The Portland daily press., 1878-09-07
HARD TINES.
Their Cause and Cure Discussed.
Speech of Hon. GaIusha A. Grew
at FreepOrt.

House of Representatives, spoke at Freepor.
last night to a good audience on the currency
question. and the cause and cure of hard times.
His discussion of the currency was very able
and elaborate. We should be glad to publish
the whole speech if it were possible, but as i.
is not we shall confne our report to that branch
Of the speech relating directly to the cause OF
the hard times because this is a topic that has
been less considered than the currency question
proper. He said:
In the multiplicity of discussion as 10 the
volume of money necessary for trade, and as
to Its effect in producing the depression 10
business commencing in 1873, the substantial
facts and producing causes seem to be smos,
wholly overlooked. What were the real causes
of the crash, as it is called, of 1873 which to
SO great an extent Frustrated all branches Of
industry, and in it's effects filled the land with
unemployed labor?
Its real cause could not have been the 1xioe
of definite time for the resu CO ption of Specie
payments, for that was not done uutil 1875
two years after the crash. Nor could its re a
cause have been a lack of Sufficient circul stin g
medium tcalled money! for thu 70 ume of tia,
was greater in 1894 thar at any former period
excluding the interest-bearing notes issued BY
the Government for one or two years.
In 1862, the paper circulation (neary all State
bank) was two hundred and thirty eight mill
ions, six hundred and seveuty-oue Thousand
two hundred and eighteen t23S ,671 ,2l8) dollars
Adding the gold and silver coiu in the country
at that time, estimated at 500 600 900, wond
make the entire circulating medium for the
whole country in 1862, in round plumbers
$40, 000,0 900.
The entire circulation In 1870 was in rouud
numbers $685., 1000 600; in 1873, S746, COO, 600,
and in 1874 it was $75S. 100000 How then. is
it possible that the crash of 1873 could have
been produced by a lack of sufficient circulat-
ing medium, when there was S6i, 600, 600 more
in 1873 than in 1870, and S12 900 more in
1874 than in 1873 and 10 either year more than
twice as much as in 1862
II neither the fixing of definite time to re.
sumo, nor lack of circulating medium caused
the crash and consequent stagnaion in bust
ness, then to what was that result really dus:
1t came by reason of the suspension in the
building of railroads, and because production
in every branch of industry, except agriculture,
had reached point beyond the capacity of thu
people to consume--or, in the language OF some
casuists, because of MISREPRESENTATION. But
even if that were So what caused the UNDER
consumption? The ability to buy, aud the
ability or capacity to consume, are two dis
tinct things. The ability to buy depends upon
the general prosperity-upon Betive, COP
slant demand and ready pay for labor in ali
trolled by that. But the ability or capacity &c
consume has its limits, beyond which it is i'm
possible to go, no matter what may be the
ability to buy. An individual cannot consume,
gwen III WdbtHlui tAhTdVhRduCt, UeyOHt n Ger.
tain limit. In 1873, as people, we had
reached that point. For the ability to buy 81
that time was as great as at any former period,
yet there was q larger uDsold surplus of all
commodities than ever before
The ability to buy after 1873 was, il is true,
greatly lessened. And why? During the
three years preceding 1873. 10 1893 miles of rail-
road were built in the United States, and for
the three years succeeding, G, 720, miles being a
difference of 12,678 miles for these three years.
Tho a%aot nharN IF hr1i1
year from the commencement of railroad build.
ing was 1868 miles in 1871, which was reduced
to 1,75S miles in 1875. What was the effect OF
this great reduction upon labor and all bust
ness interests?
On railroads passing over country of reas.
onably uniform and level surface, there are, on
an average about 10000 cubic yards of earth
work to the mile. Over broken and greatly
uneven surfaces it would exceed that. But
call it $4,000 yards to The mile and ten yards
for days work. Then each mile of railroad
would require 5000 days work for exeavating
the cuts and making the banks for the fills
that is, for the earth-work, as it is called, not
counting the rock-work, masonry, piling,
trestle. work and bridge.buildiDg. These with
the engineering and ties, would require as many
more dayss work to the mile, so that not less
than 5000 days work would be required on an
average to each mile of railroad to prepare 1t for
laying the track, and this would not include the
labor necessary for furnishing the rolling
stock and equipment and for operating the
road.
