New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-10-08
THE Pulling FACTS or TRADE.

THE Pulling FACTS or TRADE.
Facts enough to be twisted into an argument
on either side can always be found by those who
seek arguments rather than truths But the
present conditions of business present features
which are not rcconciled easily, even by those
who study events with the most candid spirit
There are seeming contradictions, both In the
progress Of Industry and the movements of prod
nets and in the course Of prices, which need to
be carefully compared before conclusions can
be reached regarding the future of business or
the bearing of existing facts upon tariff or cur
rency questions
During the last hllf-year a really remarkable
advance has occurred in prices Of leather, iron
and cotton products, Notwithstanding note
worthy decline in food products and other arti-
clcs as a whole The mounting prices appeared to
be caused 10y an enormous rush Of orders To Duy,
actually exceeding the capacity Of works in
operation, and yet. now that prices nave rlscn'
this same advance is the apparent cause OF a
shrlnkagc In orders so that they fall much below
the capacity Of works This same shrlnkage
appearing ut the very time when good Northern
crops are gaddening the hearts and hllinS the
pockets Of farmers, and when advance OF wages
for many thousand manufacturing and mining
hands has increased their power to purchase,
seems nexplicabc TO some. so that they are
even inclined TO doubt whether the shrinkagc
can be real or whether it can in any case last
more than a few weeks. II is clearly impossible
to form any valuable estimate of the future
without correctly understanding the present
conditions and their causes.
The fact mos. frequently overlooked is the ire
mendous elasticity Of American enterprise
which leaps upward ike coiled spring as soon
as the conining weight IS removed. Like the
spring, this upward bound naturally goes higher
than the point which can he held in normal
condition of freedom. 50 that some reaction Is
natural The illustration perfectly fits facts of
trade which are everywhere seen. The whole
sale and retail traders in Il natural condition
of business carry stocks considerably in advance
Of the demand Of customers. These STOCKS
greatly reduced in times of prolonged deprcs-
siOn have to be rcplcnished in order To meet an
ordinary activity of trade when the depression
passes. Without attempting an accurate cstl-
mate. IT may be assumed for the present purpose
that quarter of the years product Is ordinarily
carried by the traders of all sorts when business
is normal, So that when they have to buy enough
for three months distribution, and at the same
time enough to replcnish their stocks TO some
thing like quarter Of the years trade, so as to
carry full instead of empty shelves. their buying
must for a time exceed the quantity required for
three months consumption.
But there is another factor Of human nature
which is equally well known. namely, that bright
prospects after a long period Of gloom usually
stimulate men TO take larger risks in seeking
profits by anticipating the future. They hope
for more than the normal business. believe that
even II more does not come purchases on
rising market will at least be safe. and are in
haste TO buy chcaply before competitors have
bought So the rush TO buy. when depression
ceases and prices start upward, almost incyl-
taby goes beyond the normal rate Of dlstribu-
ton or consumption and pushes prices higher
than they can be held. mt least until conditions
cause n new rise These are precisely the phc-
nomena which have been Witnessed in many
branches of business. and there Is nothing
strange or disappointing in the fact that after
such an abnormal rush Of buying Il season of
hating In prices and slrinknCc in transactions
naturally follows.
Whether n reaction will last days or months,
whether it will take prices downward or merely
arrest a rise. must be judged from conditions
existing in each trade by itself. one general
fact may be taken into account everywhere.
that the replenishment Of depleted stocks made
buying larger during the last six months than
1t can be expected 10 be without a further ex-,
pansion in consumption 1t IL also the fact that
rapid rise in prices always tends 10 check
actual consumption even when II stimulates
buying by dealers People accustomed to pay
81 cents for mems grain shoes last January, and
30 cents for womcn's split shoes. do not pay
81 - for the mems shoes in September and -
cents for the womens without some hesitation.
1t Is undenablc that wages have advanced
about 10 per cent for grcn many workers.
though as yet not for anything Ike half the
whole working force, and that wholesale prices
Of food are low. But everybody knows That re
tail prices Of bread do not fall rs soon or ns far
az cargo prices Of wheat and so Of other articles
for direct consumption. The cost OF living has
not been lowered in proportion 10 wholesale
prices Of food but has been Increased In greater
proportion MS 10 cotton and leather and iron
articles than the Wholesale prices OF these.