The Indianapolis journal., 1896-03-23
THE CAUSE AND CURE OF HARD
TIMES.


The hard times continue to be COM
mon theme of remark and discussion
among business men. Probably no per-
son now in active life can recall period
wien ii was harder to do business than
the last three years. Statistics show
there is plenty of money in the country.
but ii is not in circulation. There is a
lack of confidence and of the enterprise
that gives life to trade. Business seems
to have received a tremendous shock
from which it shows, as yet, little or no
sign of recovering.
If the present situation is not one OF
panic ii bears the same relation to a
panic that a low fever does to an active
one. 1t is, in fact sequence of the
panic of 1893, the cause of which is now
generally conceded to have been the
success Of the Democratic party on
free trade platform and the mischievous
agitation that followed, looking to the
abolition of an economic policy which
had long been recognized as an essen
tial factor in national prosperity. The
Democratic party came into power in
tion of our tariff system. This threat
ard its subsequent partial fulfillment
precipitated one of the worst panics the
country has ever experienced. Every
business man capable OF tracing cause
and effect should be able to follow the
development of the present hard times
in the last two years balances Of trade.
under the Mckinley tariff. the balance
of trade in our favor was $214,000,000.
The Democratic tariff did not have full
effect until about Jan. /, 1895, yet its
operation during the latter half Of the
fiscal year ended June 80, 1895. reduced
the favorable balance of trade from
$214, 600. 900 to $61. .O0o,O0 Our exports fell
from $l,015, 1901 in 1892 to $793, ,397, $50
in 1895. Expressing it in another form.
our per capita of exports in 1895
amounted to 1858 for every man, wonl-
an and child in the United States, while
in 1895 thy were only $11.37. The per
capita of balance of trade in our favor
in 1892 was $500 for every man, woman
and child in the United States, while in
1885 it was only SS cents. These figures
enforce their own conclusion. 1t needs
no argument to prove that so complete
a reversal of the currents of foreign
trade, accompanied as 1t was by the
closing of factories, reduction of wages
and a general upheaval at home, must
have paralyzed business. 1t did. and
the present hard times are sequence
and result of the panic thus precipi-
tated.
There have been thirteen business
panics in the United States during the
present century, but that of 1893 had
some features that distinguished it from
all others. Those of 1887 and 1861 were
mainly industrial and were not accom-
panied by much monetary disturbance.
The panic of 1873 was mainly financial
one, but that of 1893 was industrial.
financial and monetary. Bank failures
and suspensions of commercial and in
dustrial establishments were Of almost
months of 1893 more factories closed
than during the entire panic Of 1873 and
the six years following. OF cotton mills
% per cent were closed. of woolen mills
4S per cent, of knit goods 53 per cent
By the middle of August nearly five
hundred textile works had closed. From
Jan. / to Sept $50 State and private
banks suspended and 155 national banks
failed. About half of the latter re-
sumed business, but the shock of the
suspensions was none the less great.
From Jan. to Sept 80, 1893, the total
number of business failures in the Unit
ed States was lila, as against 1873
during the same months in 1892 Ac-
cording to Bradstreet, the total number
of failures during the year was 1860,
the largest number ever reported in any
previous year being 1884. The record
for 1894 was nearly as bad. the number
of failures during that year being 14,O10
These figures will serve to recall some
of the salient features of the most wide
spread, deep-seated and far-reaching
panic the country has ever known. 1t
stands to reason that such panic must
have long train of sequences, and the
present period of hard times is of the
number They are the logical outcome
of the Democratic victory of 1892, and
the logical cure is a return to protection
and reciprocity.