St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-04-29
INDUSTRIAL DEPRESSIONS.
Written for the Globe.l
CHAPTER TTJ

written for the GlObe.l
CHAPTER III.
| LAND SPECULATION AND FINANCIAL
PANICS.
We have seen how the constantly in-.
creasing price of land finally brings the
producers TO the point when they hayea
little or no profit from their industry:
We have seen how labor and capital. ins
their attempt to pay these unnatuya
ally high prices. enter into contraefse
and mortgage themselves beyond theirs
ability. vainly hoping that in some way
they will, at the last moment, be abSez
to meet their obligations, and avert imsq
pending ruin. But instead of their con=s
dltlon becoming better. it always be-
comes worse; and. as the weeks aRdG
months go by. it becomes harder apttr
harder 10 get cut from under. Each oHss'
TRES as hard as possible to save
something above the mortgage THAT.
IS on him, and SO exerts every
energy TO meet his interest. He can
usually get his mortgage renewed for
Two or three years. The lender is wii-ss
ing TO renew if he has received his in
tprest promptly. The borrower renewsT
ln'the hope that prices of land will take !
turn upward before second renewal
Is necessary, and thus allow him To save
himself
But times always grow harder instead
OF better after land boom has reached
It's highest point. Usually for two or
three years rents and the price of lots
anu lands remain about the same. There
Is no rise, ana peoble complain of stag
nation in The ''reai estate" business.
1 he truth Is, that rents and prices of
lands are too high, and that all lines
industry are gradually being ruined.
Finally some fail 10 meet their inter-
est foreclosures begin. A year or
more may pass before the final sale.
he prices of rwa-or three years before
are not realized Lots and lands are
sold Under the hammerat half or third
their former supposed value. People
begin to see that prices were
TOO high Confidence is gone
Eere never was any guod reason for
confidence in these inflated prices, but
now even the most sanguine boomers
see that tile bubble must burst
Ii Very soon does burst. Those that
have been lending refuse TO renew
Many WHO have borrowed on inflated
prices supply stop paving interest. and
deei!e to let the property go. Then
the collapse Comes. Then every body,
even the conservative citIZen," begins
to STE that the end is reached.
During all this l,eriad Of rising values
the banks ami money luaners have been
lending on speculative estimates. In
deed, lhe bank that refused 10 lend on
Inflated values would soon find Itself
without customers. Some little thing
-solhe small incideut-aetS as
match touched 10 a tram OF
powder. An unexpectett check or draft
Is presented tt selne bank that is deep
In the speculation. IL can't be met
Payment is refused. The news is noised
abroad. run IS started OH that and
other banks. Some close their doors.
Then co!ieS the pane" Then every
body wants his money. And nearly
every one wants to borrow more. But
no one will lend. because Ia. cannot know.
whether he Will ever get back agal2i.
NOW the "munpy strlngency'' is on Us.
Now There Is no money in the COUNTY,"
ooine people now begin To curse the |
banks, and insist that thew have brought 4
OH tue panic for purposes of their awa:
out just why the banks should make la
panic that Is sure 10 bring iuim uponai
themselves our philosopher c1 does not
coHdescend To explain. al
There Is just as muen money in theti
country as ever, cut each person that I
mas more than he wants to use Keeps
ciuse grip on it. He WON'T lend il. of ]
course lie won't. He wauld be a; foot 90
lend under such conditions. ID
mus we see how lanu specuiati6a
must III the nature of the case, bring.
on "nnauclai panic'' 1t is inevitable. II
Ii never can be avoided SO long as Ia,iti7i
specniati0ni exists i-Bt 1-iG flEss fd 81 81
OtAtr causes may help, and generallys4
90 heIp 10 make the depression in bust
ness greater-to make the pain worse
a money panic can be, and many times
has been, produced when there Was ITO
INDUSTRIAL depression, but such panics
are snor-tlived. They last but a few
DAYS. but panic must Inevitably follow !
every extended period of land-booming-
ne financial panic" is the must CON
Spicuous thing about the whole affair.
Like sky rocket il lfas attracted the
attention OF every one. 1t requires. no
Thought TO see the financial panic 1t
doe' To see the real causes. This is whv-I
Tile panic Is made the cause of so many
people, when IN reality it is not only I
an effect, but one OF The last effects of a
tong SERIES
After the panic is over we are usually
near the end ~