AT 5000 days work 10 the mile, the building
OF railroads in the United States for the three
years succeeding 1873 required 6068 600 days
work less than for the three preceding years,
which would be an annual decrea. g of %, $50 :
600 days. work. In the labor required for the
production OF iron and anthracite coal. there
was like decrease In 1873 the production
of rolled iron alone (by the returns of the
Steel and Iron Associaton) was 1866 445 tons.
and in 1874 it was ,839, $50 tons, briig i26,S85
tons less in 1874 than in 1873.
1t is estimated that on an average 1t takes
live days work to produce q too of irou, TO-
Guiding the mining and smelling of the IRE
Calling it five days to the ton, it required 634-
425 days work less 10 1874 than in 1873 for the
production of rolled iron.
In the production of anthracite coal II is esti-
mated that from three to five days work are
necessary to produce ton of coal and dis
tribute to the consumer; call the average four
days work to the ton. The production of
anthracite coal in 1873 was 81 $3.50, 959 IONS, and
in 1874 was 1896, 1856 tons: beng s8I 49,
tons less in 1874 than in 1873, which would
require Z, 539, $40 days work LEES than 10 1873.
In railroad building, to prepare the roads tor
laying the track, in tue production of rolled
iron and anthracite coal it repaired in these
three branches of industry sl,ae 80 $40 905
days work less in 1874 than 10 1873 Aud this
does not include the labor necessary for fur
nishing lumber, food and CiCthirg ard all
necessary supplies for the laborers who might
perform this specified work. The stoppage 10
railroad building-or the comparative stoppage
lin 1874-'75, in addition to leaving uneu pillow ed
the labor that had been engyg, d IN the prpced-
ing years, put stop for the time icing TO the
great demand for iron, and with it the d. maud
for coal. Hence came the uecessity for III,
reduction in the force, as well az price of labor,
in all thEee OF these great Branches of industry
extending their Influence over every other.
CAUSE OF THE DECLINE IN RAILROAD BUILDING
But why should ralroad building have
stopped at that time? Certainly lot because
ofiany scarcity OF money, for at that very time
and ever since there was and has been more
idle money to be loaned, at e-s rate OF interest
than ever before.
1t stopped from sheer exhaustion 10 that lice
OF Investment; fastened som. what, p.rhaes,
by spirit of unfriepdiy l.eisi.t,on which
spread over the country, tendiug 10 the esti-
mation OF capital, to cripple aud greatly en-
barrass, If not to make worth lsss, that kipd Of
investment.
For four years-1S65 Tel SO o. the wa,) to
1868 inclusve-there were blu 1t s 81 miles OF
railroad. which incluo-d ieNy all of The
Pacific roads and Their br.pct-s The nv,
four years-1S69 to 1872 inclns,v. "a OlS m l~s
were built. In 1873 there were 20 3l0 No: lgs If
railroad in the United States, W aieh had cost
almost $4,000, 000, 900, more than pa'f OF walcb
returns nothing to the investors. Our railroads
system had then been extended TIL there was,
On an average, one mile OF railroad 10 every
5Io persons OF the population. All experience
IN railroading, wherever the experiment has
peen Tried, proves that for rsilrJsd TO pay
anything there must be- on an average to the
mile, not fewer than 800 persons tributary to
the business of the road. 10 E gland the
average per mile is 1.9l6; in FraLce, 2,940; and
yet few of their railroads pay anything.
In every branch of mechanical ara 1napr-
featuring industry, production up TO 1875 had
been stimulated beyond the cspacits OF tb.
people to consume. War; consumption and
war destruction gave the first impulss 70 Ell
larged production, increasing the demand ana
enhancing the price, An expanded currency
OF irredeemable paper made necessary bg the
war; stimulated spirit of wild adventure q,
an unparalleled extravaganza in the mode of
living. La addition, an unprecedented creation
OF Indebtedness crippled all public and private
enterprises.
The municipal indebtedness of the coun try
IN 1875 was over thousand millions of dollars
more than holt Of rpb;oh .rn.