The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1908-01-01
REASONS FOR
MONEY SCARE
OVERRIDING OF EVERYTHING IN
BUSINESS LINES HAS CAUSED
FURRY.

NEW YORK, Jan. 1.-The close of
the year finds us energetically strug-
Cling to emerge from one of the most
disastrous financial panics in history
Security values nave shrunken at least
one third, and in many cases more than
one half of the figures quoted a year
ago.
While the causes of the panic are
row generally understood, it may be
well in taking account of the past
t1c months to briefly cite the chief rea-
sons. Among these causes were gener-
al overriding; over extension of credit;
over speculation: over issue of secur-
ties; great industrial expansion; ex-
cessive underwriting schemes; excess
! sive mining and real estate specula-
ton; earthquakes at home and abroad;
japanese and South African wars;
general public extravaganza; exhaus-
ton of floating capital; distrust in
duced by corporate mismanagement
|
teal leaders and legislative bodies at
home, stimulating erroneous prejudice
against wealth. These conditions, how
ever, are now a matter of historys and
and of little interest except for the
lessons they convey. 1t is of first i'm
portance to recognize that complete
change of base has taken place; and the
business world. whether it likes it or
not must now be actively concerned in
tadjusting itself to new conditions. We
have been suddenly precipitated from
a high level to lower, and the sooner
this vital change is admitted and con-
formed to, the prompter and sounder
will be the resumption Of business ac-
tivity. Fortunately the panic fell with
greatest severity upon those best able
! to bear it; wealthy institutions and
the rich men being the chief sufferers.
Upon the industrial, mercantile and la.
boring classes the shock has been much
! less severe; a distinction that it is inn
portant to bear in mind. 1t would be
| folly, however, to indulge in decisions
as to the final effects Of the panic. In
greater or less degree the consequence
es will be distributed over all parts
of the country, and it is not unreason-
able to be prepared for at least a year
of comparative depression, certainly in
| the east where commerce and industry
are most concentrated.
Farmers Conditions.
There is reason to believe that the
| worst consequences of the panic have
been limited to financial circles. But
| to gain some idea of the future in this
respect it is necessary to inquire into
the condition of our chief industries.
First comes the American farmer, who
last year raised crops valued at $780,
100000 much the highest figure on
record. His condition must be highly
satisfactory; for after seven or eight
years of uninterrupted prosperity he
is now out of debt and SO we'll situated
financially as to be comparatively in
different regarding any business recess
sion in the United States. Should he
fail to secure good prices at home he is
almost certain of obtaining them
abroad When it is fully appreciated
that according to the census about 50
percent of our working population is
engaged in agriculture, it will be read
lily recognized that the farmer is still
the backbone of the country IN spite Of
the fact that the growth Of agriculture
is hardly Keeping pace with population,
and is still producing less than one
half the amount turned out by our
manufacturers.
Our growth in manufacturing is enor-
NOUS and in 1907 our products must
have considerably exceeded S16,000.00O,-
900 in value; but owing to the extern
sive use of machinery only about 20
per cent of the country's hand labor
is thus employed. The manufacturing
division of industry will, however. feel
the panic much more severely than ag-
riculture. General retrenchme mt neces-
sarily following financial disaster will
restrict demand-not alone for luxu-
ries-but for many staple products and
lower prices must follow. 1t is plain
also ttlat the purchasing power VA thS
public at the former level has been ex-
hausted and costs Of production must
be reduced to lower and more nor
NAL level in order to cheaper the cost
Of living Labor may choose to resist
this tendency by holding up the rate of
wages as long as possible; but natural
law will assert itself In the end. and
both commodities and wages must ac-
cept their share in the inevitable read
justments as capital has already done.
Industrial reaction. therefore, has not
yet run it's course.
Food Production.
1t is worth while however, looking
still more closely into the industrial
situation. The most important divi-
! sion of manufactures is that of food
products, of which we produce over
SO, 00O, 00O, 900 annually. This trade with
few exceptions is in very sound con-
dition, owing mainly to growing con-
sumption and the absence of. any over
production. In the next important d.