Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1879-04-26
THE wORLD,s TRADE.
An Examination into the Causes of De
pressiOn-Facts and Figures-Causes
and EfHeets In Prices and Wages
Crises and Krachs-GernanY.
Austria, France. England.
and the United states.


and the United states.
New York Herald, 21st: NJ. Maurice Block
the eminent French political economist. has
lately published in the ReUue des Deua
MOHdeS an interesting study of the economl'
cal crisis now prevailing throughout the
world. His wide knowledge enables him tc
take a general view of the causes of the un'
exampled duration oil this crisis, and to fore
shadow, perhaps, some of the results. A
summary of what he says will be read with
interest and profit in America. The present
unprecedented period of depression in all
business began in Vienna on the ninth Of
May, 1873. few days before the opening oil
the Universal Exposition, by what is known
there and throughout Germany as the
''Krach." After the war of 1866, when
Austria was freed from the Venetian pro-
vinces (which had always been burden to
the State) and had made her peace with the
Hungarians, with the intention of repair
ing the disaster caused by war she turned her
attention to developing her material interests,
SO little was found had been done, and so
much could be done III the way of railways,
mines, manufactures and banks. Twenty
SIX Joint stock companies with the approval
OF the government, which is necessary IN
Austria, and which, at the same time, gives
in public opinion certain status IN the COM
panleS, were IOuDOeu III ICOt anu IDlILI-LNO
in 1868. The progress of speculation is shown
by the fact that one hundred and forty-one
companies were started in 1869. In 1870, on
account of the war, the number was some
what less, being one hundred and one; IN 1871
there were one hundred and seventy-fve; in
1872, three hundred and seventy-slx. and In
the four months OF 1873-before the 'Krach"
one hundred and fifty-four com panies were
established. Although OF these one thou
sand and FIVE projects only SIX hundred and
eighty-two were definitely started, a capital
amount of one hundred and sixty million
dollars was paid in, and the stockholders
took engagements to the amount of one bill
ion six hundred and eighty million dollars.
OF course some of the companies were finsn-
cially sound, but one hundred and thirty five
soon failed, and others have never yet paid
any dividend. In this way large amount
of capital was taken from its ordinary chan
mel in industrial commerce and agriculture.
THE GERMAN KRACH.
In Germany a similar increase of specula'
ton had been going on. One of the results
of the revolution of 1913 had been to free
industry in Prussia from superanuated laws
which sbackled it. and m anufactures had
gradually increased up to 1861. Owing to
the saving habits of the Germans much
money mad been laid aside. Many emigrants
had gone to America, and through their
communications with their families consider
able sympathy in the United States was felt
in Germany, SO that when the American
loans were placed in the market during the
war OF secession the Germans readily invest
ed in them. These were sometimes SO low
that the amount Of money gained was
enormous, and the fever for speculation so
started reached a very high point
after the Franco-Prussian war, when
it seemed as though Goods of gold
were pouring into the county from France.
Speculation, however, was attended with its
usual concomitant, dishonesty, and the scan
dals which arose in the granting of conces-
sions to raIlways-which were founded not so
much for the purpose of being constructed as
for bourse manipulation with the shares-be-
came so serious that they were denounced by
Mr.. Lasker in February, 1873. In the chamber
of deputies. These, together with great
number of stock companies-whichh had been
founded at the rate of only about thirty a
year between 1851 ard 1870, and reached
two hundred and twenty five in 1871 and five
hundred in lS72-shook public confidence
and with it destroyed the possibility of find
ing fictitious capital to create fictitious pres
perity. Thenceforth people had to content
themselves with their real resources, which
had become insufficient.
THE WAR OF 1870-71.
Living had long been cheap IN Germany,
and wages corresponded, when the war of
1901 changed old habits That war caused
the destruction or deterioration of an i'm
mense amount 70 material; 1t also compelled
the temporary closing Of many factories and
foundries. Stores had become exhausted; 1t
was necessary to replace them, and people
began to work with vigor, although with no
lees ardor they raised the prices. In part to
satisfy the demand and in part to employ the
money which came In, certain number Of
the creditors of Prussia were reimbursed by
the funds arising from the war indemnify
Manufactori- s were founded, shops were en-
larged, machinery and tools were renewed.
People went on without hindrance, for they
got the prices they asked, and they did not
bargain as to the payment of workmen. 1t
is needless to say that wages and salaries fol-
lowed closely the rise in merchandise and
provisions. Employers and workmen, in 1871
and 1872, acquired habits of luxury, many of
which they had to abandon in subsequent
years, and we all know how hard it is to en-
tirely change ones standard of living or even
submit to few privations. 1t was, Of course,
impossible to return purely and simply to the
economical situation that existed before the
war; wages were 10 wered, but provisions re-
manned dear. Many factories were closed
and the workmen thrown out of employment.
In many cases the punishment was well de-
served, for the rise of wages had not been
stimulus to progress. The better they were
paid the worse they worked. All evidence
agrees IN dIIIlUutluR tL0 ulmlnuIIOn VI Oof-
man exports to the falling off In the quality
of the manufactures.
THE CONDITION OF ENGLAND.
According to M. Block the country worst
off is England, though he thinks that, owing
to its vigorous constitution, it will be able to
overcome its difficulties, but not without
strenuous efforts. He calls attention to the
great decrease of exports and the increase of
imports The United Kingdom sells much
less of its products now than formerly. Ia
1873 the dimlnution in exports, as compared
with 1872, was about $4,000, 000 in 1874,
as compared with 1873, the diminution was
SOS, 900 600; in 1875, $50, GOO, 900; In 1875,
Sl24, 600 600; in 1877, SIS 400, 600; in 1878,
$50, 600, 900. Adding these together we find
total loss of over $519, 000, 900, which puts
Eugland at least ten years behind. The
profits have diminished though the wants re-
main the same. 1t is necessary for people to
give up expensive habits which they have ac-
CURED, to reduce expenses In everything, and
even to submit to reductions of wages when
unavoidable causes render them necessary.
This, however, is not accomplished without
difficulty. In 1873 there were pa strikes, of
which only three were successful; In 1877
there were III strikes, with about equal sue
cess. In the iron trade it is almost self-eVi-
dent that the welfare of the workmep, as
well as the manufacturers, depends upon the
prosperity of trade. In some branches of
the IRON trade the rate OF wages Is liked by
mutual agreement according to relations de-
termined by the price of the product in the
most important markets.
FALLING PRICES AND REDUCED WAGES.
When in the north Of England ton of
iron is worth $40 tie workman receives for
his work-"puddling, for example-l3s. Sd.
per ton. When the price falls to e8 las. his
wages are only IS. Sd. per ton. Now, for this
very reason, the wages for "puddline'' are
net more than Is. per ton. Since 1873 they
have lowered about one-halt-that is, they
are only about one-half what they were in
that year. In Scotland the wages of the
miner bear relation to the price of pig-iron.
la 1859 the price of ton of pig iron was
BIS. 3D., and the wages s. Sd. per ton. In
1879 the price suddenly rose TO lois, and
reached Ills. Sd. in 1873. Increased wages
followed the movement, and they went up to
Is. Sd. and IS. Sd. day. This was the cumi-
mating point. After that there was constant
and rapid fall; and in October, 1873, the
price of pig-iron was only As. 3d., and the
wages were reduced to Is. Sd. day. The
published reports of the stock companies by
which many of these furnaces are carried on