The Greenville journal. [volume] (Greenville, Ohio) 1850-1918, 1908-07-23
BETTER TIMES AHEAD
Cause of the Recent Financial
Crisis.
PERIOD OF SHARP CONTRASTS
Great Activity and Deep Depression.
Difficulty In Obtaining Capital For
Railroads and Industrial Enterprises.
Cloud of Uncertainty Passing Away.

been hanging over the business ele-
ment of the United States is. in the
opinion of the British commercial agent
In this country, passing away. In a
recent report to parliament on this sub
jeet Mr.. Seymour Bell. the British
commercial agent in the United States,
says:
"The year 1907 was one of sharp
contrasts In the United States. 1t was
year of great activity and deep de-
preston. During the earlier months
all industries were exceedingly busy
and mills were working at their utmost
capacity. Many untitled orders had
been carried over from the previous
year. and buyers were experiencing
great difficulty in getting delivery of
their goods The railway lines were
congested. wages were at their high
est, and the high price of commodities
raised the price of living to an extreme
point. 1t was recognized by all those
In q position to form an independent
opinion that this tremendous industrial
activity could not last; that it was
merely a question Of time before Il
reaction would set in.
money was becoming scarce and
the railways and other corporations
were encOuntering great difficulties In
obtaining the capital necessary to car
ru on tho innrOvomaptS and avian
Sions which were in process of being
carried out Speculation in mining and
real estate had been rife, and personal
extravaganza was at its height. This
all tended to place additional burdens
on the money supplies, which were
hardly adequate to carry on the indus
tries Of the country. The railways
were among the earliest and greatest
sufferers from the financial stringency.
They found it almost impossible to dis
pose Of securities at reasonable price
and were forced to issue short time
notes at comparatively high rate of
interest to enable them to continue
their developments. AS wages were
high, owing to the scarcity of labor,
and high prices were being paid for
materials, the net earnings Of the rail
ways were considerably reduced, al
though the gross earnings showed an
increase. This brought about lower
quotations for railway shares, and the
industrlals followed the downward
path.
''The situation was peculiar On the
one hand there were the manufacturers
with more orders than they could fill
and busy enlarglng their plants, mer-
chants selling large quantities of goods
at satisfactory prices, labor in such
demand that even with the addition Of
the 100000 immigrants it was neces-
Sary to employ inefficient workers ut
good wages. On the other hand there
was dear money owing to scarcity.
when, owing to failure in New
York. light was thrown on the manage
ment Of some Of the large financial
concerns In the city. public confidence,
which had previously been undermined
by certain investigations. gave way
completely. resulting in an acute mon
ey panic.
'The panic was entirely financial. 1t
has. 1t is true. brought about wide
spread suspension Of trade and indus
try throughout the country. but as it
occurred at time when there was no
accumulation of surplus gold there has
been no throwing on the market of
merchandise at ruinOuS prices. the
usual accompaniment Of Industrial pan
les. The manufacturers, on the col
trary, faced the inevitable and without
delay proceeded to curtail the suppl.
and thus reduce such chances as there
might have been of Cutting the mar
ket with unstable articles. Fortu-
nately for the country, warning of the
trouble was given early, and it was
possible to take steps in time to pre-
pare for it.
"As to the length of time the present
depression will last, it is difficult to
form an opinion. 1t must not be for
gotten that the farmers, who form the
backbone of American prosperity. have
not been affected by the financial stu
alton. Though the crops in 1907 fell
short In quantity as compared with
1908, higher prices were obtained.
and the farmers received considerably
more money for their crops than in the
previous year. A country that pro-
duces crops valued at nearly f1.5OO,
100000 Is unlikely to suffer long from
industrial Stagnation. 1t represents too
large an amount to be held long unin-
vested. Farmers have had nine yea. =,
Of almost uninterrupted prosperity,
their buying power Is high, and the
towns dependent upon them will re-
main prosperous.
The farmers. who a few years ago
owed money, now own money and
have an assured outlet for their prod
uCts, aB there is no oversupply.
'The cloud of uncertainty which has
been hanging over the country for so
long and gradually growing more
threatening is now passing away, and
It may be said that the worst of the
storm has now passed. There will In
all probability be mercantile disturb
ances for some months to come, but
readjustment and recuperation are well
under way. and unless labor troubles
should retard the improvement or mo-
nopolies Of capital interfere to keep up
prices at too high level 1t is expected
that before many months have passed
business will be on safer and more
normal basis"