The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1900-07-18
ANALYSIS OF FAILURES,

Dun's summary of business failures for
the first half of 1900 contains several
points of instructive interest in relation
to the Industrial situation. At first
glance the showing appears alarming, the
aggregate of failures having increased by
more than 100 per cent over those of the
same period last year, but when the sub
ject is thoroughly considered surprise
gives way to a satisfied understanding Of
cause and effect.
Dun Is rather cautious in discussing the
situation. The commercial agency sees
no cause for alarm now, although it Is
plain that there was a period In the re-
cent past which caused more or less
worry. There is a volume of information
in the remark that in the failures report
ed to date "are seen substantially all the
commercial disasters resulting from an
amazing rise in prices last year, followed
by weary but largely successful efforts
during the past few months to get back
to a normal state Of business" Cause
for satisfaction is found in the fact that
business has been on the whole SO
soundly conducted under conditions Of
unusual danger"
This means, rather, that it is fortunate
disasters have not been worse. When the
craze for Industrial combination set In
several months ago the G o warned
THE banks that they were treading on
dangerous ground by assisting in the
financing of the concerns. How much
that warning was worth is revealed in
the banking failures for the six months
of 1900. the majority of which occurred
during the past three months, aggregat-
ing $25, 1922, 100, as against a total of only
1851, 728 for the corresponding period in
1899. The trust craze made the "condi-
lions Of unusual danger" mentioned by
Dun. Stocks were watered to the burst
ing point and prices inflated In order to
bring profit on fictitious values. Sound
f1nanciers who went into this sort of en-
terprise no doubt expected to stand from
under and realize something before the
tide set in the other way, but it became
apparent ninety days ago that 1t would
take the most skillful and conservative
management to avoid disastrous loss
through the i'll advised venture. The
we'll informed are aware that the process
of recovery and protection has been going
on for some time. and that the banks
were, in spite of these efforts, obliged in
the end to submit to q loss of more
than $25, 900 O0O emphasizes the dangerous
situation they were in.
1t cannot be said that failures Of this
character are at an end. but it can be
hoped that the worst has passed. 1t Is
certain that business generally IS on
sounder basis than has been the case at
any time within a year. The lesson
taught by this industrial ''fyer' win
prove salutary for some time to
come, but how long it will enforce the
best and wisest conservatism cannot be
predicted. There have been innumerable
lessons Of the sort taught in the past,
yet they have been forgotten or dtsre-
garded in the prospect of great or I'M
usual gain. 1t Is probable, however, that
IL another dangerous situation occurs in
the industrial situation it will have to be
caused by something different from the
trust enterprises. The latter have burnt
tho child