Year: 1875

and mercantile houses this summer causes
an anxious community to turn for guidance
TO those who are supposed to watch the
turns and fluctuations of business is to
say, the operators in the great centres of
commerce. The answer by these oracles
has been quite different since the failure of
Duncan, Sherman 4 Co., and the failures of
| last week, from that given after the failure
of Jay Cooke Il Co., not quite two years ago.
The fact that there is at present no panic nor
any approach to panic may be accepted as
| q proof that the shrewd observers who are
in position to lay their fingers on the
financial pulse find different order of
| symptoms. 1t is not difficult to see the diff
ference nor to trace the Interpretation.


| We will mention first difference founded
on the calendar, of no great Importance in
ITSELF but leading by an easy step to the
fundamental explanation. The failures of
Duncan, Sherman & Co., the Bank of Cali
fornia, Ahrens K Co., &C., have occurred in
the summer months, or the slackest season
of the year, whereas the failure of Jay Cooke
& Co. took place in the busiest, when the
autumnal movement of the crops had fully
set in and the whole currency of the coun-
try was in active use. 1t is the difference
between failures when money is drug and
when there is dearth. The panic of
September, 1878, spread through the country
like wildfre, because the whole business
community had need of more money than it
could get and feared that it could not meet
its maturing engagements. The present
|


situation is totally different. The banks are
| full of money which can find no employ


ment--a conclusive proof that credits are not
expanded and stretched to their utmost ten
sion, as they were when the storm struck in
1873 During the panic men of solid
wealth found it next to impossible
rites; but there is no ground for such
fear now, when there are stacks of
currency in the banks ready to be lent at low
rates on any ordinary security. 1t is this ac-
emulation of money in the banks and the
condition of business of which it is a symp-
tom which makes men at the chief financial
centres SO easy in view of the great collapses
of the present summer. 1t is certain that
credits are not expanded; that there are few
speculative enterprises on foot; that the sup
ply of money will more than equal the de-
mand during the heavy business of moving
the crops; in short, that the ship is not in
danger from having too much sail, but
that her poles are too bare to catch wind
enough to keep her in good motion. 1t is
only the rotten hulks that founder in dead
calm If the recent failures had been de-
ferred until the height of the approaching
business season they might have caused some
disturbance and apprehension. As it is they
leave general confidence in about the same
state that it was, with perhaps diminished
prospect of its growing sanguine.


! 1t will not be surprising if there should be
a few more sporadic failures from easily ex-


planned causes. There are firms that barely
squeezed through the panic of 1873, with
| assets and connections sufficient for recu-
peraton if general business had revived
within year or two. But it has not revived,
| and the means of extrication have not been
earned. Moreover, there has been a steady
and progressive decline of values during the
| past two years which has constantly reduced
| the security which weak or embarrassed
houses could give for loans Many who came
out of the panic with property equal or nearly
equal to their debts find their debts undi-
minished, and their property so deprecated
by the shrinkage of values that it is no
| longer sufficient to secure their creditors.
| If the shrinkage goes on and business does
not revive they will, of course, have to fail.
| This lowering of values results from gen.
| eral causes, whose operation is not confined
to this country, but spreads over the world,


although felt with more intensity here,


partly as fruit of the panic and partly as
a consequence of our bloated and fuctuat-
ing currency The ebb Of general prices is
strongly marked by the trade returns of
Great Britain. The report of the English
Board of Trade for July presents the decline
in o striking light. A comparison is
made between the imports and exports
| of the first seven months of 1875 with the
imports and exports of the first seven months
of the two preceding years, showing that
while there has been decline in their money
value there has been an increase in the guam
titles of goods exported and imported.
! larger exchange of commodities, with de-
creased money totals, proves falling off in
prices, and steady decrease of values is un-
favorable to the profits of trade, notwith-
standing the increase of quantities. One of
the most intelligent of the London journals,


in commenting on the recent Board of Trade
returns, says:-'The true inference to be
drawn from the returns is that we are passing
through a period of low values, which are
affecting to very great extent the apparent


Importance both of our import and our export


trade. A period of low values ought to slim


ulate the foreign demand for our goods. 1t
| ought, therefore, TO be followed first, by an


increase in our exports, and then by rise in


prices Whether the time is yet ripe for such