iecembar 30, 1884





The Record and Guide.





1279





The World  of Business.





The Cause of Low Prices.

We sometimesget a new idea started from the other side of tbo Atlantic,
but more otten old ones refurbished up and put^forward as new, that have
long been laid on the shelf in Europe as rusty and of no further use.
Everybody is endeavoring to account for the present depression in trade,
and a sort of controversy is going on between two American papers of
repute touching this very subject. The Northwestern Lmnberman. a
Chicago paper, rather takes to task Toe Record and Guide, whicb is
published at New York, for maintaining that the present dullness of trade
ie caused by a lack of sufficient currency, and a natural reluctance of
manufacturers to produce goods on a falling raarket. Then it goes on to
say:

" Well, what is the reason ihere is a. falling market? Let ns get at the begin-
nine of the matter. First, there was a drop in iron, as a result of producing too
much for the market. Coal followed suit, then woolen, cotton, lumber and
grain. The iron makers overdid the thing, because a boom in railroad construc¬
tion was too much for them. They became excited, and gave too much head lo
their team. The momentum carried them loo far. Just so it was with every
Industry. All were overdone. There has never been any lack of money to do the
business with, but an over-feeding of the markets has resulted iu plethora and
loss of appetite."

To this The Record and Guide rejoins that trade depression extends
alike to the four quarters of tbe globe,  and that no civilized country is
exempt from it, and it assorts that " the produce of human labor,  nearly
everything dealt iu by merchants, or produced by manufacturers,  is
cheaper thau at auy time during the past century."   This, of course,  is
too answer to the argument of the other paper.    But it glances  over the
possible causes of disturbing tbe equilibrium of trade all round the world,
and comes to the conclusion that the secret lies in the demonetization of
silver, whereby tbe circulating medium of tbe great commercial countries
is too limited to answer fully to the requirements of trade, whicb there¬
fore languishes for the want of it.   He asserts, without tho production of
any statistics, that " the supply of gold has been falling off, for a decade
at a time, when there was a prodigious development of modern industry
and commerce.   This is the natural cause of the depression."   Without
endorsing this particular view of our contemporary, it raay be ad ritted
that the increase of  the  currency  is   a  legitimate cause of promoting
trade; but it is not easy to see that by making silver a legal tender to
any amount in the same way as gold the general depression of trade
would obtain any substantial relief,    Every raan who can  get hold of
silver,  eitber in coin or ingots, can  realize  ils  value in  gold, and we
are rot aware that any silver mines are neglected for fear the world
should have too ranch of that valuable raetal.   The fortunate pioneer, let
us imagine, has just  what he stands up iu and the means of procuring
a few tools to begin with, which, perhaps, he obtains out  of the  pro¬
ceeds of his first nugget.   Trade has not beneflted much by him hereto¬
fore, as his expenditure was probably on the narrowest scale of decent
poverty.    But  with  his  first  handful  of  golddust   he discovers that
he wants  a  new   Sunday  coat,   and  the rest  of  his  habiliments  no
less   require   replenishing.     His   ideas   expand   with   his   success.     His
wife   and   his  children,   probably  not  far away,   must  be  reclothed
from   head   to   foot,    and    the   stores   in   the   nearest   viUage   are
ransacked for the best that money  ean  buy.    But  such  fine  things
in a hut or a mean cottage become an intolerable incongruity, and he,
by skill and handiwork, becomes possessed in a brief wbile of sufficient
to,thiuk of building himself a better habitation, and everything about
him soon furnishes evidence of his altered circumstances; not, perhaps,
stopping short of a carriage aud horses, of which there were hundreds of
examples iu the early days of San Franciaco.   When tbe gold fever broke
ont iu Australia in 1851-2 trade in England, and in America too, became
greatly inflated, hut we cau hardly accept the conclusion the writer in
The Record and Guide draws from these spurts.   He says, speaking of
former times, " Whenever there ^vere great gold and silver discoveries,
industry was healthily stimulated, and the bulk of the population of
every country enjoyed the advantage of good times."   In the case of our
own colony it may be remarked that in less than tbree years from the
time   of  tbe  discovery  of    the   Ballarat   gold    field,    British   goods
of various kiuds were such a drug in Melbourne tbat there was no sale
for them, consignees sometimes refused to pay the freight on tbem, and
it was even asserted that boots and shoes were absolutely reshipped back
again to England,    At all events it was well known that many shippers
never realized the value of tbe advance thoy had obtained on their bills of
lading at bome.    In the meantime new manufactories had been setup.
Ironworks, cotton rcills, every description of wares and clothing were
produced in unusual profusion, and it may safely be siid for every cargo
really wanted  in the colony three were sent out     Granted that a great
trade was started by these gold discoveries, it is by no means clear that
throughout " the population of every country, Industry was healthily
stimulated " thereby.    A great number of manufactories were soon found
to be superfluous, and in order to keep them going a degree of competition
arose which has in hundreds of cases reduced profits below the require¬
ments   of   the   establish rnent,   till   ruin stared   thera   in    the   face.    It
is    true    a   great    colony    arose    out    of    it    in    Australia,   but
it   was   already   a    thriving   portion   of   tbe    British    e;npire   before
tbe thought of gold-digging sprung up amongst tbe settlers.   And nothing
seems more certain than that, though gold continues to flow from those
regions, its effect on tbe industries of the world is uo longer appreciable.
The cause of the general depression of prices may be ascribed with greater
likelihood to the unlimited productive power of steam as  applied  to
machinery, for superseding human labor, which is pervading every trade
and becoming more and  more universal with each succeeding year.    It
bas been asserted tbat by its use one-balf the iron worhs of England, kept
in full employment, would supply all the wo.'-ld with that commodity iu
profusion, without tbe need of any olher country producing a single bar.
And in some trades vast engines are at work,   requiring only to   be
attended by two or three men, that do the work ot a thousand.    In no
country is this more conspicuous than in America, where mighty oaw-
mills turn out their millions of feet of deals and boards per week, till we
doubt the power of almost any conceivable demand to keep pace witb
them.   Wben we consider that all the gold and silver in tbe world is noth¬
ing to tbe amount of paper money tbat passes into circulation for Iho con¬
venience of trade in  tbe shape of bills, bonds, shares, bank notes, &c.,
wbich are taken in exchange for com-uodities aud properly of one kind or
another, the discovery of a uew gold or tilver niioe can only be regarded
ns a spasmodic benefit to trade.    It ushers into existence a great nutiib''r
of now establishments whicb are not wanted, and soon become a burden.
It is like a high spring tide which is sure to obb out all tbe farther for ths
extraordinary  rise to which it had attained.    The friendly controversy
between our American contemporaries aforesaid amounts merely to this,
the iVoi-(/iwe,steriiLitjn()p»'mcm would adjust the balance of trade by tnk-
ing some of   the merchandise out of ihe heavier scale, and The Record
AND Guide would rather add more bullion to thp lighter one     Hut where
is the latter to come from 'i.—Lomlon (England) Timber Trade'x .fournal.

