Year: 1873

TOo Much FXtraVagance and


Reckless Abuse of Credits.


Among the numerous newspaper


articles on the causes which have led


to the present financial difficulties,
we have seen none more sensible and
to the point than the following, from
the Columbus Journal. 1t seems to
us the writer hits the nail on the
head in the very first sentence. Too
much credits undoubtedly one of the
most potent causes of the trouble.
Read the article, and think it over
carefully:


"The cause of the present financial
difficulty is too extended credit.
The cause of this again, no doubt,
was the stimulus given to business
by the immense volume of currency
and the enormous transactions of the
war. The size of the transactions
and the magnitude of the failures
which so amaze us now are the re-
sult of the largeness of the volume
of money. The currency itself is
subtantially mere extended credit.
But the financial embarrassment is
produced directly at this time (as all
past and, we think, all future fnan-
cial difficulties will be produced) by
the unwise and, in many instances,
reckless use of individual or personal
credit. Credit is legitimate and use
ful in trade and commerce. It is a
part of the curious commercial ma
chinery of which money is the great
engire. But like every other ma
chine in the hands of the unskilled or
the reckless, it is an instrument of
danger. If a child or a drunken
rowdy were to be put in charge Of
the most perfectly made locomotive
on the best road in the world, with
the boiler full of steam and the lever
in his power, there are few sane
people who would care to ride behind
the engine, and no one who would
not expect to hear of a terrible crash
from the venture. And yet ma
chine equally powerful for good and
equally dangerous, as delicate III its
adjustments and as fearful in its
power, is Credit. One unskilled in
its nature and use can no more man
age it with success than he could a
locomotive and one reckless in its
use can produce as disastrous re
suits.


'The facts, so far as they are re-
veale1 in this panic, show that the
financial machinery of the country
1--WE speak of private uses) has been
shamefully abused-sometimes evi-
lently b6 those who did not under
stand the nature of financial affairs,
but more generally by reckless men,
regardless of duty and determined to
secure their own ends at all hazards,
and some, we believe, simply insti-
gated by a desire to see how far the
machine could be pushed, and see
what would result in putting on the
fullest head of steam. The interest
of the masses have been disregarded,
and in the end they are the sufferers.


accompanying this recklessness
has heen a degree of extravaganza in
living that is shameful Men in ac-
tive business and their families have
used all their net income, and often
much more, in wasteful extravaganza.
The expansion of their business, the
necessary enlargement of growing
manufactures or commerce, has been
made on borrowed capital, or credit;
md when panic comes, and the
free circulation of money is impeded,
is often happens, the ready cash is
al used up by the extrayagant living,
and the assets other than cash,
which appeared so valuable and east
ly available, shrink up withered and
dead in the hands of the owners, like
apples of Sodom, and failure and ruin
are the result.


"The remedy is simple: Follow the
old paths of business; manage busi
ness prudently; husband the cash re-
sources; live moderately; expect strin-
gencies in the money market, and
provide for them, by limiting the
amount of debt incurred to the
easy resources of your business; be
honest yourself and require honesty
in all others; do not be dazzled by
the reckless dash of inexperienced
youth or hardy adventurers, and these
disasters-which needs must come
will be comparatively moderate"