Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1876-10-26
VOL. 81, NO.33.
PANICS.
A Valuable Paper Read Before the
Late Convention of Bankers at
Philadelphia.

Mr. Hayes, of Detroit, the Secreta-
ny of the Bank Convention, in his val
liable paper on Panics, called atten-
ton to several points well worthy of
consideration. He said
Is it any wonder that a panic, wide
spread and fearfully disastrous, was
the result of the discovery of the fact
that nearly or quite one thousand
millions of dollars had been swallowed
up. within short period, in building
railroads, many of them having no
real value at all, while others had on
ly a prospective value in the distant
future? This evil did not end with
the railroads. You have to look at
all other interests which were brought
into being or stimulated by this I'M
natural and wholly unwarranted state
of things. Our iron interest was en-
larged and expanded to meet this de-
mand for rails, spikes, engines, cars,
etc., and suddenly knocked down.
Lumber that then paid for manufac-
turing viii bankrupt the manufacturer
now. Car shops are closed, manufac-
turing of nearly all kinds as well as
business is said to be "dull," ''stag-
nation" is apparent, and productions
cannot be sold, because the consumer
is unable to buy. Such is the natural
result of all great panics, without
any regard to the cause that produces
them. But there is a settled princi-
pie that unproductive capital, which
produces no income to its owners,
must reduce those owners to the me-
cessity of living without it; therefore
they must curtail their expenses to
meet the emergency. In many in
stances those supposed TO be rich are
virtually poor, and are compelled to
become producers instead of consum-
ers, while the poorer classes feel the
pinching hand Of poverty upon them,
because of the unproductive condition
of the capital that must furnish en-
ployment. Let us take an inventory
of the unproductive representation of
capital in the United States, taking
only the great losses:
Chicago fire, in 1871 about 175,OO0,000
Boston fire, in 1872, about $4,000, 900
dends 100000, 900
Railroad bonds in default,
about 100000, 900
Vessel property, paying moth
ing, about 6OO,OOO,ooO
Manufacturing establishments,
about 5OO,OOO,0UO
Total about $3,S 5000, 900
This amount of property is just now
dead and buried to its present own
ers. It's proprietors expected fair
interest upon capital. Let ua sup
pose that the above total of unproduc-
tive value is reduced to $4,000, 000,-
600, and six per cent. income placed
upon it would give its owners $780,
100000 year. y = Can we not
in this association of banks and bank
ers discuss the general business OF
the country, and give aid to the en-
ployment of capital in business that
will develop our vast natural resource,
our mines, lands, rivers, lakes and
forests, only so fast as the demand
upon some solid base of permanency
shall warrant, in such a manner as to
make the product of labor available
and productive? The ordinary bust
ness Of country in the hands of pru-
dent, honest, capable men will never
produce panic. On the contrary, it
is to the careful capitalists that we
must look for the increase of capital.
And we should sound the alarm to
give warning of schemes that con.
sumo capital in unproductive and
doubtful enterprises. When great
public calamities like the Chicago and
Boston fires, create sudden and tlc-
titious demand for labor. material and
goods to replace in few months the
accumulations of generations, which
have been swept away, we must look
beyond the preseIG, and watch for the
reaction and ruin which is as sure to
follow as the ebbing and flowing Of
the tide. The banking interests Of
the country can and should through
this association, counsel together up
Oh the soundness of all great CONNER