The herald., 1895-03-29
THE BUSINESS SITUATION
The Outlook as 1t Appears to Henry
CleWs
He Believes the Improving Tendency Is
Likely to Continue - The
Tariff Question

Tariff Question
In their weekly review of the trade stu
alton Henry Clews & Co., bankers, New
York, under date of March 23d, says:
This improving tendency is evidently
destined to continue, and in the mean
time the best guide to follow in Wall
street is the swing OF the pendulum. 1t
goes always to the extreme end on
each side before it turns. The adjourn
ment of Congress was the signal which l
proclaimed for its reversing its course
from the side OF disaster to the oppOSit te-
that of building up. The recent advance
in stocks and the still greater improve
ment i'll mercantile business all go to ver-
ify the correctness of my diagnosis of the
business situation under date of the 9th
of March when | proclaimed that There
is tide i'll the affairs OF men, which If
taken at the flood leads on to fortune,
and that the tide was then about to take
upward current. The bituminous coal COM
panies have settled their difficulties; the
anthracite differences are on the eve OF
being adjusted; railroad earnings are in
creasing; the reorganization OF broken
down railroads is progressing; silver has
advanced 4c an ounce; cotton and wheat
have gone up materially, which are all
factors that contribute to help the stock
market and stimulate increased buying
for investment account. The Rothschild
connection with the United States loan
and the success in placing the bonds in
Europe. cannot fail to lead the way and
stimulate London and Continental buying
of American railroad securities which, at
present prices. are certainly more tempt
ing than anything offered in other sec
tions of the world.
"In estimating the future it is not to
be overlooked that, in some very import
ant respects, this country is now in
materially better position than it was be-
fore the late depression set in. So far as
concerns the currency question, upon
which SO much has depended, that is GER
tainly the case. Two years ago. we were
in the midst of alarm and apprehension
that the nation might be precipitated upon
the silver basis. The danger was all the
greater because the position and the ques-
tion were not understood but greatly mis-
understood, and much education of pub
lie opinion on the subject was needed.
AS a nation, our ignorance equalled our
alarm. Legislation on the question was
undertaken with utter lack of qualifica-
ton to deal with it intelligently, and
Congress accomplished virtually nothing
towards settlement. But all this fear
and agitation has been attended with
profound examination into the principles
at issue; already public opinion has be-
come intelligent if not fully matured;
false principles have been discredited and
steps are being taken for bringing public
sentiment to a point at which a broad
and sound policy may be formulated for
the future guidance of political leaders
and of the new Congress. In this way
the people are being trained to a stand
ard at which large majority of them
may be trusted to stand firm for sound
system of currency. On this large
national question, therefore, we may feel
assured that we have passed from con-
dition of positive danger to one of pros
pective security.
"The tariff question, which two years
ago was having paralyzing effect upon
industry, has had it's day, 1t has been
settled in way less calculated to disturb
business than was at first feared; the
manufacturing interests have already
found ways for adapting their business to
the new conditions; and it can hardly be
said that the new state OF affairs is really,
upon the whole, obstructive to the prog
ress of our industrial interests. Thus in
the industries there is vast gain upon
the condition OF distrust and paralysis
that existed two years ago.
''There are other points at which our
industrial position has, in certain impor-
tant aspects, materially improved. Two
years ago we were at the climax of a
world wide production of manufac-
lures. 1t was the result of the growth of
the modern improved plant and capaci-
ties of production far in excess of any
possibilities of consumption, and was at
the same time consequence OF an over
doing of trade in the rawer and semi-civ-
ilized populations of the world. Our own
imitation of trade in other countries
and had, at the same time, it's own
forms of over-supply. Two radical changes
must be made before the beginnings of
recovery could apper. First there
must BE be reduction in prices,
consumption; and next there must be
some curtailment of production; while. at
some later stage, when these reliefs have
been realized, there would be chance
for the development of new consumptive
wants. The first of THESE necessities has
been met by a general and large decline
in the prices not only of goods, but also
of raw materials most of the latter being
now selling at prices unprecedented with
in the present generation. The reduction
of production has been brought about by
painful but natural and inevitable pro-
cess. The older plant, being unadapted
to cheapness OF production, has had to be
retired from use, and must be regarded as
in a large measure extinguished,
as, under the reduced scale of prices
it can now be worked only
at loss. In this way bankrupt compe-
tition has been eliminated, and the re-
naming active machinery is of the most
approved and economical type, and is
qualified to run at profit upon the lower
scale OF prices that has been established.
This change is of immense value to our
industries; for it not only admits of earn
ing profits at lower prices, but also puts
us in position to compete with other
countries in the markets of the world,
the effect OF this transition being already
apparent in many surface indications OF
the probable opening of new foreign OUT
lets for our manufactures.
1.-The facts above reviewed reveal a sit
uation in our industries full OF hope for
the future, and afford promise of an early
healthy development Of the trade of the
country"