The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1900-08-14
MINISTERIAL DFpRESSIONS,

The decline in the prices Of iron and
steel and the prevalent dulness in the
demand for other staples lend peculiar
interest to an article in "The Engineer
ing Magazine" for August by George
H. Hull. The writer argues with con-
siderable force that industrial depres
sions are not due, as has been some
times supposed, to presidential cam
paigns transfers of money from one
country to another or to other causes
which can be regarded as local. The
fact that these mysterious and lamenta-
BILE situations often occur in more than
one country at the same time strongly
suggests that the source of the evil is
general in it's nature.
Mr.. Hull thinks that he has found
the true explanation In those abnormal
rises that have occurred in the price of
pig iron which are popularity known as
"booms." He presents table of quo
tations from 1925 to 1882, from which it
appears that minimum prices have sew
Ell times been followed within a year
or two by maxIma representing an in
crease of from "a to 1873 per cent, and
| that in from one to three years there
after period Of serious and prolonged
depression set in. During the sixteen
years ending with 1898 there was no
such advance, and though there Were
several short-lived financial panics Mr..
| Hull holds that there was no lasting de-
preston of industry. He evidently an
ticipates something of that sort in the
near future however, unless prompt
remedial measures are resorted to.
The intimacy Of the iron and steel
industries to other kinds of business is
without a parallel. This is an age of
iron. That metal is required by the
builder of railways bridges, ships and
modern office structures and shops. 1t
is needed by the maker of machine
tools, textile and agricultural nachin-
cry, many forms Of vehicle and sorts of
hardware. The consumption increases
much more rapidly than the popuiat ton,
and this change in ratio promises to
continue for years. But it is a singular
and highly exceptional fact that while
enough of other staples-lumber, stone,
brick, coal, cotton and wool, for IN
stance-to last for a year or two are
either in sight or are readily accessible
to the producer. there has not been
more than a twenty-three days supply
of pig iron ahead for more than ten
years Hence when business picks up
and a demand sets in the buyer of iron
becomes alarmed lest he fail altogether
to obtain what he wants. Thus more
rapid and abnormal advance takes
place in prices than is possible with
any other commodity. After the boom
begins the manufacturer runs on old
contracts for a time. OF course, he
gets orders at new prices, too But as
soon as there Is a conspicuous advance
a number of business enterprises come
to standstill, waiting for a reaction
And even a moderate concession fails
to restore confidence. Thus a variety of
industries begin to experience paraly-
sis. 1nasmuch as the temporarily i'm
proved demand has led the manufac-
turer of pig iron to enlarge his plant
and output the decline in prices leaves
him in bad predicament. These vio-
lent and wholly unnecessary fluctua-
tions in prices which we call boon1s,"
says Mr.. Hull, disturb all business,
but their greatest injury is to the pig
iron producer
The remedy which this writer offers
for the evil is much larger aceunu-
lation of iron than has ever before
been available This should be equal to
the production of several months, and
should not be confined to one country.
The reserve would act like the flywheel
of steamengine, substituting COMPARE
tive uniformity, in prices for wild va
riations And though the present pc
riod of depression really began months
ago, Mr.. Hull thinks that disastrous re-
suits in the near future might be
averted if steps were taken Immediate
~ 10 adopt his plan.-New York Trib-
une, August 10.