The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1896-08-09
KILLING THE GOOSE.

KILLING THE GOOSE.
Some part Of the disturbances and
uncertainties Of business in this coun-
try and Of resulting failure seems to
us to be due to the general invasion Of
the field of legitimate business by the
speculative spirit. We are forcing
everything at a high pressure speed.
We do not permit industries to run
their natural course. and to develop
along lines that insure stability The
rage for profit Is such, and the mobil;-
ty of capital in these times has become
so great, that no variety of enterprise
that returns even reasonable profit
is allowed to remain in that condition.
There Is forthwith such rush Of en-
terprise In that direction that the
margin Of profit declines or disappears
altogether, and capital and labor, hav-
age, are once more left idle and on the
lookout for employment.
The case particularly in point at
present is the decline in the profits Of
enormous investments of capital in that
business within the past two years.
There are at present some evidences
of distress in this line Of industry, and
to the wall. This is the first clear
symptom Of overproduction. 1t is an
inevitable consequence of the gravita-
ton of capital by millions to a new
field, in which there are promises Of
advantage and speedy returns. The
illustration is an excellent one, because
the industry is practically new. Until
very few years ago the bicycle was
scarcely more than a toy. It's sudden
adoption by all sorts and conditions
of men and women created demand
greater than the manufacturing facili-
ties then in existence could supply.
Prices were made and kept high, pro-
fits were large and the output Of the
factories was frequently contracted for
full season in advance. Since many
other industries were languishing and
large blocks of capital were lying idle,
the opportunity was too tempting to
resist. Everybody went into the bicycle
manufacturing business. New factor
les by the score sprang up all over the
country, new patterns of wheels were
introduced by the hundred and the
stress of competition changed from
buyers to sellers.
These are the conditions that must
surely affect market. Some of the
concerns that were least able to stand
the strain of this fierce rivalry, upited
with the contracted credit caus. ea 4v
financial uncertainty, have goebss q
liquidation. The strong tirms,t which
are many, and the wheels that have an
established reputation, will maintain
themselves without difficulty, although
1t is probable that the day Of great
profits is past. But there will be MANY
losses on the part of those less able to
meet current conditions, and the mar
gin Of gain will be diminished all
around. This is consequence of an
unnatural development of industry by
speculative methods. 1t is a case of
that disposition to kill the goose that
lays the golden eggs, which is becom-
ing too characteristic of the American
people. On the 90 hord Glands an
array of monopolies and trusts which
gather in heavy and unearned profits
by combining to restrict production
unnaturally, and prey upon the neces-
sites of the consumer; while on the
other hand stands an unrestricted
competition whose unwfsdom of act
ion Is as fatal to capital itself Both
or these tendencies are, at least tn an
indirect sense, product Of the protec
i've system. It has taught the man
ayers OF business interests In this
country that industry does not deveTor
naturally, and that you must be on the
lookout for a chance, possibly created
artificially by legislation, to make
money, to work tt for all that 1t is
worth for few years and get out your
pile of profit before the crash comes.
This is the history of the growth of
most of our industries under protec-
ton. First comes the imposition of
TAX that offers to capital big bribe to,
go into an undertaking that it wouId
not assume upon it's merits. 1t is a
speculative risk No one knows how
soon another party may come into
power that win change the law and
reduce profits. No one capitalist knows
how many more there are who ara
going to plump their millions into the
same line Of business and drive IT hard
while the opportunity lasts. So the
American people have been educated
into the habit of rushing business I'M
naturally, squeezing the orange dry
In a few years, and then having to
spend all the profits Of that brief space
IN carrying themselves through a long
succeeding period Of stagnation and
loss. Take the condition of the tin
plate business, for example. The Nc
Kfniey law placed such an enormous
bounty on tin plate production that
millions upon millions of capital were
forthwith located permanently In ex
tensfve works for its manufacture.
A big profit, again. diverted capital
unnaturally into that channel. Then
came the reaction; which the price
lists show to be entirely independent
OF the operation of the present tariff