The Goodland republic. [volume] (Goodland, Kan.) 1891-1907, 1893-12-15
CAUSE or FINANcIAL PANIcs.

kA1b6r q CERTAIN NUMBER OF discharges
a cannon bursts. When the strain on
cable exceeds the proper limit, the
cable snaps asunder. A panic bursts
upon commerce and industry by Sc
quence an inevitable. To an unhealthy
extent the transactions of business and
manufacturer are con 7ucted on credit.
This condition is forced on the bust
ness world by deficiency in the vol
ume of the currency in circulation, and
by the unjust and unequal distribution
Of wealth. In consequence credits are
extended and expanded year after
year, till at length they can bear no
further strain: then the chain breaks,
and people are paralyzed with fear and
distress
Now forced liquidation? begins.
There is an immediate demand for the
payment of all debts. Banks, even if
honestly conducted, have loaned their
deposits, and cannot meet their Iabili-
ties Securities are sacrificed, and
prices are reduced to the point of ruin
Factories close, and stagnation chokes
the channels of trade. All this reveals
the horrors Of stringent money mar
ket; for the currency available for the
payment of debts is not more than 10
per cent of the Indebtedness and no
method short Of bankruptcy has yet
been devised for discharging an in
debtedness of 800 with $40.
That panic is not an accidental ca
taclysm is seen in the fact that the evil
falls upon us at almost regular inter
walls. 1t appears that 20 years of So
called prosperity is enough to exhaust
the limit OF credit, with the exception
of one period when disaster overlook
US in 16. In this case the violent con-
traction of the currency precipitated
the panic in advance of the usual term.
To go back no further, the financial
history of the country has been stain
ed by the panics Of 81, '57 and '73; and
now the latest disaster, and perhaps,
the worst, is upon US.
Why is it, when the labor Of the
country produces a net increase of
wealth every year, that the blight of
bankruptcy must fall upon it every 20
yearsf There must be, Tin the existing
economical system, some inherent evil
that demands an immediate remedy.
Labor does not produce its numer-
GUS forms of wealth for the singular
purpose of throwing them into the
sea. There is no truth in economics
more vital than that affirmed by Rus
kin, "The crown of production is con-
sumption; and the wealth of nation
is to be measured, not by what it pro-
duces, but by what it consumes"
Whatever it is, therefore, which OBJ
structs or diminishes consumption, is
malign agency, scattering, wherever
its influence is felt, the seeds of death
The cruel fact must be faced without
falsehood or cowardice that certain
classes, insignificant in number, but
omnipotent in economics till now, alb
sorb, without consuming, vast portions
of production which they never earned.
For if all the wealth annually produc-
ed were consumed by the producers, or
if the surplus, whatever it was, remain
ed in the hands of those whose labor
created it, there would be no panics
and no bankruptcy.
Who are the leeches that fatten on
the labor of the great army of produc-
ton? Let not fear or prejudice re-
strain the question, nor ignorance fall
sify or malice deflle the answer.
First-The banks-they add nothing
to the productive wealth of the coun-
try. What do they fitch from itP The
3,700 national banks do business on
capital stock lin round numbers) of
s700OO0,O00. They have an average of
individual deposits amounting to ST.
100000. They loan this sum of 81
5O0,0O0,OO0 (deducting reserves,) which
gives them an increase that may fairly
be estimated at s120,O00,OOO. The inter
est they receive on their deposited
bonds may be estimated (deducting
taxi at-S25, 100000 more. And for all
this increase they perform no produc-
tive labor.
Second-The railroad magnates, by
their own showing, state their annual
increase to be $35o,OO0,0O0. This sum
is what they call their ''net earnings"
after they have taken pay for all the
labor involved in transportation.
Third-There are no exact statistics
of the amount absorbed by these gen.
tlemen. But from the vast amount of
property revealed by the last census as
under mortgage, as well as from the
study Of other data, it may be consid-
cred as an understatement to put the
sum that interest exacts of the actual
producers at s5oo,O0O,OOo. To sum up:
Banks .sI4s.ooo.ooO
Railroad. 35oooo,ooo
Total. .so9s,oOO,ooo
So much taken from productive in
dustry without an equivalent.
Besides the parasites whose gains
are already enumerated, there are the
landlords. the coal barons, the telegra-
oh and telephone monopolies, the
numerous trusts and combines-in
word. all the organizations and agen-
Ia al f1,osr Golfers with T1nearn-