Evening journal., 1908-03-30
Peoples Column
HARD TIMES.
BUSINESS DEPRESSION
The Cause and the Cure.


t~-y~~--~oo~~~>-.-o~--~--,-.
Editor THE EVENING JOURNAL:
For the last few months we have
heard much talk of business depres-
sion, panic and hard times; we hear
men talk Of the financial strineencv.
the boarding of money stock gambling,
currency legislation and many other
things; but If you ask them the cause
lof the business depression they will
tell you they do not know, but this
we do know, that there is a depres-
sion in business and there is a cause
for 1t, and we should try to learn
what It Is so that we may avoid it in
the future.
What has put the brakes on the
wheels Of progress2 Some have said
1t was the boarding Of money. but that
Is like saying the clock is the cause of
time, the steam gauge the cause Of
steam or the thermometer the cause
lot hot or cold weather. Money is the
medium Of exchange, the representa-
tive Of wealth; It is not the cause but
simply registers the effects OF the
cause Of our business depression.
To get a clear understanding of the
cause OF the business depression you
must have a clear understanding Of
the factors of production, and then it
will be easy to see how the wealth is
distributed, for It IS the distribution Of
the wealth that determines whether
capital and labor will continue to pro-
lduce, for if there is not enough left
TO them to make the return for their
investment and labor profitable they
Icannot or will not continue to produce.
Thus we have our business depression.
So by tracing out the factors of pro
lduction, and then the way in which
II Is distributed we will be able to de-
termine the cause OF the depression Of
business, for il labor and capital do
not have wealth after they have pro-
lduced it, then someone must have il
who did not produce it.
Land, Labor and Capital are the
three factors of production Labor
applied 10 land produces wealth and
then we take the wealth which we have
produced and use it to aid in produc-
ing more wealth. This wealth which
we use to aid in production we call
capital.
The term land includes all things
which are natural, other than those of
human production; things which exist
without the aid Of human beings.
Labor includes all human exertion,
that is when it is applied in any way
/ to the production OF wealth.
| Capital includes all that portion Of
wealth which is used 20 aid in the
production Of more wealth. Now we
have clear understanding Of the
three factors Of production Thus we
may proceed to get a clear understand
ing Of the distribution.
Now as Land, Labor and Capital
are the three factors which produce
all wealth, then the distribution must
be among the three.
Now how is it distributed?
Land gets rent.
Labor gets wages.
Capital gets interest
Rent is all that portion Of the
wealth produced which is taken for
the use Of land.
Wages is that portion of the wealth
produced which is secured for human
exertion.
Interest is that portion Of the wealth
produced which is secured for the use
Of capital.
understanding of the distribution Of
wealth, and we may proceed to trace
out the cause of the industrial depres-
sion.
Now If labor and capital do not
have things after all their work then
who has got II, and how do they get
1t? Let us see. There are three fac
tors In production-Land, Labor and
Capital, the distribution is among the
three.
Now It is clear that the more land
gets as rent the less will be left for
labor and capital and as rent is con-
tlnualy increasing IL continues to take
more of the wealth which labor and
capital produce; therefore as rent
rises wages and interest must fall
This is as clear as that the greater
the subtractor the less the remainder
Let US look at it from another view.
Suppose three men go into business
together, is It not clear that whatever
one gets will determine what will be
left for the other two. If In the di-
vision Of the earnings OF the company
one gets so per cent, does not that
regulate what win be left for the
other two, which will be so per cent
between them; and If next year he
takes go per cent, does he not then
cut them down to 40 per cent? Then
1t is clear that as rent continues 70
rise wages and interest must get less,
for as rent rises labor and capital will
have less to divide between them,
just as the three men in business de-
termine what portion each one shall
get, for the more the one takes the
less will be left for the other two.
and the only way for them to get more
will be for him to take less, or else
to work harder and longer hours and
produce more wealth so as TO have
more to divide.
Suppose a man living in Boston, |
Mass. owns land In Delaware, and
there are many people who own land
here who do not live here. Some live
In foreign countries yet the people !
living In Delaware have to pay them
rent for living on the land in Della |
ware. Now is it not clear that the
more they get as rent, the less will
be left IN Delaware? For what goes
out of the State as rent there is
nothing coming back and as it is paid |
for living on the land. they do not |
give you anything in return for IL; |
therefore they continually take some |
thing away and bring nothing back. !
and in consequence Delaware must be |
poorer.
- - -. 60. -, -