The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-05-09
NO NEED FOR APPREHENSION

certain amount of uneasiness in none
tary and business circles. We must ad-
nit the fact that in many cases the phe-
nomenal rise in stocks is speculative-the
new values are purely fictitious. That
a reaction viii come, and come SOON
every one admits also. The vital ques-
ton in which the general public is con-
cerned is, will that reaction have a ma
terial effect on the general business of
the country?
We think not. While many individuals
will lose and others will gain, the losses
and the gains win be mostly within a
comparatively small circle of stock
gamblers. The great fnanciers who have
organized the Industrial combinations will
not be affected by the rise or fall of the
stock market. In many cases there has
been overcapitalization. but the evil re-
suits flowing from such acts will not be
felt for some time to come-not until the
time appears for dividends.
Comparing the condition of the country
today with it's condition Immediately pre-
ceding other financial and industrial
crises. we find complete absence Of
those forerunners of American panlcs
A well defined cycle of twenty years
marks the periods of depression and
speculation in the progress of the United
States. These periods have been modified
somewhat by unusual circumstances but
the general average has been maintained.
Ten years of prosperity have been fol-
lowed by ten years of depression. 1t is
the old story of the seven years Of
Egyptian plenty followed by seven years
of famine
The first financial and Industrial crash
within the memory Of men now living,
occurred in 1857, the next came in 1873
and the last in 1892. In each and every
case the cause was the same; overpro-
ductlon accompanied by Misrepresentation.
The Civil war, following so closely upon
the heels of the crash of 81, revived the
country before it had served its sentence
of ten years of liquidation, and the period
between 81 and % was therefore shorten
ed The stimulus which always attends
a period of war was reinforced by
high war tariff, designed to encourage
home production. These combined, fore
ed the producing power of the country
to its utmost. Speculation ran riot in
the West-not a gambling speculation
on intangible securitles-but speculation
along the line of legitimate development.
The only trouble lay in the dlscounting
of the future. The country was ten years
ahead Of its time The crash came with
the failure of Jay Cook & Co, and it
was universal. 1t took ten years to adj
just and utilize the ambitious projects
of this speculative period. BY 1888, the
country was sailing on smooth
sea under a fair and steady
breeze, but the time had
arrived for another boc1n-the specula-
tive spirit Of the people was awakening.
1t began in 1885 with the city building
and manufacturing craze. Every hamlet
had ambitions to become a city Tho
protective idea was abroad in the land.
side of the wheat and corn fields, that
the tariff of transportation might be
avoided. The money of this country
and all that could be borrowed was
placed in costly city improvements and
in tariff fostered industries. BY 1890 there
We're evidences of overproduction with
no foreign market to absorb the surplus.
Values began to decline; the millionaire
became a bankrupt by the simple pro-
cess of the shrinkage of property values,
while the size Of obligations was COM
paratively doubled. The end came in
1892 with the Barring failure. 1t was a
world failure this time, but whatever
was the cause in the old world, the cause
here was apparent to the most casual
observer
Such is the history of our great pam
ics. None of the conditions attending
them exist now. The speculations that
are attracting the attention of the
world are confined to a comparatively
few-they do not reach the rank and
file of the business community. A new
element has been introduced into the
problem which will prevent the evil of
overproduction-the rock on which the
industrial ship has heretofore split. The
trusts have the question of production
under complete control Their overplus
viii be unloaded on the foreign market
to save prices and keep the wheels NOV
ing at home. This is one of the strong
features of the situation There is IT.
tie or no speculation in the great field
of real estate-there are no new indus
tries being erected. The trend Of emf
grafton is to the farm Instead of to the
cities, and men are employed with every
prospect of being so for an indefinite Pc
riod. The railroad combinations by re-
ducing expenses viii in the end reduce
freight rates. The overcapitalization
of industries and the wild gambling in
imaginary properties are the only dis
qGieting features. of the situation. This
is 20 he dcpiored, bat it is no cause for