The record-union., 1899-11-10

conditions existed, no such results
could have followed the Government
expenditure as were actually expert
enced.
1t should not be overlooked, further
more, that in so far as our present
prosperity is based on extraordinary
expenditures by the Government, 1t
has an unstable foundation. The ma
ton is like a man who borrows a sun
Of money! Wfff1e it lasts he may live
sumptuous1y and call himself prosper
Gus; but by and by al day of reckoninG
comes when the debt must be- PAID
Creating national prosperity by ln7
creasing public debts has been tried
many and many a time by other ma
| lions, as well as our own. It always
works; but financial disaster inevitably
follows. The fact that we have In
creased the national debt by over $4OO,
O00.O00 since 1891 is not a good omen
for future national prosperity.
The tendency Of the public in finan-
cial matters is always Ito go with the
crowd. The comparison Of the bust
ness community to flock of sheep is
an old one. Every man is strongly
prone to do what he sees his neigh
Dor doing. This is why in times OF
great prosperity men incur obligations
and enter upon speculations with APP
parent recklessness, who in times of
financial disaster would turn a deaf ear
even to meritorious propositions for in
vestment.
We are now in the midst of such a
season of business expansion as has not
been seen in a long time. Speculation
of all sorts is rife. Companies are be-
ing foated with millions of dollars of
paper capital, and with little save great
expectations to show for it. Some of
these concerns have bought up some of
the abandoned and obsolete factories
which failed to survive the competition
of 1896 and 1897, and parade list of
such properties as evidences Of their
solid foundation. Manufacturing en-
terprises are expanding. Concerns
which only very short time ago were
at their wits end to obtain orders
enough to keep them from shutting
down, are making large investments to
increase their capacity. All these things
tend to swell the volume of apparent
demand, and to force prices higher and
higher until finally the bubble will
burst. Banks and f1nanciers refuse fur
Their loans; purchasers cancel orders,
mills can find no market for their
goods. and are shut down; operatives
are thrown out of employment and
their purchases decrease. Thus does
our fair castle of prosperity fall in
ruins.
What can be done to postpone this
evil day, and to diminish it's shock and
its intensity when it does some? The
almost self-evident answer is that any
thing at the present time which tends
to check the swelling tide of demand,
the forcing upward Of prices, and the
increasing; tendency toward debt-in-
curing and speculation on a gigantic
scale, will operate to pro1ong prosper
| ity. Let US, illustrate by concrete ex-
ample. Here is, let us say, a city
which proposes to spend ten million
dollars on certain public improvements.
These have been a longf time in con-
| templation; but during the hard times
| the taxpayers have been inclined to
oppose such large expenditures. Now,
| under the general stimulus of pros
perity, however, it is proposed to I'M
| dertake the work. The money is
raised by the sale of city bonds, and
| this volume of demand is added to that
which is at the present time operating
to raise prices of materials and Of
| labor to still higher point. Next,
suppose that instead of this course the
| opposite one were taken, and the work
were postponed until future day,
when prices have fallen to a more
nearly normal level The taxpayers
would then get much larger return
for their money expended. The vol
ume of demand would come at time
when it might be most welcome to fill
the order sheets of mills which were
nearing a shut down, and labor would
be employed which would otherwise be
idle.
Is it not a fact that our seasons of
financial prosperity and adversely are
really due to fluctuations in the tide of
demand? Do we not need as much
to check it in times of prosperity as
to stimulate it in times of adversely !?
Must we not, in fact, do the one In
order to do the other?
We wish to emphasize the fact, more
dicated is really a sound financial
policy. To go as the crowd goes is
as contrary to good business principles
as 1t is to the larger financial interests
of the nation.,s Whoever at the present
time erects building, equips man
ufactory, constructs a system of water
supply does almost any piece of work
which can be classed as a permanent
investment will receive a smaller re-
| turn for a given expenditure than at
any time for many years. Now is the
time when all purchases and invest
ments should be restricted to the low
est possible point. Now is the worst
possible time to engage in large in
vestments and speculations, notwith
standing the fact that every one is do
ing it. 1t is the best possible time to
pay debts and not to incur them.
| In the hard times Of 1894 a great
number of cities throughout the coun-
try embarked in public works on a
large scale, partly to give a means of
support to the army of unemployed,
and partly to take advantage of the
| low prices. This was not only wise
method of giving charity, but it was
sound financiering. To give it full eff