I'remoihilious of a Colonial Policy.

The acquisition of colonial possessions has never as a historical fact
commended itself as a policy to the support either of tbe statesmen to
whose bauds tbe moulding or formation of this government was com¬
mitted, or of those of a later period. Apart from the popular spasm for
the annexation of Cuba, a quarter ol a century since, followed by certain
rregular negotiation under the adminifltratioa ot Gen. Grant for the





acquisition of St. Thomas, and a diplomatic aspiration at about the same
time for obtaining control of the Samana Bay, and an occasional covetous
look at Hawaii, there is little or nothing in diplomatic or political records
to show that foreign territorial acquisitions of tbis character were in har¬
mony with American aspirations or American ambition. We could
annex tbe lands of our near-by neighbors without stint or limit, as witness
the annexation of Texas and other Me-^ican territory, and the purchase of
Alaska from Russia; but while thus enlarging our borders by tbe absorp¬
tion of conterminous territory, we have scrupulously abstained from
appropriations or acquisitions elsewhere. In all this we have been fol¬
lowing the "traditions of tbe fathers;" but as theworld moves and tbe
advance of civilization acquires new momentum under tbe wonderful
applications of modern science, along with n corresponding expansion of
commercial adventure, tbe spirit of the age would seem to be insensibly
breakiug away in spite of ourselves from those traditions, as tending to
unduly restrain tbe impulses of a great people naturally ambitious to
occupy a commanding position among the family of nations. The stay-
at-home and mind-your-own-business precepts which were applicable to
three millions of people, cooped up in the original thirteen States, itis
felt are ill-adapted to fifty millions, with thirty-eight States and a
territory extending from ocean to ocean. And so the " ships, colonies and
commerce "dream of Napoleon, in planning the future greatness of France,
is in some sense become the Americau dream. We have lost our " ships,"
but we expect some day to get them back. The i'eomraerce" we are endeav¬
oring to extend by rraaching out our hands |to sucb countries as will make
reciprocity treaties with us—au endeavor, however, wbich can lead to
results comparatively unsatisfactory to those which must follow anon an
intelligent and statesmanly revision of our existing tariff. As to "colo¬
nies" it ii surprising what progresslwe bave been making, quietly, in a
modest way, during the few years past. The active interest manifested
by this government in the diplomatic arrangements for defining tbe rigbts
and privileges of the International African Association, in the Congo
Valley, for example, is not only a manifestation of a lively interest in
the future commercial importance of the Dark Continent, but in spirit
a signal departure from our foreign policy in such cases. The Presiilent,
in his message the other day, referred to tbe " valuable premises " which
the United States alreadyjpossessed at Tangier, andlto a similar acquisition
from the government of Siam, Japan has agreed to concede to^us some real
estate at Tobio, which may become tbe nucleus of an Americau settlement
there; wbile there are intimations not leas distinct that advantages of the
same kind may be, with a little diplomatic management, obtained from
China and Persia. In diacussing the subject the President went as far as
to speak of the " due assertion of our territorial rights iu those countries."
This is a novel phrase in our official literature, but it ia significant as show¬
ing a new drift of thought on tbe part of our publicists and statesmen, if
not a positive new departure from the traditional grooves in which our
foreign policy has heretofore run. We gladly accept it, as far as it goes,
as possibly the manifestation of latent suspicion that, after all, we can¬
not as a nation either afford, from a commercial or political standpoint
to fence ourselves in from tbe rest of mankind or maintain a cynical indif¬
ference to the course of affairs in the great world beyond our geograph¬
ical limits. The " universal Yankee nation " deserves to be something bet¬
ter than a 4th of July flgure of speech, and il Uncle Sam, by peaceful
processes, is to have a colonial prjgeny in tho future wbo does not per¬
ceive that his universality as a matter of fact will be inevitable S—Co/ii-
mercial Bulletin.

