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Prospects For 1883

Prospects For 1883 image
Parent Issue
Day
26
Month
January
Year
1883
Copyright
Public Domain
OCR Text

There la a superstition in niany ininds hat Uic year 1888 must bring another anic. So far as this notíon rests íjpon he fací thai ii Ís now about ten years incc tho last commercial coilapso, it is i mere superstition, unwajrranted by exerience ór reasoning. The attempt to race a ten year periodicity in the recurcnco of commercial disasters has to disort íacts. The crash of 1837 was not ollowed by another in 1847, nor was he panic of 1857 succee-led by anything leservlng the same name or consideraion in. 1867, nor can any lixed period te suggested which avíH fufo harmony the really important disasters of 1837, 1857 and 'i 87;!. Tho mero 'late, herefore, has neither meaning nor weight. If a disaster is to bclooked for his year with any reason wlmtcvor, it nust bo for a very different reason. Nor is tHere ground for such appreícnsion in the visible expansión of commercial credits during the past tvvo years. The average of inttebtedness ïas not as yet neany reacnea wnat maj dc termed the bursting point. It is not anywhcre near as high as it was at ot lier times when panies eamo. It would erefore Ijo inferred with reason that, ïf a disaster should come in 1883, it would not bo due to any extravagant xpansion of credits in commercial business, thougii the fact that there has been some expansión would make the effcets more serious if an explosión Exeessivc building of railroads has been mentioned as a reason for ftpprehensian. Tl cannot be doubled that a great smu of money has been unwisely and unprofitsbly invested in that direction, as respecta the general interests of the country, though the instances in which individual promotors have lost or will lose may be much loss numerous. If a new road close to the New-York Central should make that property wovtli much less, tliere would be a tcmporary or possibly permanent loss to somebody, even thougli the new road should be largely prcfitable. In some instances that could be mentioned, the apparent purpose in building new lines was to cripple older companies, or to foree thein to purchase the new lines for more than their cost. But waste and excossive competition do not necessarily involye disaster. Mr. Vanderbilt eau spend more money in a day, without risk of bankruptOT, than somc men coulil spend in a lifetimo, and tuis country is getting rieli enongh to bear uilliout serious disturbance an amount of unprofitable iavestment which would have brought ruin if it had occurred thirty years ago. It has not been CMlllmHl 11K11 UlO rtlU CUSL Wl 11,UW UI 12,000 milos of railroail built last year was move than f80,000 per mile. Only a part of that cost was unprofitably invested. But 3.50,000,000 is less than the average yearly ittldition to the wealth of the country by sarina;, and probably less thau half that addiÜon. The country cannot bc ruined by wastrng .a fractiön of half lts clear income. Industries have got into a false position, it is true, and ono of some embarrassment. Their diñieijlty, howerer, is one of exeeesivé production in some direct ions, and tliat tends to cheapness and to iaorease of comsumplion, wlnch, with partial suspension of production for a time, operates to euro the disorder. There can hardly be any sorious disaster as a result of temporary over-prodcution in a legitímate braneh of iudustrv.lf some loso, because producís must be sold clioaply, others gain in buying cheaply. The principal danger, so far as there is any real danger, growa out of impropër and excessivo speculation. ïhe effect of such speculation upon industry and comineros, its close conneetion with linaneial movemeuts, its poworful effect apon the stability of corporations, have been ièpeatedly portrayed. It cannot be denied that the fury of speoulation which has been witnessed durilig tlie, last year in some departnients does harm, aad involves risk to many othêrs besiiles the gamblers themselves. It is [iiite possible that, if banks and business men should eontin&e (o entangle themselves more and more in this way, 11 disaster might ocour. But there are two reasons for hoping that it may be uvoided. The lirst i,s that banks and business men have had some pretty sharp warnings of the danger. It would be strange indeed if tliey should nol lake especial precautions to d.i-aw away from dependence uponoperations-so plaibly dangerous. The second is that the speculative fever has about reached the stage at whicli the ffofessional gamblers are left to amvise hemselves with each other. The fact hat eerlain markets are no longer govirned by legitímate eonsiderations of value, or supply and demand, but by lonspiring and triekery, lias become ;oo widely known. The failure of a Seore or two of specvdators, if thebanks uid the pubüe would let them alone, would not lie ft disaster to the country- quite the contrary.

Article

Subjects
Old News
Ann Arbor Democrat