Year: 1874

;uputad In aomsth;no ouite outside of the amount
| ofilnonoy in circulation. We find, ss we nave
already said this something in the undue extension
and abuse of the credit system. The fundaneh''i
difficulty lies in the fact that there has been 700 ~
lending and too much borrowing. That thore was
too much lending is demonstrated by the sh'''oiu
fact that some of the principal banks of the conn
try went down before the first blast OF the tempest
and veeks elapsed before they could recover them
solves and pay their obligations. That there was
too much borrowing is equally evident In the stop
| naCes and failures of numerous leading bankers
| mercbants manufacturers, and railroad corpora
tions involving enormous amounts OF money anu
corresponding losses People borrowed ana lent as
they never borrowed and lent before Credit waspied
on credit and obligation piled on Obligation tiii al
the floating capital of the country. and all that couu
be borrowed in foreign countries. was absorbed ana
expended. Immense amounts have been SUNK III
every kind of improbable enterprises IN the rNai
res of the great transportation companies ana ln
extravagances of all sorts, till the activities OF the
country have finally sunk down i'll exhaustion from
their own efforts.


Now having determined what panic is, and what
causes it, we are prepared to consider what is its
cure 1t would seem as il there could be no dlSa-
rreement in the answer among those who have an
intelligent appreciation OF the CONDITION OF tnlngs
AS the country has suffered from over-acton' what
it now requires is ropose. When man has run him.
self out of breath he must stop and rest Ihere
are vast numbers of unpaid notes. OF undscharged
obgations Of unfinished enterprises, OF extensions
and renewals of unadjusted accounts, OF unhnlshed
probinps into doubtful securities and long train
of examinations into the dubious realms OF personal
and corporate credits which require time for settle
ment and solution. 1t is a slow process for the
country to feel its way back to solid ground after
the giving way of so much of what was deemed
stable masonry in the financial fabric. Our com
plants cannot DO cured any more than broken
leg can be cured without taking time for IT, IL IS
only by patient continuance in well doing.iafter
long and serious debsuch. that we can recover our
| health of body and vigor of spirits. 1t might DO
worth while to inquire whether some phases OF our


condition are not the result of natural reaction
| against the system of high prices and enormous


profits born of the war. Consumers are exhausted


by their long continued efforts to keep pace with the


demand of producers and middlemen. 1t is quite


notorious that high prices have destroyed some


Hourishing industries, and prevented the develop


ment of Others Is not retrbutOn thus showing it


self in its natural formsf


But without considering this point. we can. in any
| case sec that great want of paying consumers is


now manifest. Production has III many cases out


stripped demand and is almost everywhere dimin-


shed for want of buyers who are able to pay. The


country needs tonic that only increased consump-


ton can furnish. But that consumption can only


result from larger purchasing power. This. IN its


turn. must come from demands. either foreign


or domestic, for the products of labor-agrcultural


mechanical. man ufacturng. But the foreign de-


mand for products is now above the average. so


that we need not look for augmentation in that


quarter. Our business of railroad building. which


has for years employed vast variety of skilled and


unskilled labor, from the throwing up of earth


bankmens to the construction of model engines and


palace cars IL brought to comparative standstill.


Not for want of money but because the business has
outgrOwn the immediate need of the country and
| does not pay. An immense amount of money has
| gone into these constructions which thousands of


investors therein would beOnly too glad to get back


And if they got it, it would be long before they
| would lend again those similar securities.
| Our general manufactures and tho supply of coal,
iron &c. can only keep pace with the general de-
| velopment. They have got great headway through
the rapid advance of the country. but they have
| rived at point where they not to be forced
further by mere abundance superabundance of
money. The cotton. irOn and wool manufactures
and the products of our mines have been very much
multiplied and extended. and no operator will say
it is more money that Is now wanted to make
them profitable but increased demand The fact 49,
consumption has temporarily attained its maximum
point This is shown by the revulson. which is but
the natural result of long period of exceptional
activity and an extraordinary of prod gal private
and public expenditure.


The production of the country beginning to
outrun consumption. This wasito be plainly.
enough in various ways. particularly IN enormous
borrowing and in tho fall OF prices. before
affairs eliminated in the panic. We should have had
something akin to the existing stagnation and de-
preston, even if the panic had been tided over for
another year or two. The country has, then,
tered upon an enforced period of rest from It's
exertion; and this. along with the healing aud
settling processes for which it affords opportunity
and the review of the situation which it compels,
mustibe the chief remedy for its ills.


Those who think otherwise, and have faith in fresh
issues Of paper money specific. will not bo long
in discovering their delusion. Already money is a
drug in the largo cities and what more, themoney
lenders there to-day less exactIng by far in the
character of tho securities demanded for loans than


tls proposed by the inhati0nsts the Treasury shall
be in its new issues for universal consumption. The
Government must have National bonds, but the
banks and bankers will be quite content with good
notes 1t will be only a short period before every
body will see that 1t is not because money cannot be
borrowed that the business of the country langushes


The questions before Congress touching our
monetary system are really quite ndepend-
ept of the industrial situation though men,
bers of Congress persist in treating
them as identical If not wholly at
fault in diagnosis of the and it to be
o very plain one. expansion OF our paper money is
sues would not improve the situation, and a mode
rate contraction would not harm it. ltisa favorable
period, therefore, to repair and improve the none
tary system. This may be done by very simple
process without meddling with the volume of paper
money in circulation. This process is to establish