The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1895-06-13
PRODUCTION ADJUSTED TO DEMAND


(Prof. Laughlin.)
Anyone can see that an ocean steamer
does not sail any easier when the water
beneath 1t is five miles deep than when
Il is 200 feet deep. Provided there Is
always water enough for its draught,
then any additional depth Is immaterial
to its sailing properly. The level Of the
surface of the ocean above Its bottom
is rl,t the primary condition of bearing
a steamer on its bosom. The real thing
In all cases is the buoyant quality In
the water, which belongs to a small quanS
tity of water as well as to miles Of 1t.
A steamer as certainly floGts on the river
as on the ocean. In a similar way, we
see that goods go back and forth, ex-
changing with each other In some gem
eral level of prices. 1t is not the mere
level of prices which is important to
their exchange 1t is the stability Of the
power which buoys up that level for any
given time. After an adjustment has
taken place. higher or lower level Will
do as WE'LL; the difficulty arises solely
from the process of change, not from
the level after II is once reached. But
II the level keeps changing, now up, now
down, never remaining steady, ever
changing in It's quality, then the worst
may happen. No estimate can be made
OF the future, and property Is destroyed
In the ups and downs.
In the panic Of 1893, when 1t was feared
that the single silver standard was COM
ing, the whole damage came from the
fear Of a change in the standard. AZ con-
traction of the currency took place; but
that was not the real cause Of the in
Jury. That was only a consequence.
While everyone who could tried to get
gold before 1t was too late, 1t was equally
desired to get rid of silver money. SO
some money was withdrawn and boarded.
But this was merely the result of some-
thing else. What was that something
else? The increasing amount of silver
money growing into large sums In the
treasury and the diminishing quantity
OF gold there Ii the treasury were TO
suspend gold payments the whole coun-
try must accommodate itself to the situ-
alton. In trying to save themselves and
obtain gold the fright became general.
The contraction was result of fright
brought on by tamperlng with the stand
ard; the contraction was not the cause
Of the fright, because 1t came later. 1t
Is wholly aside from the truth, then, 10
assign as the cause of the panic Of 1893
the contraction of gold by bankers.
Men are constantly and properly doing
business in a way which demands fire.
quent recourse to borrowing. AS they
sell goods, they get discounts. And If
the purchasers meet their notes the dis,
counts are repaid. In any commercial
situation, then, we find constantly as a
fixed fact the existence of numerous
obligations, maturing within a given
time If goods are steadily produced and
60 on In their rounds to consumers, and
II the buyers have purchasing power, and
transfer 1t to the sellers, then all the ex-
changes are balanced. The goods are
expressed merely In terms of money, but
really balanced against each other In the
process Of exchange. Goods are at the
bottom Of the whole process. Men can
meet their obligations on time IL the
movement of goods is uninterrupted. II
is the thing which stops this movement
of goods which, in fact, makes II hard
to meet maturing obligations. Anything
which destroys confidence In the produc-
tive processes, or which makes uncertain
what man shall get for his labor or
goods, makes II hard to meet maturing
obligations If a manufacturer finds that
he has a note coming due July for $40,
900, and II the sale Of his goods is likely
to be made for a money which may any
moment be dlstrusted he will stop his
operations rather than lose all or part
OF his results. And IL others who owe
him fail he cannot meet his promises
Then, when he asks for credit, the banks
require security. That Is, II he has prop
erty OF a salable kind, he can get credit
and so meet the demands made upon him
In any particular case OF loan, II Il
not a question OF how much OF cir
culatlng medium there Is floating abou
the country; It Is a question of wha
goods or securities of market value thu
applicant has on which he can base hi!
loan. so goods and property are behin(
all exchanges and all credits and loans
The panic of 1898 was due, not to I
scarcity OF money, but to condition.
which brought about loss OF contidenc'
and a disturbance to the natural and ra
tional movement OF goods between pro
ducers and consumers, Today we ar
working again into a readJustment. l
is not any increasing level brought abou
by swelling the circulating medium
which is bringing us returning pros
perlty, and unemployment to labor, fol
our currency has been little changed. Il
is the readjustment OF production o.
goods to a sound demand-to demant
also backed up by legitimate purchasing
YNntuar