New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-10-10
NEW PUBLICATIONS.
THE THEORY OF RHYTHMIC LAW IN BUsI



RoDEhIcx H. SMITH. 12mo. PIP ls2. q. T. fut-
mans Sons.
II is O melancholy illustration of misdirected hui
man effoIt, when thoughtful and ingenious man.
with considerable gifts for various kindo OF useful
ness sets himself to solve scientific problem WIN
out much scientific information. CT any appreciate
familiarity with scientific methods. The author OF
this book shares with many the Idea that soine-
where there ought t. be found rhythmic law gov
erning the changes in the business world. great
many people in different ages and different coun-
tries have held the same idea, and not few, Ike
Mr. Smith, have set themselves to demonstrate H.
Most of them moreover, having the poetic faculty.
and being gifted with the brilliant Inauguration
which readily embraces the theory that the worio
commerce ought to move in regular cycles Just as
the planets do, have thought it enough TO assert
the theory and to point out its beauty ts ei'iS
and its grandeur, just as n certain maine halician
in one of the colleges many years ago co'cel'oH
that he had solved the ancient problem of squaring
the circle, when he had contrived so-caled soiu-
tion which as he put it, was $50 beautiful that IL
must be truen But Mr.. Smith, with much OF the
same predispostion has also dim idea that some
thing approaching demonstration may be desired
by the practical public. Accordingly though sew
eral chspters of Lis book are devoted TO hghiy
poetical description OF the rhythmic movement asst
ought to be- the body of The work presents statls-
tics designed to demonstrate the theory.
Somebody has cyncally remarked that any man
who starts with theory, to prove 1t by hgHeS'
will prove il to dead certainty, II not 10 TIE sat-
isfaction If anybody else. at least to his own. III
statistical as in other philosophical inquiry IL Is
not altogether wise to start with theory anu t"o'
to search for facts that fit it, The world is full oi
facts and If man hunts Icing enough he can l"u
some to fit any theory under the sum- Moreover
the habit of mind which the presence aud worship
of beautiful theory engender, is apt to predisposc
the inouiIer to manufacture his facts as nc pro-
ceeds. and to supplement deficiencies OF search by
ingenuity In shaping. Most of the treatises Ill
which efforts have been made TO demonstrate the
existence of a rhythmic movement in business al
fairs are filed with illustrations OF tins disposition
10 twist the facts. In justice to Mr.. Smith IL may
be said that he does not consciously dls'ort tno
facts which lie presents, and thus it comes to pass
that one scarcely needs to look beyond his own
tables for evidence that the conclusion which he
draws from them is not warranted
Repinoinp with q review of commercial failures,
Mr. Smith eadeavors to show that since l6OO there
have been four years of small liabilities ana 10"
ratio of failures followed by six years OF larger
liabilities and high ratio of failures ana again Dy
four wears of small liabilities and few failures
Since 1882 be cOnceives that the country has en-
tered upon another downward movement yet uhnh
concludes that periodcity of ten or eleven years
is established of which no also finds traces III Eng
lsh commercial history. The idea is not new. But
II has been so many times dlsproved that 1t Is
strange Ia see it reappear in the pages of au intel
lipept and ingenious writer. The facts which Mr.
Smith c0nscientiousy gives show that he would
have been Obliged TO modify his theory II MS COM
parlson had begun little earlier. The years 1897
and 1861 were as noteworthy for number OF tai-
ures and for magnitude Of liabilities as any III our
history Mr.. Smith cOnceiycs that 1907. with fall-
ures averaging one in "a of the firms th"n IN busi-
ness is to be reckoned as the elimination OF
downward movement. If So tie year lSGl, with
moro than one failure in II, must also he the Gull
mutation of a downward movement nor can the
velr 1857 be overlooked, with QUO failure for
everv % Arms in business Reckoning these years.
we have periods of extreme deprcssl IN separator
by intervals of four years. OF six years. ana u
eleven years. Il is more difficult to reconcile
the fact with the theory If one goes further BACK,
and Mr.. Smith certainly wise in conlIhlng lis
investigation to the last eighteen years which give
10 room 10 determine whether his supposed cycle has
actually REQUIRED even once III its completeness.
In the next chapter Mr.. Smith compares the
price If pig iron for series Of airs. hut why the
uricc7 Why did he not compare the production OF
niu non or tho profits of ron-making establish
ments' Tho effort to make the prices If iron ht
theory Of cleven-year periodlcity is melancholy
failure Tho truth is that from 1881 TO 1886
prices of iron advanced. and then declined from
1896 10 1913 au upward movement from 1913 10
1877 lasiol four years and downward movement
from Is II 10 1850 lasted three years. The next
upward movement endcd in 1854, and the next
downward movement III 1883 though the subsc-
oueut rise in 1899 was followed by two years OF
deoression AID still lower prices In 1861. Then
followed three years of advance, aud from 1864 to
1870 six years of decline; again two years of adj
vance and from 1872 to 1873 six years OF decline
again two years Of advance AID from 1880 to 1884
four years Of decline. Ii will be observed that tie
interval between the first point OF low prices and
the second is niue years; the second interval is
seven years the third interval either eight years
or eleven years. Mr.. Smith may please; the
fourth either twelve years or nino years tho h!th'
eight yeats and tho sixth only six years thus far
Cor the price Ia 1885 las shown symptoms of re-
covery 1t requires much ingenuity To find In such
facts as these confirmation of the theory that
n.rola of extreme depression recur regularly III ten
or eleven years. Had Mr.. Smith been pleased to
conparo the production lie wodd have found Sill
greater dilicuty in TccOnciling tho facts with the
theory Tor the years of minimum production within
The last twenty are 1851, is03. 1861, 1865, 1876
and 1851, aud tho years OF maximum production
arc 1856, 1860. 1894. 1873 and Ss3.
Mr. Smith next turns 70 The building Of railways,
rs if 1t were quito Independent line Of evidence.
Apparently he docs not realize that railway build
ing has anything to do with the prices of iron. In
later chapters he introduces evidence of tie rise and
fall ia c!earings at New-lork and in tie sales Of
stocks at tho Ncw-York Exchange. as if these also
wore independent phenomena, strengthening a
conclusion 10y their corroborative evidence The
fact that tho four are only different phases OF the
same pIleIoineuo;. does not seeIn to be within bis
range Of vision When stocks largely sold,
clcarings are large; and when stccks are largely
sold, many railroads arc built, because the money
can be borrowed TO build them with; and when
many railroads arc built, much iron is consumed