The Richmond Virginian. (Richmond, Va.) 1910-1920, 1914-01-12

NEW YORK, Jan li.-Perhaps the
dtatinr cushing characteristic of the
present week has been the succession
OF reports from industry-all show
ing trade reaction In full swing, yet
all accompanied, not with gloomy in
ferenres. but with such cheerful
prophecy for the Immediate future
that the actual figures of the industrial
returns seemed To have no relation TO
the present conditions. The iron trade
reported for December the smallest
output made in that month since 1908;
yet the comment of the steel trades
organ directed itself 10 he spread of
better sentiment" The Railway as
soeiation figured up 1871 900 cars add
ed 10 the idle total in December. as
against only 50 600 In the same month
last yead, but dispatches OF the same
day, from railway cfnters. spoke of
the Frightening outlook.
Thursdays monthly copper trade
statistics showed such falling away in
home consumption of the metal--due,
of course to slackening trade activity
that unsold supplies, which at the
opening of the month were already
1000 tons above the midsummer total.
very nearly doubled in December.
Yet the showing seemed to make no
one, In or out of Wall Street, feel UNI
CbiuIpIiaBlt. IL itiittiSht aid cpsS
dismissed az rejecting, past conditions
On top of all, the reports Of unem-
ployed, lin the great industrial cities,
followed one another with such dis
tressing emphasis that the man who
listened Ia them, and to nothing else,
would have thought himself back
again Ia 1905. But no one thought
so.
Analogics.
It must be admitted to begin with,
by any one familiar with Wall Street
and it's history. that the mere fact OF
such an attitude towards the con-
ditions of the hour is not of itself con-
vfncing Nobody has forgotten the
famous Sunshine Movement" of tint
after-panic year. when associations
were formed with the avowed and de-
hberate purpose of denying the ex-
istence of the unfortunate trade con-
ditions which every one knew existed
StIll. even of 1908 ii might be said
that, despite the manifest absurd!ues
of that demonstration. the truth was
that the worst was over. that the SIT
uatton was growing better and that
the country had no 1894 ahead OF
IL.
ON that occasion; II was the stock
market which gave warning of the
January The iron market. followed
suit when prices and production turn
ed from their low level, in the SPRING
by autumn, general trade was NOV
ing The present situation has been
marked by a similar sequence OF in
dications The stock market scrape0
bottom in the third week of Novem-
her; II burst into activity and strength
In the last half of December. Both
In, ctn
trade reached it's pitch Of deepest dis
couragement in the last weeks Of De-
ccmber; both seem to have turned
with the opening of January. Az in
1905 so in 1914, II would be the
recognized order Of events If gem
eral trade was to reach low ebh after
stock exchange and steel trade were
e1sibly moving forward. But first. 1t is
essential to determine whether the
signs are trustworthy, and, II 80. then
why?
What Causes Trade Reaction?
Granting the present existence OF
trade reaction in this country, one
thing to determine would be, why
such condition should exist. Every
one knew why it existed in 1908, after
the panic shock, and in 1908, when
she premature boom" of the previous
year had spent its force. There are
four distinct causes which, singiy or
together can bring about trade re-
action One is a season of disastrous
failure In q country's natural re-
sources-notabiy the harvests. Moth
ing like this has occurred to bring on
the present trade reaction; wheat and
cotton tell the story of prosperous
seasons. and probably more than off
set last years bad luck with corn.
Another frequent cause is what the
economists call "overconsumption" (:
meaning that retailers have stocked
up with more MERCHANDISE than they
are able 10 dispose Of. and that Gus
toners have themselves been buying
more than they could afford. That
stops the coantrys purchasing power.
( But no such condition prevails AT the
present time-@the proof Of which may
b.- found IN he quite Unanimous regtt-
mony that unsold supplies are alb
normally small; that traae is ION a
hand-tomouth basis" and yet that re-
tailers constantly have to send in