The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-11-23
THE GREAT BOOM OF THE
LAST FIVE YEARS OVER
People Begin to Stagger Under Conditions Caused
by Insane Greed and Unblushing Indifference
to the Public Veal.

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labor in recent years-and the people
have had a strain imposed upon them
which it will be impossible to stand up
under much longer That was probably
! the main cause of the coal strike. The
mine workers found that their income
was not going as far as it formerly did,
/ ard they were ircit ted by that fact to de-
mand better terms from their employers.
The mass of people throughout the
country are in a situation analogous
/ TO that of the coal miners: their money
! does not bring them in as many of the
! comforts of life as was the case few
! years ago, and they are trying to find
out why this is so. Many of them have
already begun to find out; consequently
We are hearing a good deal nowadays
about the probability of strikes, and
about the necessity of lower commodity
prices. The railroad employees, who are
very intelligent class of persons, are
muttering rather loudly over the fact
that their pay has not kept pace with the
rise in commodities; and if they have
become dissatisfied, why should not
others become equally SO? Prices cannot
go on advancing forever. limit
to the imitation must be reached
some time, and it looks as if that time
were now. But the imitation of the last
few years has been Of no ordinary sort;
it has been more than a normal in
crease, based on a large demand for
commodities for legitimate purposes; it
has been a feverish excited movement
of a super-heated imagination. Con-
sequently, when prices have reached their
top they will be subject, it is feared, to
very adverse conditions. 1t is not to
be expected that quotations will hold for
a considerable period at the maximum
level; that might be possible provided
they had reached that level by legitimate
means; but it is hardly possible in view
of the methods actually employed.
Therefore, there are sound priori rea-
sons for the belief that the boom of
the last five years is over. and that a
readjustment of values of every descrip-
ton to lower levels is inevitable.
DEPLETION OF LOANABLE CAPITAL.
There are other causes (beyond the
very general cause just mentionedD for
assuming that we have entered upon a
period of financial and industrial recess
sion. Among these additional causes is
this: you cannot keep up steam after
your fuel has given out. That is to
say, you cannot sustain prices at in
fated figures after you have used up
the available supply of loanable CAPT
tai. Just SO long as our financiers could
borrow large amounts from the banks
of this country, they could keep on
launching new speculative schemes; and
even when they had practically exhaust
ed the resources of the American banks,
they were able to continue their opera
tions on loans obtained abroad. There
is reason to believe, however, that they
have about come to the end of their
rope. Obviously the banks of the Uni
ted States are in no mood to extend
further assistance to speculative schemes
such as have characterized the last few
years. They may have to render an
unwilling assistance to some of the
schemes which have already been launch
ed; but that new projects can draw on
their resources for some time to come.
is not to be believed. They will do what
is absolutely necessary for them to do
in order to avert serious results to the
financial situation from the speculative
deals of the past, but it does not look
as if it would be in their power to do
very much. There is not much rea-
son to suppose that the European money
markets will render us further material
assistance. In fact, their attitude to-
ward us is likely TO be of the opposite
character. Our financiers have worked
the money markets of Europe very pow
erfully since the beginning of 1901, and
it is estimated that we must al present
owe Europe several hundred millions on
short bills. 1t is not likely that we shall
be able to expand this amount; on the
contrary, there is every likelihood that
we shall be asked to pay up without
much delay. There is reason to sup
pose that Europe wants to see her cash.
Her financiers have kept sharp eye
on our situation. and, if we may place
any reliance at all on their published
utterances. they are now disposed to
view our future with more or less con-
Germ. The cruK of the whole American
financial situation is here: how is it going
10 be possible to shift on to the should
ers OF the banks of this country the
great floating Indebtedness which our
trust and community of-interest pro-
moters have contracted in Europe? On
it's face, it looks like a very unmanage-
able problem 1t has been obvious for
number Of weeks that something dis
tressing was the matter with the fin
ancial situation in this country. Some
day it will be known what was happen
ing at this time; but it may not be until
enough years have elapsed to admit of
all the manifold factors which make up
the present situation being seen in their
proper perspective. We venture to pre-
dict that when the financial history of
the present time is written, it will be
found that the factor which so greatly
disturbed American finance in the fall
of 1902 was the repayment of a heavy
Indebtedness to Europe. 1t may be diff
ficult to discover traces of such a move
ment at this particular moment, but
possibly such traces are not entirely
lacking on close scrutiny. Tie heavy
sci ing which has characterized the
stock r,arkot this fall. and which has
had such a drastic effect upon Wall
street quotations, has been imputed, in
very large measure. to a wealthy, but
not highly respectable, coterie of specu-
lators. 1t is not assumed that the large
loans placed abroad during the last
year or two for American account were
negotiated by these people. The real
borrowers were of q higher caste-the