The herald., 1897-06-13

be all right. but he Is In debt, the debt
must be paid. and hence 1t is not usually
practical to make the change. Ifit were
he would not be in debt.
Gradually the surplus debts OF the
country are paid and the people breathe
easier again. People live within their
incomes and temporarily learn economi-
cal habits. Men smoke fewer and
cheaper cigars and ladies purchase
fewer ribbons and occasionally fix over
a bonnet and dress instead Of getting
new ones
A time Is finally reached when people
begin to get out of debt, and then they
begin to live a little better, buy more of
the necessaries of life and some of the
luxuries. As the number of people in
such improved condition increases, trade
begins to pick up; larger orders are sent
to the factories, more wheels are set
in motion, more operatives are en-
ployed and more people are placed in
position to buy more goods. which in
turn starts more mills and gives en-
ployment to still more men.
Thus the business of the country Is
forced into an active condition, and thus
business activity increases in geomet-
rical progression until wages reach their
maximum point factories are running to
their utmost capacity, prices of all kinds
of goods and all kinds Of property ad-
vance. and people begin to purchase
again more than they have the money
to pay for-some because they want pro-
fit on increasing valuations and others
simply because of extravagant ideas of
living.
Money is plenty, credits are good, and
the masses are good pay because ali
kinds of property are readily converti-
BILE into legal tenders. Improvements.
public and private, are pushed to their
utmost extent, fancy prices are paid
for real estate because it can be sold
readily again at still more fancy prices.
Individuals of limited capital hold thous-
ands and hundreds of thousands of dol
lars worth of property on which only
small payment has been made An ad-
vance of per cent on the price of the
property is an advance of so or 100 per
cent or more on the cash investment.
Another transfer is made and another
soul is made happy. In short specu-
lative boom has struck the country
again gradually but surely. This specu-
/
movement on the part of. the people or
any portion of them to create a BOOM,
but it is the result of natural laws of
business and is just as certain to ma
terialize as a good crop is sure to be
the result of favorable climatic condi-
tions.
1t is not, perhaps, in order here to dis
cusc the millionaire question or inquire
| ..,t1 l~;,, II; ,;oI,
threaten to disturb so seriously the busi-
ness interests of the country. Itis how
ever, safe to say that those who think
during period of business activity that
such activity will always continue are
just as much mistaken as are those who
believe during period of business de-
preston that such business depression
will never come to an end.
Good times will follow bad times. and
bad times will follow good times. just
as surely as darkness follows day. and
day follows darkness. These periods al
ways have followed each other, and they
always will.
The seedl, of prosperity are sown dur
ing the periods Of financial depression.
and the seeds of hard times are just as
surely sown during the period of business
activity and speculative boom. There is
no question as to the soundness of this
conclusion. There is no question that
these changes will come. The only
question iS-when?
AT the close of a speculative boom the
change comes like a thief in he'night
In fact, a thief in the night would be a
welcome visitor to many instead of a
change which puts in an appearance, but
the change from financial depression TO
better times comes gradualhy-so grad
ually that for mon'ths there is a differ
ence Of opinion as to whether chane
for the better has actually commenced
or not
Glance for moment over the financial
History Of the century just closing, and
see what has been the cordition of the
country. During 1887 the country was
in the midst of a financial panic. Again
during the year 1S57-twenty years later
there was another panic. In 1878 a
financial crisis struck the eastern states
and the great banking house of Jay
Cooke & Co. was foundlamong the finan-
cial wrecks scattered throughout that
section Of country. In 1875 that same
panic reached the Pacific coast, closing
the doors of the Bank of California OF
San Francisco, together with many other
banking institutions, including the then
popular banking house of Temple &
Workman in our own Los Angeles-a
bank that failed for over a mllion dol
lars, and never paid a cent on the dollar
to the many unfortunate deposdtors.
In 1898 the next panic struck the
United States after having wrecked sc
many banking institutions in Soutf
1 America, Australia and other parts oi
the world.
During the year 1885. when the lat.
speculative boom was getting under
good headway in Southern California
Hon. D. c. Reed, now mayor of the city
. of San Diego, gave a banquet at the
Horton house in that city, to which he
invited business men from all points ir
Southern California. In response to tht
sentiment "The Prosperity of Southern
California" the writer, among othel
things briefly reviewed many of The
principles herein laid down and follow
ing the line of thought that waves o
prosperity and depression followed eacl
other with more or less regularity, pre-
dicted that somewhere between thu
years 1893 and 1897 this country woul,
!, again enter upon a period of bushes,
, depression that would be very sever,
on the business interests of the. country
The local speculative boom Of 1886