Year: 1874

At present the most characteristic feature of
our markets in every species of traffic is the
reduction of prices. All commodities are
offered cheaply, and the temptation to the
speculative spirit of small dealers from all
parts OF the country would seem to be cor
respondingly great but the condition OF
trade does not indicate as yet any faith on
their part in the immediate future, or, more
accurately perhaps, it indicates that large
dealers here have not that confidence that
leads to credit transactions. while the country
merchants have but little cash. Ii the un-
favorable reports of the cotton crop that we
hear in connection with the results of drought
and the ravages of the caterpillar shall be
realized and if the bad reports from some
sections of corn and other important staples
shall be echoed generally, these facts may
serve still further to depress the spirits Of
country dealers, and it is not possible to see
how the declarations of several political con-
ventions can have any but disastrous effect
on confdence-a plant that is just now pre-
eminently sensitive to such influences.


In seasons that succeed to commercial crises
the effect on prices, as now observed, is q
natural sequence. AS credit disappears prices
60 to zero. Brown, if he sees that Jones has
failed, Immediately wonders how it will be
with Robinson, who is heavy creditor Of
Jones; and as he in turn holds notes from
Robinson he is eager to get the money. If he
then hears o whisper that Robinson must
necessarily go the panic fear comes over him,
and, forgetful of all consequences, he rushes
about for his money as a man in burning
house rushes for the doors or windows. With
this repeated in every little circle of q COM
mercial centre the one demand is money.
Money is called for to liquidate all the out
standing obligations hitherto represented by
paper and faith, and there is not enough for
the purpose. In the markets Of civilized ma
tons there is never at the outside volume of
money greater than ten per cent of the whole
sum of financial operations With the sup
ply, therefore, necessarily insufficient and the
demand growing hourly and momently
greater the price Of money goes up. Mer-
chants, eager to save their solvency to
rescue from an impending cataclysm that
credit which is ninety per cent OF their cap-
tai, will give ''any price for money" But
what will they buy it with? With goods
with raw material, with manufactured arti-
cles, with petroleum, coal, grain, dry goods,
cotton-with whatever men can be found to
take. II money in such circumstances is
bought for goods, to say that money is
high in price is only to say that goods are
low. More goods are given for the same
amount of money. And this is the first effect
of commercial trouble on prices.


But an even greater effect follows. Panic
and its consequences destroy the market for
necessary for the support of life, both be-
cause there is no demand and because the
credit upon which trade was operated is for
the time destroyed Nobody will supply
goods on notes when nobody knows who will
be a bankrupt in thirty, sixty or ninety days.
and the great warehouses become solitudes.
Even the small trade of daily demands is
smaller, because the people are warned against
the rainy day, and the commodities already
in the hands of the retail dealers sufi-
ciently meet this restricted call. Yet pro-
duction continues, both in raw materials and
manufactured articles. Farmers and producers
of raw material generally are in kind
of economical treadmill and dare not stand
still; for though they see no immediate prom
ise they necessarily hope for the future, and
must be prepared for the opportunities it may
offer. 1t is the same in q smaller degree with
manufacturers. Nobody, moreover. knows
just how deeply credit has been wounded, and
all hope, and perhaps believe, in an early res
toration; and thus keep on from week to
week and month to month. Crops accumu-
late, therefore, at the depots and manufac-
tured articles in the warehouses, and still
there is no demand; and just in proportion
as the stores increase the prices fall-fall-
fall.


And it is obvious that this is one of the in
evitable steps in the process toward restora-
ton; for excessive cheapness in the price of
commodities becomes cogent incentive to
buyers, and the lessened earnings and smaller
remuneration for all sorts of services are found
to bear to the reduced prices of the necessities
and comforts of life nearly the same relation
that inflated wages bore to inflated prices, and
as high wages encouraged the people with the
notion of prosperity SO low prices lead them
on to what seem great opportunities; and thus
all the steps of trade follow again in their reg
ular order on lower plane.


Whereabouts do we stand in this process
now-at what point are we in this natural
career toward the restoration of all our COM
mercial activities, and what is the promise