The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1910-05-08

of 1907 was the exhaustion of the sup
ply of money. The railroads wanted
to borrow more money than there was
to lend, some estimates being as high
as a billion of dollars, the over-pro-
duction of securities caused the fall
in the prices of stocks and bonds, and
the panic was on. This condition,
coming at time of excessive prices,
excessive prosperity, and excessive
trading, made the market more vul-
nerable, and the reaction more severe
than it otherwise would have been.
There is at the present time an over
production of securities and exhaustion
Of loanable funds, to the extent that
railroads and corporations cannot dis
pose Of bonds and stocks in the guam
titles desired, and to the extent neces-
sary to finance their needs. If this
condition of capital were accompanied
as in January 1907 by extended trade
and prices, we would now be in the
midst of another panic; and as it is,
the prices of stocks and bonds are
lower than warranted by their intrin-
sic worth, and lower than they would
be if the supply of money were ade-
uuate to meet the legitimate needs of
business.
Periods of Activity.
Since the panic of 1907 we have had
periods of moderate business activity,
and this activity has been in response
to large extent, and has measured
in a fair degree, the ability of the
railroads and corporations to secure
supplies Of money. But activity is not
as well sustained as it might be, and
our prosperity not as great as it would
| be If our money supply We're as album
/ dant as it should be. Treasury re-
~ state that the ratio of gold to
! to- money in the United States, in
| creased from 1902 per cent on July
! l, 1897, to about As per cent at the
present time. These figures show no
lack of stability in our currency, and
that it could be increased in the fall
to meet the needs of business with
perfect safety.
| Until the needs of business are
! satisfied, there will be no redundancy
in our currency; and while gold and
currency have increased greatly in the
past few years, business has increased
still more, and the ratio of money to
business done in the country is proba-
bly, less than it was twenty years ago,
as money stringencies were not of
such common occurrence at that time
| Several Factors Involved.
|
in the high cost of commodities. Sup
ply and demand is the basis of all
prices. The supply of food products
Is affected by the weather, and also by
the migration Of farmers and farm Ia
borers to the cities. The prosperity
or the farmer soon transfers him from
the producing to the consuming class,
and general prosperity and increase of
wealth increases his buying power.
and increases the demand for pro-
ducts, so that one reason for the pres
ent high prices is that the demand has
increased more rapidly than the sup
ply, or, in other words, the present
thigh prices are the result of pros
perity.
High prices and, prosperity are
SYNONYMOUS terms, and are always
found accompanying each other; as
are also depression and low prices In
stating this truth, however, it is neces
sary to distinguish between general
and specific terms. Thus, prosperity
and depression are both composed OF
units, each unit being the prosperity OF
depression in a commodity. In times
Of general prosperity, there may be de
preston in some units, and in times
OF depression there may be prosperous
units. Prices of commodities are ar
index OF the state of prosperity or de
preston, and while prosperity is con
sidered a thing of good, and depression
a thing of evil, it is possible >to have
too much prosperity. Evil in life is
often excessive good, and nature alb
hors excess in the economic as vel
as in the physical being, and exacts
her penalties for the one as surely az
for the other. And We may have-ir
fact that does now exist, excessive
prosperity in some commodities
though possibly not as great as al
some times in the past, and probably
not as great as will be in the future.
AS high prices and the consequent
high cost of living accompany pros
perity, if We find what. affects pros
perity, we have learned what causes
the high cost of living.
When the tariff was first adopted
over production on the farms, and
competition in manufacture were the
rule; and the consumer often bought
for less than a fair price But not
only have conditions on the farm
: changed, but competition in manufac
? ture has ceased in many commodities
: and the tariff helps the manufacturer
: and producer to take unfair advan
tage of the consumer.
How Prosperity Is Affected.
Prosperity is adversely affected BY
fear of unsound economic and finan
cial legislation, and lowering of the
tariff. Other things being equal, thai
is with fair crops and sound legisla
ton. prosperity is affected more thar
anything else by the tariff, and with
out negativing the benefits of pros
perity and high tariff, l wish to cal
attention TO the benefits of a scien
tiffc tariff as applied to excessive
prosperity.
A Scientific Tariff.
A scientific tariff is one in which
the rate of duty automatically falls
III sliding scale as the selling price
Of the commodity rises above a rea-
sonahle level, and rises in the same
manner when the selling price of the
commodity falls. 4 tariff in which
the natural resources between the
rate Of duty and the selling price OF
the commodity is recognized A tariff
that will act on business like the
governor on an engine. preventing
; both excuses and depressions. A