the capital;
now the pyramid il reversed; upon COM
paraliyely small capital is erected u
large supcrstructurc Of credit, The
men who have capital have been forced
out Of business By the more active men
who do business on hired capital. Theman
who does business on his own capital
cannot compete with the man who has
such credit that he can obtain all the
money he needs to Use iucxpanded trade.
The man who can sell his notes or bills,
or have them discounted, can carry on Il
more active trade than the man who
trades merely on his own capital. Hence
the holders Of capital have become dis
tinct class from those who carry on the
commerce Of the world. Capitalists, there
fore, as class, are no longer engaged di-
reGtly in commerce. They hire their cap
ital 10 those who have no capital, that the
latter may manufacture, and trade, pro-
ducc, sell, and exchange. This is bccom-
ing the rule in this country, During the
last ten years We have constructed many
Thousands Of miles Of railway in the
United States, and nothing has been more
striking than the complete separation OF
the capital and the labor. The compan-
les or individuals who have built these
railways had no capital; they had M
money Of their own; they went into
the market with their notes or bonds,
selling these to the capitalists at what.
ever the latter were willing to give
for them. A double consequence Of
this was that the cost OF the rail.
roads, represented by the amount Of the
bonds sold, was so far in excess Of the
real value Of the property produced, that
the latter has been unable 10 compensate
or repay the capitalists for their invest
ments. SD in all other branches Of in
dustry. The ialsity OF obtaining other
mems money with which to engage in all
manner Of enterprises leads to reckless
ventures, which would be unlikely II the
operators were using their own means.
It leads to ovcrproduCtion, with the
subsequent stagnation and loss. II slimu.
latcs an activity any enterprise which,
in fact, are speculation. II excludes care,
prudence, and soldity. II leads To that
inconsidcratc activity aud vcnturcs0me-
ness which in private matters would be
Rtylcd reckless extravaganza. II weakens
the moral restraints, which are rs essen
tial in commerce as IN all the other
transactions oi life. 4 man dealing on
his own capital, and the man dealing on
the capital Ul an other, have different mo-
tions Of doing business. The one whose debt
never exceed his available means to pay
may do a smaller business, but he isin no
danger oi failure or bankruptcy, no matter
how violent the commissions NJ the mar.
ket. BIT the man whose capital il in the
willingness or the ability Of the banks to
lend him money to meet his debts NJ they
fall luc,--whO has no capital save his
rrcdit,-is sure, in ease II any serious
disturbance Of the market, to lie brought
to standslill suddenly; he fails, anil li5
failure carries down others, and with
them the bank, and thus there is an ever
present possibility Of u panic, and the
possibility il remote or proXimate As the
business Of the country is done by men
without capital on borrowed money, and
not by those who own the capital on which
they do business. The failures in England
since last March. which in the aggregate
have been very large, hayeall bccnOi men
and companies doing business on rented
capital, NOT merely credit based On cap.
ital. but almost exclusively upon credit
at the banks or the brokeg offices. The
failures were not general, because the
credit was not generally Oyer.extcnded.
But the like cause ia certain to produce
like effects everywhere, and paniCs are
certain exactly in the proportion that
business il done by men who have no
capital Of their own, and hire that Of
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