The Leon reporter. (Leon, Iowa) 1887-1930, 1902-02-20
CAUSE OF THE TRADE REVIVAL.

CAUSE OF THE TRADE REVIVAL.
In an article on the contention of the
London times that the tide of prosper
ity in the United States is about to
turn, the American banker, which es-.
chews partisan politics and restricts it.
self to discussion, always able, of bank
ing interests, unconsciously denies the
privilege that the revival of trade and
production in 1897 after the depression
extending back to 1893 was due to con-
fdenee inspired by McKinley's election,
that the gold standard would not be de.
throned, and to the enactment Of the
Dingley bill. Adverting to the revival
and to what may produce another de.
preston the Banker says:
"We know that our prosperous con-
ditions had their sources in the profits
made on agricultural products for sew.
eral years after 1895. Increased con-
sumption due to this impaired an inn
pulse to our industrial affairs which is
not yet exhausted. People who were
out of work and deeply in debt went
back to their jobs and squared them
selves. The consumptive power of the
country widened and deepened. Prices
rose under the pressure for increased
food and commodities. The low prices
of our manufactures stimulated foreign
buying. The recent high prices appear
to have checked it. Imports are now
increasing while exports tend to di-
minish. Prices in Europe have been
going down for year, while here they
have been rising, since the spring of
last year. AS the cost of living in
creases effective consumption will tend
to decline. unless wages rise with prices,
which is not the case universally.
Little economies In household expendi.
ture accompany periods of rising prices.
Step by step the industrial pace
slackens. Then prices recede. Pro-
ducers work for broader markets by
more economical production. If they
fail in this the crisis comes, in which it
Eappears that excessively more has been
produced than can be disposed OF profit.
ably. A condition ofthings in which
all that is produced finds profitable
market is an economical idea realized
perhaps in part in such times as we
have recently experienced. But the
! . ort,o %< 81, ~L
goods invites speculate production and
an excess that may be rectifed only by
bankruptcy"
This correctly sets forth the true
cause of the revival in 1897. The
change really began in 1896, when by
reason of failed crops abroad and
abundant crops here an extraordinary
|exporr demand arose and American
cereals advanced in price. Another
Iforeign.crop failure followed the next
lyear, sending the price of American
breadstufts still higher, and the result
ant returns 70 tae domestic agricultural
Industry. were SO great as vastly to in
1 lCt6dS6 tuc utuldUu lOI IudJlultCt VI CIV
goods and stimulate all industry. The
American, however, does not wholly
account for the maintenance Of the
revival. This is attributed to the steady
increase in the quantity and the activi
ty of circulation of money. Railway!
cannot meet the demands of expanding
traffic Without. providing additiona
cars Unless these are provided it il
impossible for their traffi: to grow. 1
new money had not constantly beer
added to the stock on hand, and wa
had not quicKened the circulation, the
extraordinary expansion of business
since 1897 would not have been witness
ed. What unprecedented foreign pur
chase Of American grain started, in
crease Of the volume Of money enlarged
and carried forward. With the indus
trial depression and fall of prices abroa,
another reaction is threatened. Its t,
be hoped the disaster will be avarted
and 10 be feared that it will not. What
ever the future may develope, however
it ia certain certain that the Banker ha
told more truth about The revival ii
1897 than will be found in any republi
can publication.