Causes And Remedy

Ann arbok, Aüg., 12 1893. To the Editor of The Register: The first question asked isalways: "What are the causes?" There are four principal causes, lat. The Tariff, 2nd. The SilverBill, 3rd. OverSpeculation. 4th. The Panic of the People. 1. As to the Tariff. This country has Tor many years adopted acomparatively high protective tariff. This has stimulated manufacturing in all branches and built up our citiee. This of course has built upand stimulated trade in all departments, increased banking, and increased the business of the country generally. The party lately coming into power has announced by its platform, that it would materially modify the tariff, if not subBtantially adopt free trade. Business men naturally supposed that they would hasten to do this at the first opportunity. This must of necessity check the importation of foreign goods and also manufacturing in all departments. This of course decreases business in all departments, throws laborers out of employment, prevenís the collection of securities by the banks, and in every way injures the business of the country. If the tariff is suddenly removed, the importerB all lose upon their stocks of foreign goods just about the amount of the taritf. Importers ivill nottake such risks and consequently furl sails and haul close to tbe wind. Suppose the tariff on iron and steel is removed, the manufacturers would lose about onethird of the price on all manufactured goods. They cannot afford to do this and consequeutly close down their works. Free trade may be a better r.ol'cy for this country tban the present prolective tariff, that I shall not discass, slill there can be no question whatever, and the iresent business and flnancial condition of the country provesconclusively, that a sudden change frorn protection to free trade is fraught with great danger to all manufacturing and business interests. Ifanv modifications of the tariff are made they bhould not go into effect until at least two years alter ihe law is enatted. If the manufacturera and ness inen ofthis nation could now be assured bevond a question that the present taritf would not be niodifird to take effect until two years or more froin ihe present díte then most of the manufacturera would resume, and they could within the two years carefully prepare for the change in policy, and gradually and safely adapt theinselves to the new condition of things. ïhe modifkations and reductions of the tariffsbould be' ulow and gradual, so that manufacturera and business men can prepare for and adapt their business to the new policy. It is not possible for business men to jump off of a business precipice and save their financia! necks. It does not require much of a statesman to see that such chances in governmental policy sbould be very gradual and carefully considered, and self-interest.should lead political parties to adopt the course that is safest for the business interests of the nation. It has been contended vcith much reason that the liability to frt" quent, sudden and radical change in policy, in regard to these important mattere will prevent this country from ever becoming a great and successful mannfacturing nation. Al', are agreed that the purchasing clause in the Sherman Silverbillshould be repealed, so it is not necessary to discuss that. As to thethird cause, over speculation that is pretty well understood and appreciated. ïoo many men have been doing a fifi y tbousand dollar business on a five thousand dollar capital. Young men of great zeal and courage have gone extensively into real estáte speculations, with very little capital. The business paper of all of these men, who have undertaken to cover too inuch ground, is in the banks and the banks cannot collect at once. The next Ihree or four months will clear up most of these speculators. Excessive speculation will stop for a while until legitímate business can recupérate. The last cause menlioned, "The Panic of the People," is the most senbelets, and at the same time the most serioup. The banks are the middle men, so to speak, in businefs. They gather up the widow's mite and the larger sums of the wealthy. Many of them pay a moderate interest on the small deposits, and then loan to business men in larger sums and at a greater interest upon good security. They aie the orUy machinery we have to gather up the small holdings of the masses, and put them into use in the active channels of business. Each individual cannot loan his money for himself, the banksmust do thisfor him. Thev can do this business at a much greater proíit an J with a less per cent. of loss than the individual. Indeed it is the only and best machinery we have to put the inoney of the people into active service. The people get a direct benefit ;n the way of about four per cent for their monthly balances in the banks and they get a still greater indirect benefit from the general activity of business in the community which gives them employment and increases the value of all they posses. Tlie man who withdraws his patronage from the banks, cuta off his right hand. Money is worse than useless if not In active circulation in business, it was invented for this purpose and this alone and any other use or disposition of it is a gross perversión. The man who withdraws or withholds his usual deposita from the bank clogs the wheels of every business in his community and in the state and nation. This is so because we knowifone person does this many others will follow his pernicious example, and the result is a national panic. It is or ought to be understood that the officers of a bank are more than anxious to do a safe business, makesafe investmonts and preserve at all hazards the reputation and standing of their bank. They have every motive and inducernent to do this and little or none to do otherwise. It is or ought to be well known that no bank can pay all its depositors if calledupon in a single day. They c;ould not do a banking business if they were prepa-edat all times to do this. Then too the panic of small depositors is even more disastrous than that of the larger holders, they leave their money longer in the bank and make up the working fund of the bank. What then sbould the people do when the danger signáis begin to appear? They should ;lo just what good soldiers do when the enemy appeare. Close up ranks, stand shoulder to shoulder, boldly face the enemy, stand firmly by the General, and never under any circumstancesallow themselves to think even of stampede and panic. Cowardice is as unfortuntae in civil as in military affairs and a man who will allow himself to get into a panic at every flurry on the business or commercial world, is a dangerous member of the community. This course has injured the laborins; men of this country more than all other causes combined, and will cause much Buffering that might have been and inight now be avoided. Let the laboring men and women stand courageously by the tanks and they will soon restore confidence and general business activity and prospenty. The banks too should stop hoarding deposits, and I believe they will do this as soon as depositors demónstrate that there shall be no run on the banks. Ignorance, inordinate selfishness, and a failure lo understand and appreciate the hood and mutual dependence of men in business affairs as in all other affaire, is the major cause of the present un fortúnate financial condilion in this country. The strong and elastic recuperative forces in this nation,as in 1873, will make the pauic brief; but it onght not to have occured at al), and jortunes will be made as in 1873 by men who hold steadily on in legilimato business and buy at present low priees and sell when ihe a avance comes in tbenuai future.