New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-01-07
PROSPERITY, PERIODICITY AND REACTION

Probably few who read the glowing accounts
of the condition of business and industries at
the opening of the new year We're able entirely
TO escape an impression that it might be too
good TO last. Reaction usually follows ex-
traordinary advances for philosophical reason,
in other matters as in stock speculation, because
they produce In conservative minds hesitation
in place of absolute confidence. When only
part of the progressive and investing force be-
gins to hold back, its progress is necessarily re-
tarded, at least for time. But just at this
point it is essential TO distinguish between a re-
tarded rate of progress and disaster. Putting
aside the sudden and violent reactions in spec
ulatiOn which are often manufactured only for
the purpose of enabling those who are out to get
in, there natural laws which prevent lmme
date and sudden disaster after period of great
improvement unless it is caused by external
changes as complete as the reversal Of the
tional policy in 1893 Part of the business
world even then believed that the changed
conditions would have only limited tenn
porary effect, so that the worst results of the
collapse in 1893 were not felt until 1896 1897.
Where reaction comes without such exterior
cause it always comes gradually, with slow
decay of confidence and exhaustion Of the forces
which produced the great advance.
Since business tides depend on human nature,
there is some philosophy in the calculation that
approximate periodcity may be expected in the
ebb and the flow of affairs Confidence starts
up, whatever the cause. It grows for some
years until it has enlisted all the progressive
forces of society. Then 1t necessarily becomes
less rapid; but progress does not cease at once,
because the works and improvements begun at
the point of highest investing confidence do not
reach completion and begin production for a
4I,o Of
chasing power following the full employment
of workers does not cease at once when over
taken by growth of production, and so prices
do not suddenly fall from the highest point, but
there is first a time of slow recession, usually
appearing in only a part of the products, which
gains strength and includes more of them as
the new tendency becomes generally realized.
These workings of human nature, except in
the presence of great external changes of con-
dition. render the latter part of an advance
slower and more hestating than before and the
beginning of reaction gradual, usually extending
through several years. The downward turn
may be distinctly traced even in the faint COM
mercial records of early years, for some time
before the panic of 1887 or that of 1851, and 1t
was so clearly marked that there could be no
doubt about it from the early spring OF 1872 to
the beginning of November 1873 SO the recov-
May, 1879 then rapid for nearly two years, and
afterward gradual for another year, until the
spring of 1882, after which gradual reaction can
be clearly traced until the panic came in May,
1884 The panic of 1893 was clearly due to abb
normal forces because it was not preceded by
wear or two of increasing hesitancy and gradual
decline after the highest prosperity had been
reached in 1892, and for similar political reasons
the recovery did not begin in full force until the
restoration of the National policy was definitely
reached in the summer Of 1897.
There have now been nearly two years and
half of advance slow until the spring Of 1898,
and checked then by the Spanish War until the
fall. but wonderfully rapid through the rest of
that year and the whole year 1899. 1t is not
in accord with experience to expect the culmina-
ton of the upward movement until after
period of retarded progress, nor is it in accord
with the conclusions warranted by study of the
underlying causes in human nature. Only the
beginnings of doubt appear first and have in
fuence with few while the general progress
still continues. Nor would it be in accord with
experience or the teachings of philosophy to ex-
pect sudden action after the eliminating point
had been reached. A year or two Of hesitancy
and slow decline would be needed under Ordi-
nary circumstances TO work out the gradual ex-
cess of production over consumption the decline
of employment and of consuming power and
the decay of hope and of enterprise which are
ordinarily required to prepare for disaster. Elk
ternal events, not normally belonging to the
commercial or industrial field, might bring re-
verse at one time as well as at any other. But
without such interpositon a year or two more
of business never surpassed in volume nor In
profits might now be expected. with warrant in
past experience.