Keowee courier. [volume] (Pickens Court House, S.C.) 1849-current, 1878-02-21
THE HARD TIMES ABROAD.

Tho general depression Of busincs through
out tho world is just now occupying largo
share of the attention of economic writer's
in Europe. The question of the crisis was
recently discussed nt q meeting of tho
French economists; and pamphlet recently
issued by George Lavclye, Que of the fore.
most economic writer's Of Belgium, entitled,
"Du Caraotero do la Crisc e ,op omque Ac-
tucllc," has attractedi"" i""mnch attention on
the Continent. Discussing this pamphlet,
the Vienna Ncuc Frcic Press says:
For somo years, the civilized world has
suffered from crisis, which, in intensity
and duration, is without precedent. Tho
wheels of industrial activity have become
immovablc. Speculation has never before
been contracted to such narrow bounds
Confidence has disappeared and though
symptoms have appeared, which formerly
would bc regarded as unmistakablo signs
of a change, such as cheap money and low
prices, yet the attentive observer can sec no
tokens of decided Improvement, or reco
very of tho economical organism. The
question Which men arc now asking is,
whether these conditions arc transitory-
that is, really appcrtaining to a crisis-or
whether they be really permanent and def
nitive, and which time will only show to be
Interchangeable? George Lavclye, one of the
foremost economists of Belgium, answers
this last question with decided affirmative
in q pamphlet which has excited great at
tention. "La crisc actacNc est unc cruise
defaitiuc," says he. The prcscut crisis,
as tho author says, is distinguished by very
important differences from all previous ones.
While, in former times, capital was in dis
proportion TO the great body of enterprises
and loan, tho situation has so changed during
the course of tho present crisis that we are
suffering from real plethora Of capital,
while there is complete lack of specula
tion and enterprise. Formerly, all that
was required was that unworthy enterprises
should fail aud swinding associations be
relations between supply and demand and
bring back a healthy condition. These
appearances, which have been always OBJ
served during the crises which have visited
us every deccnnium, have been more intense
in the present one There has never been
such contraction; labor and prices were
scarcely ever 80 reduced; but the usual effect
has not followed and we are left now TO
consider whether we have not to deal with
new social fact and phase. The marked
apppaarcnce Of this crisis, is, that capital
has failed to perform its functions. The
stream Of fruiton which had flowed for
forty years from rich to poor countries has
been stopped. The consequences are, an
enormous accumulation of cash funds in the
bank vaults, a fall in interest on deposits to
a quarter of per cent. and rise in the
secure Government paper of all countries.
This reluctance of capital to venture into
any enterprise is so great that only short
term loans can be had frst-class paper
discounted at por cent, and renewals at
from II to per cent. No one speculating
and it is Z fact, as Iavclyc says, that even
one may starve.
This holding back Of capital has the effect
OF leaving poor countries deprived of the
means to develop and increase their consu.
ming power. The final result will be that
this capital will throw Itself with too much
intensity on home spoculations, and thus ruin
commerce by distrustng every foreign loan
Tho poor countries are reduced to atomy;
while tho wcnlthier ones, through tho
dwindling of income, are becoming weak
and destroying their trade connections.
This is, says Lavelyc, no transtory appear
ance.
We have to do with permanent trans
formation. Tho great factors which formed
capital in former deccnniums, have ceased
to act. Europe has finished its most impor.
tant railway lines; tho United Statcs are
provided with railways; tho greatest tunnels
have been bored; colossal harbors en-
larged; tho Suez Canal created, and tho
almost fabulous problems of mechanics
solved. What remains to be done is small
to what has been; and this is, as experience
has already shown, barely profitable and
cannot therefore tempt capital from its
reserve. The Bcsscmer process has injured
iron works; tho English inquiry Oh foreign
loans has destroyed all confidence 10 these
We look in vain for anything to support
tho assumption that capital will find tho
field, which, apart from over speculation,
it has had. We may indeed look to China
and Japan, cut the Isthmus of Daricn,
connect India with Europe by rail- open up
Africa, and build Australian railways;
but all these arc exceptions nero drops in
the sea.
We must not imagine that tho demand
for capital will bo what it has been. What
will be the consequence? They may be
summed up in few figures. Until now
tho normal rates of interest have been, Tor
fist class securities from 3 to d per cent.