New-York tribune., 1902-02-08
THE GERMAN CRISIS.
,roRFIGN COMMERCE AN ANCHOR TO
wrNDWARD IN TIMES OF FINAN-
CIAL STORM AND STRESS-THE
INFLUENCE OF TRADE
COMBINATIONS.
Berlin, January 25.


anarcial crisis through which Germany has
+een passing has been the steadiness of foreign
,rode II q general collapse of credit and busi-
n4ss has been averted during the last six
,,ontbs. it has been mainly through the saving
,;t,As Of a well organized foreign commerce.
-4,t.t ell Tho business interests of the home mar
,,a+ 5isordered by excessive expansion and finan-
til 5anression the Fatherland has been living
t,or, hand to mouth upon its foreign trade This
.. significant fact which Americans ought not
.o overlook German experience proves that in
: neriod OF storm and stress, when the founda-
,ions Of public confidence are shaken, foreign
cononoerce is a safeguard and source of strength
= ie 2 warning to Americans to have the same
orcbor in readiness TO windward whenever a.
.,r,iIsr emergency arises through undue expan-
~, of domestic trade. The moral is so well
,,,derstood in Germany that it is doubtful IL
opv political combination can be effected for
sac,,-ing the enactment of the proposed tariff
ZrbAn foreign trade has been almost the only
rssonrce IN a prolonged monetary and indus
trial crisis the factions in the Reichstag are
,a1uctant to take the risks of reducing the vol
,,,oA of commercial exchanges by raising the
duties on imported agricultural produce and i'm
perilling reciprocity conventions.
7bA avnerience Of Germany during recent
-,oors e frsugtt with instruction for American
leaders and cannot be studied too closely. In
1870 otter futile dalliance with free trade, the
,,ro+ectiye system was adopted, and there has
baan no reversal of it The currency question
1ad been settled q few years before by compre-
,,si,e measures Of financial reform, and there
bas heen nc disturbance of industrial conditions
from that source Reciprocity conventions were
also NEGOTIATED wherever II was practicable to
do so and these were allowed to minister with
out interruption to the industrial development
and economic prosperity of the Fatherland. The
general result of the continuous operation of
the policies Of protection. financial reform and
reciprocity was the conversion Of an impover-
isred country into prosperous industrial en-
pire Emigration was checked; industries
diversified; the range Of employment was wild
ened: the efficiency of labor was increased by
teehnical education habits of military discipline
contracted in the arrnv induced subordination
among workmen: three great systems of compul-
Fo-v insurance tended to convince working peo-
lie that the State was deeply interested in their
daily life, and an enormous expansion of the
export trade was brought about by commercial
training and enterprise. Seven years ago, when
American industry was paralyzed by the abrupt
reversal Of tariff. monetary and reciprocity poll
cies Germany was at the height of prosperity
and pulsating with renewed energy. Every fac
tory was running on full time with a cloud of
smoke from the tall chimneys; new foundries
and mills in process of construction in
every industrial centre; building operations were
in progress OF large scale in every important
rown and the mercantile and shipping interests
had received a tremendous impulse from the de-
Velopment Of foreign commerce. Seven years
have passed. and America has witnessed. with
The settlement OF its disordered finance and with
he NJ
marvellous revival of prosperity. while Ger
many for eighteen months has been under a
black cloud of depression and dependency.
The causes Of reversal Of industrial fortune
IN Germany are not analogous to those which
brought about the hard times in the United
States during the second Cleveland administra-
ii0a. Prolonged uncertainty. Industrial stag
nation and lack of confidence have not been pro-
duced by the reversal Of settled national pol
ices The best American analogy for the pres
ent period of German depression is to be found
IN the panic of 1857, when a collapse of con-
hdence was caused by excessive expansion of
domestic trade without reserves of capital and
organization required for financing it. When
The storm signal was raised at Leipsic there
had been a prolonged period of immoderate and
unrestrained activity. with new factories in the
smallest villages, improvements of electrical
and mechanical plants beyond the requirements
OF the near future, the rebuilding Of cities on
an Unprecedented scale, and the financing by the
banks Of q great number of speculative as well
as sound enterprises. There was a sudden re-
Fulsion Of feeling from buoyant credulity to
hopeless depression. The bankers had gone into |
everything, and could neither draw out their in
Festments nor supply increased masses of cap
'tai for the emergency. Cold water was re-
CURED after everybody had been drinking
nant. and a general collapse of credit and in
oustry was apprehended. Week after week, |
month after month, the worst was feared, and |
while anything like a financial panic was |
sVerted by the prudence and conservatism Of |
capitalists and manufacturers, the inertia Of |
commercial depression could not be overcome. |
II has only been within few weeks that there |
nave been signs Of a revival of national con- |
hoence. One great fnancier after another can |
now be quoted saying that the worst is over |
ana that business is beginning to mend. The |
iact that a large national loan has been sub |
scribed for this week ten times over is a prac- |
ucal demonstration that there is a vast reserve |
OF national wealth. The success of the loan, un- |
less all signs fail, will open the way for an in |
oustrial revival
The experience of Germany proves that pro-
eFessve nation. without abandoning or revers-
ing It's tariff, reciprocity and monetary policies
may bring about industrial paralysis by sheer |
3cess Of energy and enterprise; and. moreover,
aai When something akin 10 nervous exhaus-
loh has been induced by unrestrained produc-
u0h and speculative activity. a well organized |
.Drsgn trade is tonic by which the restora-
A uoA OF normal activities may be promoted |
nov that the official statistics of a year of un-
sampled depression have been compiled, the |
1ath is revealed that foreign commerce, instead |
ANY has been sinking more deeply has been |