National Republican., 1877-07-21
THE HiRD TIJTE,S.

The causes OF the great financial crash of
1873 are very well understood by all intel
ligent persons, but much pcrplexity exists
rs to the reason of the great prolongatiOn of
the depression in business WI h has now
continued for four years. II has time and
time again been predicted that the revival
was at hand; that the bottom had been
reached, and that thencciOrth there would
be rapid revival Of business. All these
hopeful anticipations have hitherto failed.
These repeated mistakes have been caused
by the fact that people have failed to realize
the extent to which fictitious credits had
been extended. Thus millions upon mil
lions of what was supposed to be wealth as
represented by Rilroad bonds, life insurance
assets and stock in manufacturing and other
companies has proven to be Of little or no
substantial value. As from time to time
the real worth OF these fictitious representa-
tions OF wealth has been discovered, new
business failures and more assignments of
insolvent corporations have taken place.
There can he no return of real prosperity
until all the illusions which are still dclud-
! ing people are swept away.
The process of getting down to the solid
rock of substantial credit is severe, and
brings with it great suffering, but il Is un-
avoidable. st. Louis las recently gone
through with the process of eliminating n
large volume Of fictitious wealth, repre-
sentcd by worthless bank and insurance
assets. As long as no question was made
as to the value Of that property all was
well, but when suspicious arose rs to its
value, and efforts were made TO convert il
into real money, the bubble burst.
1t should be remembered that no real
wealth has been destroyed by any of the
| tnnn.inl which hnya mi
away the fictitious credits which people
have imagined to be wealth, but which, in
fact wanted all its real characteristics. The
lands, the houses, the machinery, the mines
the gold and silver and the other property
which constitute the real wealth Of the
nation, have steadily increased in intrinsi,
value, notwithstanding all the adversite'
which the people have suffered
II is also true that while great volum,
of fictitious wealth has been created by
speculative agencies, an immense quantity
of capital has been absolutely lost by being
invested in railway property which pays nj
dividends, in improbable manufacturing es
tahlshments, and in the thousands Of val
liable buildings which were destroyed by
the great fires in Chicago and Boston. Th'
wealth which has been thus destroyed mus
be taken into account in inquiries as to tn,
causes of the hard times.
The want of confidence is undoubtedly
the great impediment in the way of a restor
alton of business confidence. That conf
dence cannot be restored while many rail
! roads, bank and life insurance companie
and other corporations are still carrying OIL
business upon the basis of assets overesti
mated in value, and which may therefore a
any time he ruined by an exposure of thei
> real condition. All sound corporations, al
solvent firms and business men shou
promptly revalue their assets and accep
depreciation asa permanent fact. Thus, b.
the use of the economy required by tn
changed condition Of the times, busines
confidence may be slowly but surely ri
gained