The age-herald., 1900-07-30
Causes of Denression

N-st< iA NAhYis ol PeiihahehI
 Causes of Depression
 Many people ip America have attri- buted industrial depressions in the past to presidential elections The intervals be- tween industrial Impressions have been four, eight, eleven, ten, ten, ten, six and nine years, as against four-year intervals between elections. Three times depressions have come one year after elections, twice they have come one year before, and four times they have come half way between. The only noticeable fact revealed by the diagram is that they have never come on the same year, although there is no logical reason why they should not
 Another alleged cause of industrial de- pression is large transfers of money from one country to another These are simple exchanges of value Each party voluntarily parts with value to secure something considered of more value. Such exchanges help business. They are business-they do not cause depression. The largest transfer Of money in modern times was the payment of the war indemnity by France to Ger many in 1871 to 1873, and this was without any return of value. If such things brought industrial depression, then France should have been the first to suffer, where as the depression of 1873 came to Germany several months before it appeared in France. This result was perfectly logical. The $500, 100000 francs poured into Ger many stimulated her industries to a won derful degree.
 Industrial Boom
 "The building of factories and other permanent improvements was unprece- dented, the price of iron advanced enor- mously, followed by that of all other build ing material. This abnormal advance stopped these improvements, threw large armies of workers out of employment, and industrial depression followed. The war indemnity haStened and intensified the great advance in prices in Germany, hence she was first to experience the logical result
 '"The large exportation of gold and large importation of goods has often been held responsible for industrial depressons in the United States If this were ever the cause, there would have been unusual prosperity in Great Britain and the con tinental countries which reaped the benefit of American extravaganza, but such has never been the case. Those countries suf- fered depressions when the United States did.
 Tn seeking the cause of industrial de- pressions, therefore, we may clear the field of large amount of rubbish by sum- marily dismissing from the investigation as untenable( all alleged causes which are purely local in national sense, such as presidential elections, changes in tariff, demonetiZation of silver, national banking system, etc.
 Common Cau.e
 we must look for the real cause in some condition which was common to the five nations and which did not exist in the other nations, or in something which took place in the five nations contemporaneous- ly and did not take place in the other na- tions. We must find, also, some cause which placed the five nations in the order they occupied as to relative severity of in duet .i al dnVArn Ccin cause which grouped little Belgium with the larger nations, Great Britain, United States, Germany and France, while Rus sia, Austria, Italy and Spain were grouped with the smaller nations.
 MT Hull gives table showing the iron production of the leading industrial coun- tries in 1882 and 1Ss6 periods covered by various government investigations. The production in those years was as follows:
 1882 1886.
 Tons. Tons. Great Britain..... .... ....S,5S66S0 7,OO9 15i United States. ..... ..4,623323 5,6S3329 Germany and Luxemburg. 3,3SOS SO5 3,52S 6oi France..... ...... ........ ..2,O390oi l'5looI1 Raleiun 726 946 701 GIT
 Uninterrupted Prosperity
 "Before iron became of preponderating i'm portance to the industries of nations, tnefe were no industrial depreSsons except those born of causes apparent at the tune, SUCH D6StlIence, IdUllne, anu wal. iiS N"it dition of industries in the United states up to 1874 was one of uninterrupted pros perity France and Great Britain, Whlch then furnished the worlds iron supply, eX- perienced two seasons of 1ndustrlal de- pression during this period. The ohteo States was the next country to produce sufficient iron to give it importance in the economies of the nation. Later on Ger many and Belgium became large pro ducers. and just in this order they com menced to experience industrial depres- sions. tion on which the modern industrial sys- tenn rests If that system is disturbed, IL is most natural to look to the 1ounuauoh for the cause of the disturbance. 1T one would appreciate how thoroughly the en- tire industrial system depends upon lron' let him imagine what the world would be today without it-what it would De II we depended upon wood stone, copper, anu tin for our implements of agriculture, toois' machinery, vehicles of transportatlon on land and sea, the vast network or raiis oli the surface, and the pipes which carry water gas etc., under the surface. what proportion of these could have existed without it? It matters little what us price is, provided that price is stable. me Al- dustries of a nation depend upon tne ac- lions of an aggregation of individuals. When the individual considers an expendl- ture for a permanent improvement, ana finds that improvement will cost 30 per cent to 100 per cent more than it would have done a year before, or is likely to do year later, he acts, and that action IS almost invariably postponement ot that improvement .'This. in a nutshell, is the reason that industrial depressions follow an abnormal advance.
 "Iron is a powerful instrument for good when under control and just as powerful an instrument for harm when not under control. It is not under control when 1t advances in price 80 to 100 per cent above its normal cost.
 Periods of Abnormal Advances
 "A careful review of authoritative pub iications upon the subject reveals the fact that the conditions of each of these seven periods of abnormal advantage in iron were identical in their train of events, and the advance of 1899 is no exception to the