St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-01-05
THE BUSINESS VIEW OF IT

THE BUSINESS VIEW OF 1T.
1t is both valuable and refreshing to
get another view of the financial de-
preston through which we have passed
tnan that which is given us by parti-
sans III and out of the press, whose sole
purpose seems to be not the statement
OF facts and the deduction of truth, but
the creation of opinions which inure
to partisan benefit. 1t is this which
makes Dun'S review of the year 1898
both of value and of interest. because it
presents an aspect of the business stu
alton, seen through purely business
eyes, with desire to state only the
facts, and TO trace the disaster to its
real origin, regardless of all partisan
considerations.
The crash came with startling sudden
ness. and was the worst that the country
has experienced for fifty years. The
year opened with bright prospects, mills
crowded with work, and not the slight
est suspicion. except by the few who
had noted the downward tendency since
1870, OF the nearneSs of the reef on
which our industries were so soon to
dash. The iron and WOODEN industries
nave been the heaviest sufferers, both
in the diminished output and in the
shrinkage of value. Fleeces touched
the lowest point ever known; the sales
of cotton goods fell off a fourth; boot
and shoe sales fell off % per cent. The
shIinkage eff sales runs through every
department of production, and all have
suffered loss in price.
This depreciation was not confined to
manufactured products. but extended t,
agricultural produce as well. Wheat
reached the lowest price ever known;
pork fell off greatly, and the rise In til g
price of cotton was but temporary. The
Review attributes the fall of farm prod
uce to official and other reports which
''deluded traders with the notion that
crops OF last year were so short that FAM
Inc prices could be realized on purchases.
Enormous stocks were bought and
held with the aid Of banks. until heavy
receipts in the spring caused the col
lapse OF wheat, pork and cotton pools.
Disastrous failures helped to produce
the alarm which soon made money i'm
possible to get. Thus unreasonable
speculation, by preventing the sales of
surplus products, has proved q great in
jury to farmers at time when their en-
forced curtailment of purchases was
disastrous to all other industries
Touching on what it considers to have
been the cause of the panic, the Review
says: Monetary anXieties appeared to
cause the panic. and became epidemic
when doubts were raised in April by
rumor Of redemption of treasury notes
in silver. Western banks had given
reason for distrust by connection with
real estate and stock ventures. Depos-
its in rational banks alone decreased i'm
five months nearly 100000, 0O0." The
result of diminished consumption and
production was seen in the accumulation
of idle money to an extent greater than
ever was known before, amounting in
New Y ork alone to over S200,00O,0OO.
The Review summarizes its answers
to several thousand circulars sent out
requesting statements of sales during
the last half of '92 and '93. These show
decrease in sales of textile goods, III
the latter half year, of 81 per cent. Iron
reports decrease of IS per cent, while
jewelry, which one would expect to
show the heaviest loss. reports a de-
crease Of but 20 per cent. Furniture
felt the shock, and reports a loss of 26
per cent, while dry goods escaped with
a loss of 20, and hats and hardware lost
10 per cent. While shoe manufacturers
sold Is per cent less in that time, the
dealers in shoes sold only per cent
less, and the clothing trade reports
trade losses have been more the result
of enforced economies than of destitu-
ton is shown by the fact that groceries,
SO far from sustaining any loss, report
aggregate sales l per cent higher than
in the last half of 1892
The decrease in the price Of farm
produce is one of the features Of the
situation which prove conclusively that
the financial depression was not local,
but extended to other countries. dimin-
ishing their capacity for consumption,
and thus furnishing one factor. in the
decreased demand, for the shrinkage II
price. AS it is the export price of farm
produce that fixes the price here. had
conditions abroad been such as to MAIN
tain the demand and price for our sur.
plus there, the price could not have
fallen here, no matter what the financial
situation was.
The Review says that in the thirty
seven years gone by its records of failures
have never but once before risen above
the number this year, which is given
as 1860. The strictly commercial fail
ures this year carried liabilities of $751;
1889; the banking and financial fail
ures carried liabilities of S21O, $50, 1914,
while the liabilities of the railroads that
have this year passed into the hands of
receivers are s212. 217, 633. Manufacture
ing establishments to the number of
1926. with liabilities of S165, OOO,O 900;
1858 trade failures, with liabilities of
So, 200, 900, and 800 failures of brok ers
and spectators, with liabilities of $685.
100000, complete the record of this
most disastrous year.
The Review expresses the opinion.
stated by the GLOBE in the early days
of the panic, that its real source was to
be found in the elimination of a specu-
lative spirit which had infected nearly
all lines of industry. 1t had run its
usual course in real estate booming.
and had left an enormous quantity of
equities resting on real estate whose
market value had shrunk below the
face value of the equities. 1t had af-
fected the jObbers and dealers. both
wholesale and retail, and led them to
load up with stocks to be worked off on
inflated lines Of credit, while the manu-
featuring Industries Of the country had
been melted by the stimulation of the
Mckinley tariff into excessive and un-
warranted production. The result was
an enormously inflated credit becoming
more tenuous every day, and, like a
bubble. only waiting a prick point to
hiring ahout it9 cnmDIata fotIanco