, 1877-10-31

THE LAW OF PANlcs.
Tho New York Nation, III Its fass issue, has
m article upon the "Law Of Panics," In
! which, tho writer treax the general subject
of ponies both interestingly md ably,
but without discovering any wel-tleanod
Inn. He locates tho cpochs OF pnnfcs In tlif-
fcrcnt countries, hu1s CAUSE for tham In
oycrproluction mud exchange, md recognizes
| the signs OF recovery in tho returns Of tho
Clearing-Honses OH the ono hand, aud I" n
sharp demand for money indicated by high
rate Of interest and plentiful isaue OF bills
for discount on tho other, but ho gots no
,,enrer to Inv than this. II ho lind traced
Ills cause q little deeper, ho might havo bit
upon the conditions Of panio which In
themselves suggest sufficient law by obetli-
onco to which pnnics could 10 avertet1.
Tho primary and most direct condition Of
nit panics Is tho inorlinato disposition OF
Americans and Englishnon to get into dobt
They borrow money right and left. Thoy
| do their business upon borrowed capital.
They buy deeply on credit. Making
individual application of tho old say-
lug, that national debt is a national bless
! ing. they raah into 1t haal over earn. They
buy property upon which they pay only
s.na!l margin. They take risks upon the
most slender baais. Thoy speculate upon
hope, not upon actual values They havo
little cash III their pockets, but plenty OF pa
per everywhere. Not hnving much at risk,
they argue II they win they will mako for
tuno; it they lose, 1t will only bo little antl
will not hurt. So thoy tako chnuccs on
everything, from moonshino to matters OF
solid valus. Tho tendency to bet and gam.
bio upon margins mud to koop In debt
| oaso as whisky drinking, with the popularity
that 1t IL confined 10 tho Saxon racos,-
America, England, aul Germany. Tl.e
Latins, tho eighty million pooplo OF Franco,
1taly. Belgium, Switzerland, mud Wa nlay
include IloIlanl, do 10. tako risks cx-
cept in snlat1 degree, consequently have
no ranfcs. They aro cautious, afraid OF debt,
| md do not speculate recklossly on future
chaucca. Americans aud Eng!ishmon nro
natural born spesliators. They ars reckless
Of consequences and daring by tloliborntion.
The Frouchmau is naturally iu,W,laiyo ia
everything except moaoy natterB; tho Saxon
allows Ills curidity to ovorreach hts iudg-
lnent. Tho Lutin people, no. rnnntng into
tiebt, aro mot liablo TO panics. They live, M
it were, In are.proof houses, whilo tho
Saxons, always In debt, ara in wooden
| houses, linblo to catch from a spark, and
10 swept away past redemption. There
have been hundreds Of special reasons offos-
cd to account for our pantcs, hut people are ol-
ways averae to Offering tho real reason or to
resolve to avoid tho causes which will cor
tainiy lead to repetition OF panic. THIS
a4ltls to tho despair Of tho sltuation, for whom
ouco safely through pauio we aro suxious
to rcnov tho crcltnstancos whicl, iod to 1t.
Ws are dissatisAed that thingd do not change
fastor for speculative opportunities. ,No Gro
not content, even aftov having learned tho
law Of q panic anil tho destruction Of values,
| to go slowly mud accumulate property by
| gradual mud natural accrotiou aud tho prau-
tico Of economy, but VIC must got 1t by q
sudden jump, somo brilliant coup, or mag
ni0cent cor,tor.
The mania for getting into excessive debt
ID OTTO branch Of tho Inv Of p1nics, but
not i'll. When tho panic is over and We
havs had q l,or;od OF rest aud restoration,
aud property begins to approximate Its
| normal values, thon we cou,menco to pave
tho way for another. Now We begin
to long for tho speculative orr agaln.
When It arrives and prosperity returns, wn
| commence to speculate ~ rocl;lessly as ever.
We buy for rise Oh too narrow margin Of
capltal. Tho manufacturer increases Lis
production for market yos to come, In