New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-12-14
THE PERIOD or DEBT-PAYING.

The most important factor In the business OF
the last few months is often overlooked. 1t Is
so large that men cannot see II whose eyes are
fixed on the tape in bankers or brokers parlors.
The first thing an honest people do, when re-
covery comes after years Of depression, Is to
clear off debts. The mortgages on homes and
farms cleared off within few months, espe-
cially at the West, have been in amount enor-
NOUS In Northern States between Pennsyl-
vania and the Rocky Mountains there were
more than 81, 100,000.000 Of mortgage loans on
farms, Of which a large part has been removed
within few months. Indebtedness Of farmers
TO storekeepers, bankers and manufacturers Of
implements was also large, and the amount
cleared of must be reckoned by the hundred
millions. In turn the commercial Indebtedness
lQudated has been much greater than many
imagine.
There are about a million persons or firms
engaged in trading and manufacture, whose
average liabilities may be judged in some meas
ure from the Indebtedness Of firms failing The
average was slightly under $4,000 for the
1900 failures which occurred last year. and the
current Indebtedness Of firms doing good bust
ness and enjoying good credit is not unlikely 10
average as much as that of firms finally forced
10 suspend But If so the volume of CONNER
cial Indebtedness was something like $4,000
100000 and reduction Of only part through
general liquidation by farmers and others owing
dealers and in turn by the dealers and manu-
lecturers, would result In an enormous decrease
N the volume of commercial Indebtedness out
standing. Exactly such decrease occurred
when good times began with resumption Of
specie payments in 1879. For several months
!; n.,-iaa 10 tho laV oil fOr oil
nodities was little lower On May 1 than 1t
was on January l. and multitudes could not
understand why there was not more quick IN
crease In buying and expansion Of business.
The fact was that men went 10 work first to
clear off debts
The average OF commercial liabilities had
been for more than four years over $4,000 per
firm. But In the last half Of 1879 It was only
$4,000 to $4,000 per failure, and did not reach
$4,000 in the entire year 1880. Without at
tachng to the figures weight as IN exact meas
ure of outstanding liabilities. there Is plainly
indicated an enormous decrease Of such indebt
edness. apparently exceeding a third of the
amount outstanding prior TO 1879. Nor Is this
contrary to reason The liquidation Of indebt
cduess in all directions speedily placed sound
firms In command Of comparatively large sums
so that they were able for considerable time
10 transact larger business than before, with
less borrowing or without any. For the time II
was an addition Of several thousand millions &c
the active and Immediately available capital OF
the trading and manufacturing classes. much
Of which went into expansion Of business, much
into the bank deposits that increased from 5000,
100000 on April 1. 1879, to over s1006000y0OC
by the end of 1880, and much into stocks and
bonds purchased as a paying investment fol
the money until It again became needed in bust
ness Everybody acquainted with those times
win remember how the offices Of bankers and
brokers were filed daily with merchants and
manufacturers seeking such Indebtedness
Once more an enormous addition to the avail