Los Angeles daily herald., 1889-11-18
MONDAY. nov. rs, 1883.
Iren as ala Indicator of Business
ACTIVITY,

lren ms ala Indicator of Business
Activity.
It is as true in this age as in that OF
Solomon, that of making many books
there is no end. OF late it has become
the fashion to issue books treating not
only Of political economy, az it was in
the days Of Adam Smith and De Tocqus-
Vile, but to devote quite ambitious
works to minute details Of our daily life.
Some Of these treatises are Of an especial
value, and amongst them all none de-
serve TO rank higher than "Ths Science
Of Business" by Mr.. Roderick H. Smith.
Mr.. Smith has undertaken to reduce
business TO laws as exact as those which
govern the mathematics, and it must be
confessed that in bis effort he has
achieved marked success, and has
accumulated q vast mass Of sta
tisties Of great value to the sta
dent OF political economy. 1t may
be interesting to know that Mr.. Smith,
who issued his book in 1886, predicted the
period Of depression through which we
have just passed or through which we
are passing--it is devoutly to be hoped
that the former postulate is the true one.
As he was prophet in the first in
stance, his prediction that 1890 will be a
year of phenomenal business activity is
worthy Of attention.
The other day the world was startled
by the announcement Of a great activity
in the iron market in London. The
HERALD Immediately declared that this
was a precursor OF better times, basing
the prediction on the theory that an
active iron market is an infallible busi-
ness barometer. We had not at that
time read Mr.. Smiths admirable book
and we have found in it data OF a spe-
ciaily interesting kiad. The price OF pig
iron is an almost infallible indication OF
the condition OF trade. In 1852 and fol-
lowing years there was q boom
in 1t that ran the price up
from $22 6219 to s38 81. That was the
extreme limit, and in 1856, the year pre-
ceding the great panic OF 1857, IL had
run down to $2712T, striking $26371a
In that famous year Of depression, and
never halting until 1t sank to $40. % in
1851. About 1868 there was sharp re-
covery in the price of iron, which jumped
from 1923 81 in 1862 to $35 .25 in the former
year. In 1864, when il began to be very
plain that the Union cause was sure
winner, pig iron made a Jump to $50 %,
the highest price it has ever
sold for in the history Of the
United States. Everyone remembers the
great prosperity that followed upon the
close Of the war, and this was ushered
in by this tremendous spring in pig-ron
from $22 25 in 1858 to 500. .25 in 1864.
High prices prevailed for this metal un.
til 1872. Tho memorable panic Of 1873
was ushered in by a drop in the price Of
pig.iron from $4S.S7% in 1872 to
$42.75 In 1873. The price went
on steadily falling till, in 1873,
it reached the unprecedentedly low price
Of $l7,621f. Just kere began reaction,
and by 1880 the price had reacted to
$2s 80. Then began decline which has
been operating ever since, until the re-
ported activity in the London market
was announced the other day.
The consumption Of pig-iron has in
creased enormously in the United States,
running up from 9l9,7 tons in 1860
the fret year in which the totals are
given In Mr.. Smiths tables--to 5,178, ,122
in 1882, and 5,148, 972 In 1883. In 1880
the demand was so great that we we're
obliged to import 7s4, ,96s tons OF pig iron
from abroad. The activity in railway
building almost exactly kept pace with
the movement in pig iron.
No prophet has ever been 30 thor
oughly confirmed in his provisions as
Mr.. Smith has been as far as we have
gone, and we shall look confidently
for his year Of unprecedented pros.
perity-1690. When we shall strike
1t, we ought to remember Pharoah's ex-
perience Of the fat and the lean kline,
and save enough Of our abundance to
tide us over the poverty-stricken cycle
that is sure to follow.
Mr.. Smiths book ia written with can
tivsting elcquence, although he claims
to be strictly matter OF TACT. He re-
sembles Henry George in the interest
which he imparts to an ordinarily dry
subject.
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