The Manitowoc tribune. [volume] (Manitowoc, Wis.) 1866-1878, 1878-02-21
THE B BUSINESS DEPRESSION.

| one that furnishes an important indica-
| ton as to the steps necessary to restore
| prosperity or at least safety, to the bus
| mess OF the country-that of long cred
| its. The present condition of business
may not seem favorable for an approach
| towards short credits, but before bust
ness can revive greatly it will be neces-
| sary to offer less inducement In the way
| of long credit to purchasers. When the
panic struck, commercial transactions
were based on thirty and sixty days
time, rarely over that, and to this was
largely due the fact that the period Of
| greatest currency initiation was not i'm
mediately followed by general bank
ruptcy. Under ordinary circumstances
q condition of safety would have been
| reached, after the panic, before this
time, but for this tendency to specula-
ton caused by an inflated currency. If
| the signs of the times had been accur-
| rately read, such inducements to pur-
| chasers as were liable to bankrupt both
| buyer and seller, would have been
avoided.
A general effort was made, after the
collapse, to keep bushes up to the
standard it had reached during the time
of the inflated values. The large houses
with immense stocks on hand could not,
or would not if they could, settle down
to the inevitable small business that
must exist during the depression Incl
dent to dropping down of values.
Hence extraordinary inducements were
offered to smaller dealers. Not only
were prices lowered, but the time of
payment was extended from thirty to
ninety days, to six months and even a
year in the competition for large sales.
| Small dealers, though offered goods at
low figures and long time, would still
have held off, owing to the doubt as to
the profitable retail trade, but in addi-
ton were offered a refuge in case of fail
ure, in the bankruptcy courts. Having
been demoralized by the wild specula-
| ton of war times, it was impossible to
resist the temptation to buy largely.
| If dealer should succeed, it was an
immense success; if he should fail, a
jaunt through bankruptcy would leave
him without utter humiliation.
The result was that small dealers
| failed to meet their obligations and in
turn the large dealers suffered. With
collapse imminent, the same policy was
| continued with greater vigor on all sides
and a trade founded On natural laws
postponed. Failures still continue and
extension of time is still marked fea-
| ture of business. 1t is pretty certain
that safety cannot be reached until bus
| mess Is contracted to its legitimate
measure. When this is done, though as
it may seem to be, healthy expansion,
based on the laws of trade, will begin.
There is nothing surprising and nothing
discouraging in the failures that are
daily recorded; they are only indications
of a disease which was acquired long
ago and are not symptoms of newly
developed disorder. The disease re-
quires heroic treatment and the sooner
it receives it the sooner it will succumb.
Such treatment may precipitate failures
but will induce none that will not come
in any event. The country needs to
take an account of the stock and this
cannot be done in the uncertainty which
attaches to the long credit system.
1t may be qestioned if the theory of
over-production as usually applied, is
altogether sound. Almost any produc-
ton is over production in the uncertain
ty following total destruction of infat-
ed values, but it is probable that but
for the frantic efforts of dealers to I'M
load on any terms, the country would
now be demanding the full capacity of
productive enterprises. Over-produc-
ton did not cause the panic and the
temporary excess of supply was occas-
Toned by the speculative character of
commercial transactions. Uncertainty
occasions caution on the part of consum-
ers and a general reduction of demand;
if it had produced like caution on the
part of dealers, confidence would have
been restored and by this time, it is
in the highest degree probable, the
country would have passed its per-
iod of inevitable depression and have
been reasonably prosperous and active.
Dealers, however, have endeavored to
avoid the inevitable by striving to re-
store the condition of unnatural pros
perity that obtained during and after
the war.
1t seems better to look the situation
directly in the face, and when this is
done, half the remedy is applied. An
immediate restoration of short credits is
not urged, but gradual approach to
that condition. And whether this is
done or not, the present tendency to
extend credits should be fought. The
experience of the past four years ought
to show the Incompetence of the present
method to relieve the business of the
country. The people are waiting for
something to happen that will give
relief-and in the meantime are trying
manfully but injudiciously to brace up
broken bridge. The student of no.
htical economy will not believe that
prosperity will be achieved as readily
by working on an improper basis 90 hu