Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1883-01-11

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the penal servitude, imposed by their own
misconduct.
THE BANKRUPTCIES OF 1852 AND
THEIR LESSONS.
The business man who desires TO be pre-
pared for all contingencies cannot too care
fully note the occurrences of bankruptcies,
their increasing or decreasing number, and
the causes OF increase or decrease. He knows
that after commercial panic there is a
general restriction of credits; little granted,
and those at short dates, becomes the rule.
When the panic influences have passed away
confidence replaces caution. Manufacturing
and stocks of goods increase, and when the
increase reaches or passes the limits of de-
mand, every effort is used TO effect sales.
When goods are thus pressed upon the mar
ket the businens man viii become prudently
cautious, as the first result of this pressure,
which causes active competition, is lowering
OF prices; the second is an extension Of
credit, extended as an inducement to purchase.
The result is that capital gets beyond the
control of Its owner, and when some unex-
peced failure, or ether contingency occurs,
money TO mt ct obligations cannot be got to-
gether in time, and men of ample means
even become bankrupt although owning more
than they owe. Thus the ian who has not
been careful to keep sufficient means in an
available form, finds himself in the same
predicament as the man of insufficient
means. Bearing these facts in mind we may
with profit examine the excellent statement
OF r. g. Dun & Co. OF the failures that oc.
CURED during the year 1882, in its general
results. The total bankruptcies of the year
we're: In the Eastern States, 77s; in the
Middle States, 1867; in the Southern States,
1913; in the Western States, 1850; in the Pa
cic States aud the Territories. 731. In the
Southern States the greatest number of fail
ures occurred in Texas, 204; Mississippi
stands next, 1877. The smallest number
was in Florida, II. Georgia has 1873, Ala
bama IS, Louisiana 17s, aad Arkansas 95.
Tennessee mad 1874 against 1877 in 1881, los
in 1880, 152 in in 1879, 194 in 1878, and 81
In 1877. The amount of liabilities for each
year, beginning with 1882, were 81 ,6S2, 1854,
81 1893 1853, 81, O5l ,2l9, 81, SEQ 6, 1873,
81 POI, ITO. The total bankruptcies during
the year 1882 in the United States were
673S, against 55S2 in 1881, 4795 in 1880,
665s in 1879, lO,47S in 1878, and 1872 in
1877. Dun & Co. remarks that only one in.
terpret alton can be given to the noticeable
Increase of failures during the last two
years, which is, that The risks of business
and the losses by bad debts are increasing
In greater proportion than the growth OF
volume of trade, or Ihe possibilities oil
profit. Yet the figures do not reach the
number that occurred even when trade was
most restricted, speculation most dormant
and production hardly half of what It ia
to-day. While there are dangerous
tendencies in the country, indicated
by The frequency Of recent failures, The
extent of the disasters has been small in pro-
portion. That there should be such an in.
cresss in the number of failures during the
last year, while the Conditions were so ex.
tremely favorable to the prospects of the
country itself, is condition which obtrudes
as a most unpleasant feature Of the present
situation. The trade Of the country is moi
in the most desirable or healthy condition,
while the country itself was never more
prosperous. The power Of absorption by
consumers was never as marked, while the
ability 10 pay is greater, in proportion 10
Indebtedness, than at any previous period
True, The holding back of produce by the
farmers for higher prices causes an ekpan-
sion OF credits. This is but temporary, and
is hardly sufficient 10 account for the recent
disasters in mercantile circles. The CHIEF
cause of increased failures, beyond question,
lies in the alarming extension of credit,
which is the result of undue anxiety 10
dispose of goods without sufficient care as
to the means OF paying for them. This is
traceable to overproduction in manufactur.
ing centers. The methods adopted to induce
purchases indicate that the desire to restrict
the necessity 10 sell, produce such practices
as dating invoices months ahead. Thus tn,
volume of credit has become greater thar
is safe, while obligations are much less re
alizable for immediate purposes than if th'
extent and duration of the credit Wer
plainly set forth without subterfuge. j
these extensions of credit increase in proper
ton beyond the growth of business, a con
tinued increase in the number Of failure
must follow, especially in the absence of
national bankrupt law, because disaster
precipitated by the fear that one credito
will get ahead of another. II merchant
would notice the effect of large credits, the.
would discover that, in the end, NOR
money is made by striDgency in credit
than by unwise expansion; the present con
dition of the country is favorable for such
restriction. Future business will be aided b,
congre ssionsl legislation, by the lowering o
duties. and the release of money locked Vi
for the payment of the public debt; tn
farming community have also vast store.
which will add to the already increasing ex
ports; this will increase railroad earning
and the general prosperity. Itis difficult Il
discover any disturbing element, except over
production by mak ufacturers, pressure +
sell, undue extension OF credit, and the dan
ger oil individuals owing more than they cal
readily pay. The New York Indicator say:
ha g k,,
past year, although the aggregate OF trad
has been very large, yet the margin of prof
through close competition, has been YER
narr0w,while the expense CT carrying ON trad
has not had proporlionate decrease. An,
among the causes outside Of those incidental +
regular trade that have contributed in n
small degree to the mercantile bankrup;eie
Of the past year, may be reckoned speculs
tive ventures in stocks, petroleum, gran
and other domestic produce. The ayerag
trader has the American ambition 10 becou
rich with the least possible delay, and whe
he has in hand a surplus of cash he is easil
persuaded to invest in passing speculation
that promise large return upon compars
lively small outlay. Too frequently cue
ventures result in losses that ultim ately en-
in bankruptcy" From all that is here sal
the reader cannot fail to discover that
lower tariff, which would open foreign out
let for surplus manufacturers, would stoI
the pressure 10 sell, and the consequen
mischievous extension of credits
TIE raw, clustering winds of winter sesrcl
out the weaknesses of the tender-chested, an,
In consequences coughs and colds, lung an,
bronchial complaints more or less prevail
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