The New Markets of the World.

Theparticipation of the United States in tbe Congo International Con¬
ference, and the appointment of a special commissioner to the Congo
country, referred to in iJrarfsfrecCs of September (5, are events of more
than passing interest.    They indicate a change of policy,  and open up
grave queaiions which may'tax the highest order of American statesman¬
ship to elucidate aud shape for the public good.   Indeed, this poli.-y may
be regarded as an entrance into the European circle by the United Statea,
unless it be dropped in de"erencs to the pjiicy of national isolation baaed
upon tbe Monroe doctrine, which was in fact suggested  by Mr.   Canning,
tbe brilliant English minister, to check the aggressive foreign policy of
the great European monarchies.   It defeated the Holy Alliance, but it has
stranded Auierican commerce high and dry ona lee shore during an ebbtide
of trade. Furthermore, adhesion to the Monroe doctrine narrowed the range
of questions wbich American statesmen could handle, and the consequence
is that our public men of this day are far less fully equipped for eniering
upon the broad plane of international politics tban were the founders of
the republic or their immediate successors.    The latter were called up^u
to grapple witb fundamental questions of constitutional government and
to establish political  and commercial relations with   the world at largr.
Since tbe war of 1S12 there have been few questions of international
debate except those arising out of England's attitude during the war of
secession, but that controversy with Great Britain was conducted by men
of a past generation,    Tbe pregnant sign, therefore, of a departure from
established usage by our government in this Congo affair suggests con¬
siderations of policy which no change of administration should be per¬
mitted to obscure or reverse.    The end to ba kept steadily  in view is to
create new markets for American products in the new countries of the
earth.    The markets of Europe are practically closed against ua for two
reasons—fiscal   aod  economic.     Our example is being followed in the
matter of a "protective tariff ' to an extent which in time will amount
to an embargo upon American trade; but apart from this artificial barrier
there is tbe economic one of cheap production  wbich legislation  cannot
touch and which necessarily regulates prices.   This last consideration also
shuts us out of the Asiatic and South and   Central American markets
and restricts our Australian trade to special products mainly.    We must
therefore look to tbe new countries wbich European enterprise is opening
for consuming markets,  and it is therefore the duty of our governmenc
to  protest  against  any  compact or agreement between tda powers of
Europe which would give special trading advantages to themselves.   This
country cannot recognize on the part ot any power a greater clnim to
territorial possessions or commercial and  trading privileges in Central
Africa than tbe United Stales possesses.    Indeed, tor very obvious reasons
the Jnited States should have a controlling voice in shaping the futuro
of equatorial Africa, from wbich so large a percentage ot its labor popu¬
lation has been drawa.    But England and Portugal  have already esta*--
lished   by treaty certain exclusive rights on tha lower Cougo, while lhe
French agent has been elbowing Stanley and tbe International African
Association out of commanding pO'^itions on the lino of  the upper Cougc.
Germany  ha-i likewise come  to an  understanding  with Etigland as tit
trading privileges on the Congo and Niger, leaving the execution of tho
convention to Englaud.     At the   various   Afrbaii   fucLories  or colonies
established by Germany of late, north and souih  of   Congo, the policy
of exclusive  trading will  certaiuly   lie enforced, and as there is still a
good deal of unoccupied territory along the West  African coast, whicb
lies well for American trade, unless our goverumuut acts promptly and
with iiriuuess, wu may tlnd ourselves cut off from  a commercial  field
which promiaes well for the future.    Of conr.se wo may establish our right
to parlicijiate w itliin tbo sphere of the International African Association's
operations, but Ihat is a very limited lield and does nut begin  to cover
anythiug  like   tho uvailuble groiuid.    It  will commit the   Wasbington
giivernuient, however, lo au African policy, and that  in itself is a great
deal.   In  the  Franco Chinese  question and  the  Madagascar affair   tbe
American people are likewiae directly interested.    France has established
a practical monopoly of trade in Madagascar by naeans of partial blockade
and arbitrary quarantine, giving exclueive trading facilities to French
' mercbants,   A eimilar result is certain to follow in Formosa and tbe indo-