Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1884-07-29
When VIII Business Improve ?

When viii Business Improve?
From the Bankers Magazine. New York
10 answer this Question in satisfactory
manner we must inquire why the business
OF the country is depressed Only short
time ago it was bounding with prosperity,
now it is sunk in the valley of dependency.
What are the causes Of this sudden change :
lC Is not difficult to trace them. It is very
generally acknowledged that business enter
prises In many directions have gone beyond
the immediate necessity for them. This is
especially true of railroad construction.
hundreds ofmiles have been built for which
Lhere was no immediate need. Moreover,
there has been an r-production in all the
ieadlng departments of industry. The
modern facilities for production are so per-
iec5 that it is easy to produce most things
that are needed on a stupendous scale. 1t
was maintained by the older political econ
omlsts that over-production was impossible.
at some price or other every thing would
md buyer and consumer. But the error
OF this doctrine is clearly seen and admitted.
NO person needs more than certain amount
OF food Or clothing. No person can COM
lio1taulY eat two dinners on the same day.
1t, tl1erefore, a second dinner is cooked for
him, either it is not eaten, or if it be, he is
the worse for it. Consumption therefore is
limited. Production must be governed by
this limit or exceeded at an ever increasing
loss.
There are persons who assert that if peo-
pie were only to spend enough, business
would be as brisk as ever. They anxiously
inquire why do people at a time like this
economize? Why do they spend less for
dress, for living and in other ways? Why
are they less inclined to engage in new un-
dertakings? Why has hopefulness given
way to despondency? Why is there such a
dissemination to push out into the unknown
but tempting realm Of business adventure !?
Is there any reason, say these inquirers, for
this change in venturing?
In reply, it may be remarked that it is Of
the highest Importance how every person
spends his income. 1t is very true that all
the capital of the world is used, and that it
is spent over and over again. But it is of
the highest Importance how capital is spent.
If, for example, A invests $780, 600 in the
Northern Pacific Railroad enterprise, and
no dividends are earned for many years, he
has no income from that sourse to spend-
That sum previously earned him an income
which either he spent in further production,
or ID gratifying his tastes or pleasures, or
loaned it to others who employed it in some
manner. But now he has invested it in an
enterprise from which there is no RETURN
He has nothing therefore to spend from this
source, whatever his inclination might be-to
spend if he had it. Suppose instead of in
vesting it in that enterprise he had put it IN
TO one yielding an annual dividend of eight
per cent. In the latter case he would have
an income either to spend or to loan to 9TH
ers, which they would not borrow, of course,
IT they did not expect to spend it.
These illustrations, therefore, show very
clearly that the Importance Of profitable
expenditure of capital can not be overrat-
ed. One reason why so many fall into error
on this subject is because they regard money
as the mosG important part of capital If,
therefore, money is used over and over
again, and is very active, they seem to think
it is d matter OF small consequence how it is
used, whether i'll building the Northern
Pacific railroad, or in paying enterprise
like the Pennsylvania system. 1t may be
that the money is just as actively employed
in building the Northern Pacific as in build
ing another railroad that pays a handsome
protF, and that the money consequently cir
culates just as rapidly in the one case as in
tn i the for1,,n1 4,artA; -@>e
capital Is locked up for an unknown time,
gone into disuse; while in the other case it
is an active agency i'll promoting produc-
tion. Let lis advance these two illustrations
one stage further. The Northern Pacific is
Men are busily employed all
along the line. They may be- paid good
wages and receive them regularly. The
same conditions exist on the Pennsylvania
Railroad; but there is this marked difference
between the two enterprises which must be
kept il mind. One road yields no return
to the investor, the other road does. Inves-
tors in the one case have nothing to spend
from their investment; in the other they
have.
What has happened 10 our country is this:
a very large amount of capital has been in
vested in non-paying enterprises, and so
these investors are necessarily compelled to
spend less and to loan less to others than
before. They can not spend Or loan what
they do not have. The amount of capital
invested in such enterprises since 1879 is
enormous. 1t was inevitable, therefore, for
a period of depression to follow such an ex-
cessive locking up OF capital. 1t is true that
every person having large means can invest
a portion in enterprises not bringing any
immediate return. What portion can be
wisely set aside for this purpose must de-
pend on many things. Each case must de-
eide singly. Thousands of enterprises are
by men OF ample means who do
not expect an immediate return, and the
wisdom Of which is justified by the final re-
suit. IF every investor should look to i'm
mediate returns, Of course many enterprises
would never be attempted. Nevertheless,
the fact is equally clear, that for several
years past we have been expending 100 much
capital in this manner. A few persons only
could thus afford to invest, many who have
done so could not, and consequently they
are obliged to retrench. This, as we have
said, was inevitable.
II this diagnosis be correct, those who are
looking for a speedy return of prosperity
will look in vain. 1t can not come until
that have been launched SO reck-
lessly begin to pay. When they do, these
investors will nave more money, and, of
course, will spend more. All efforts to
galvanize business, to breathe into it an
artificial life, will prove fruitless, for the
reason that there can be no real improve
ment until the conditions before noted have
been met. When this time shall come no
one can foretell, but not soon we fear. Ger !
taliily uO blSuo VI Improvement dlc SeSu, |
yet in u certain sense the country has i'm
proved steadily. Many of the recently
launched enterprises if not paying are get
ting nearer to a paying condition. Like the
ending of the depression that began in 1878,
this also will pass away noiselessly, and al
most without observation. Those engaged |
in business will suddenly awake to more
day. The previous transforma-
tion was as silent as it was wonderful, and |
this is likely to occur in the same way. But
we should not look for it speedily, not until
the condition of things above described has
been fulfilled. Not until the people have
larger spending power can they spend more,
their desire may be. Let us be
cheered by thinking that with the growth
Of population and the settling and develop
ing of the country, many enterprises are ap-
more or less rapidly to paying
basis; and that thus the work of recupera-
Eion is going on, although the patient may
still be unable to get out of bed.
LICE IN POULTRY HoUSE.-All sorts Of
yermin can be banished from poultry
houses by keeping all the droppings remov-
ed and the floors, and walls clean, so that
LI,a Lox1 ,,1o " h.