Virginian-pilot. (Norfolk, Va.) 1898-1911, 1900-06-01
TWELVE PAGES.
FRIDAY. JUNE 1. 1900.
THE REACTION BEGINS.

According to the experience OF the
commercial world, the industrial re-
vival of the past few years should not
have reached its elimination for sew
eral years yet, but the trade journals
and sta.tisticians show that pros
pe.r.ity" has already reached its high
water mark and the reaction has be-
gun. Without assuming the role of
prophet of evil 1t is worth while to
run over what are the business proba-
bilitiets of the near future.
In the first place. the revival of bust
ness has not been entirely normal. AS
q reaction from three years of unpre-
cedented depression, it was both ma
tural and inevitable. In certain phases,
particularly the point to which prices
have advanced. it has been abnormal
and has given rise to conditions which
may we'll make the conservative busi-
ness man pause and reflect.
Briefly stated. the history of the past
few years of business has been ad-
vancing prices which have stimulated
industrial combinations until nearly
every line of productive industry is
controlled by some combination. These
combinations have in turn put up prices
artificlally. in order to realize dividends
on enormous quantities of watered
stock. Production, as les always the
case, has become feverishly active I'M
der the stimulus of high prices, until
the point has been reached where sup
ply exceeds demand, and surplus stocks
are accommodating. Such is the business
Situation at the present
From such n situation what may be
expected to follow? a reaction in prices
had to come, of course. Some manu-
facturers have cut prices in order to
stimulate buying and move surplus
stocks. Others are cutting down pro-
duction, and in order to do so close
plants and throw employees out OF
work. When the business combinations
were being formed. large numbers were
thrown out of employment, and the op-
portunities to secure work arc pretty
well prc-empted by these. Working
men will, therefore. be idle, with the re-
suit that the volume of home consump
ton will be cut down, tending in
measure TO perpctua;e a glutted mar
ket.
Business failures will. of course. be
inevitable. The Industrial combina-
tions. already the objects OF more or
less suspicion in the business world.
will be unable to pay dividends on their
absurd over-capitallzation. Slumps in
their stocks will follow because stock
holders who bought in the expectation
OF realizing immense profits Will be
anxious to sell when the profits are MOI
Forthcoming. 10 compllcat, this eitua-
tion the combinations are objects of
popular detestation and are the no
tenItial victims OF legislation that Mill
be promised by both political parties
The purchaser of stock who listened TO
the siren song of the promoter will have
ample time to reflect, and his reflection
VIII not put him in a happy frame of
mind or improve the business situation
The rise OF business has been largely
abnormai; the present conditions are.
in measure. anomalous; the decline
may be rapid and unprecedented. This
is q possibility and a probability that
the conservative business man can not
Afford to ignore. a severe panic before
the present summer is gone would be
n natural and logical result of the
present situation. a panic in the
money centres. especially under the
present currency system and gold basis.