Omaha daily bee., 1899-10-06
PREVAILING PROSPERITY.
Pertinent suggestions on Merns Of
prolonginR Good Times.
Engineering News.

Engineering News.
The tendency Of the public in financial
matters is always ITO go with the crowd,
The comparison of the business community
to flock Of sheep Is an old one. Every
man Is strongly prone to do what he sees
his neighbor doing. This is why IN times
OF great prosperity men incur obligations
and enter upon speculaions with apparent
rcsklessness who in times OF financial dis.
aster would turn a deaf ear even to me1i.
torious propositions for investment
We are now in such season OF business
expansion as has not been seen in a long
time Speculation OF all sorts is rife. Com.
panies are being noated with millions ct
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 proper
ties as evidence of their solid foundation
Manufacturing enterprises are expanding
Concerns which only a 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
fnancers refuse further 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 cf prosperity fall in ruins.
What can be done to postpone this evil
day and to diminish its shock and inten-
sity when it does come? The almost self
evident answer Is that anything at the
present time which tends TO check the
swelling tide of demand. the forcing up
ward of prices, and the increasing ten
dency toward debt incurrlng and specula-
ton on a gigantic scale, will operate to
prolong prosperity. Let us illustrate by
concrete example. Here is, let us say,
city which proposes to spend ten million
dollars on certain public improvements.
These have been long time in contempla-
ton; but during the hard times the
taxpayers have been inclined to oppose
such large expenditures. Now, under the
general stimulus OF prosperity, however,
1t is proposed to undertake the work,
The money is raised on 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 a 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 nor
NAL level The taxpayers would then get
a much larger return for their money ex-
pended. The volume OF demand would
ccme at time when 1t might be most
welcome to fill the order sheets of mills
which were nearing a shutdown and la
Dor would be employed which would other
wise be idle.
Is it not 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 slim
ulate 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
over that the course which is thus indi
Gated is really a sound financial policy. To
go as the crowd goes is contrary to good
business principles as it is to the larger
financial interests of the nation. Whoever
at the present time erects building,
equips manufactory, conducts system OF
water supply, or does almost any piece Of
work which can be classed as a permanent
investment. will receive a smaller return
for given expenditure than at any time
for many years. Now is the time when all
purchases and investments should be re-
stricted to the lowest possible point Now
Is the worst possible time to engage in
large investments and speculations, not
withstanding the fact that every one is doing
1t. 1t Is the best possible time to pay debts
and not to incur them.