Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1901-09-07
and nnerneotedly como a crash and a

( and Unexpectedly come a crash and
| crisis, and there you are again.
What precedes is a rough and READY
summary of the theory OF commercial
crises. Let us now look at the practice
at actualities, and see whether. II test
ed on the touchstone Of theory, our
present position justifies the fear that
we are on the brink of another financial
crisis. We shall go back to the Barring
crisis, because that is not only con-
venient but also scientific starting
point And il may not be amlss TO re-
mind the reader Of It that the collapse
of Baring's was not the cause OF the
crisis of 1890, but merely one oil the
symptoms, or, rather, of the conse-
quences.
UPON THE Barring CRASH.
After the fall of the great mouse
there came all over the world perloo
OF intense stagnatlon. First there was
a tremendous strain even upon sOlVehs
houses. Then came the recognition Oh
the fact that the pace had been set 700
fast In all directions, ana IN every
sphere OF commercial and financial ac-
tiyity. Finally there was the desire TO
improve individual positions by lqulda-
tlon of doubtful and undesirable assets
Stocks were sold. capital was WITH
drawn from abroad, and, for the time
being, the supply OF funds to forelsn
borrowers ceased. The manufacturing
Industries and the retail trades began
70 stagnate. and raw materials fel III
price. Money" became cheap, there
being net only vast accumulation OF
funds, hut also an abnormally small
demand for them, Everybody VIII re-
member the state Of affairs prevailing
In the money market from about 1871
until 1894 The bank rate STOOD for
years together as low as per cent,
which had never happened before
Call money could be had very often for
less than per cent per annum, hrst
rate bills were discounted for pit
lance, and the banks could hardly find
profitable employment for their loan
able funds. The inability to find pro-
ftable employment for capital created
keen competition for high-class invest
ments. and sent these 10 famine prices.
But even this symptom, however salts
factory for owners Of gilt-edged secur-
tiles Il may look at first blush, was
very unsatisfactory. for the rise In
prices was only the Interpretation OF
an unwelcome fact. That fact was de-
cline In the yield of capital. After all
investment Is matter OF yield rath-
or THAI matter Of quotation.
The longer the stagnation In the
money insrket lasted the more impa-
tent people Grew, and as the memory
Of the dark days OF November, 1890
dimmed the grumbling at the low rates
obtainable for money became more in
tense. The ranks OF those who had
money left from before the crisis and
who guarded II now with exaggerated
timidity, were swelled by the very large
class OF people, so numerous In this
country who are constantly rising up
from financial nothingness into COM
paratlve wealth. Cynics call them a
fresh crop OF fools which ripens about
every ten years; and In truth they are
people who make their money by hard
and patient toll in retail businesses and
small Industries, and lose II with ease
and rapidly In the attempt to multiply
slender means into large fortunes.
BUBBLES IN '94
About the year 1894 people Of both
classes we've tempted into great var
iety Of speculative investment stocks
The Katiir boom intoxicated the petty
gambler; and the limited liability craze