Columbia University Libraries Digital Collections: The Real Estate Record

Please note: this text may be incomplete. For more information about this OCR, view About OCR text.

1274 The Record and Guide. Decei. tured goods in Central and South America will remain uncon¬ firmed, or if confirmed inoperative because of the failure of the House to devise the necessary machinery for carrying them out, as is the case at present with the Mexican treaty. We have often urged in these columns that a certain proportion of both the Senate and the Houae, say one-third of each body, should be chosen by a vote representing the whole nation. We want legislators in the Senate and House who will represent not Rhode Island and Nevada, Podunk or Bunkum, but the whole United States. It is localities which are now deferred to, not the nation. Then there is a growing feeling that executive authority must be increased and legislatures stripped of much of their present power. The business of the world is best transacted by presidents, governors, mayors, rather than by hair-splitting and contentious lawyers assembled in legislative halla. The powers given to the mayors of NewYork and Brooklyu and taken from thejildermen of those cities show the tendency of things. In the meandiDe the buyintsa world must make up its mind that there ia no hope of beueficeut 1 egislation from Congresa during the present session. Why Low Prices? The Loudon (Ecgland) Timber Trade's Journal comments at some length upon the controversj'' which the Northwestern Lum¬ berman has had with The Record and Guide on the subject of the low prices now prevailing throughout the world. The Lumberman took the very generally held view that the cause of the trouble was overproduction, while The Record and Guide was of lhe opinion that the depression was mainly on account of the shrink¬ age of tbe metallic basis of the precious metals which measure prices. A first and superficial view of things is very often incorrect. Our senses tell us that the sun rises in the east and sets in the west, while the earth to r 11 visual appearance is a flat surface; but an instructed pereon knows tbat the earth is not fiat, but round, and that it is the earth which rotates on its axis from west to east, thus giving the impression that the sun moves in the opposite direction. How natural then is it when we see elevators filled with unsalable grain and warehouses stocked with goods for which there is no market to say that there has been overproduction? This explanation is so sirnpleand an obvious one that it is generally accepted almost without question in business circles. Hence the efforts to restrict production. There are coal combinations to stop mining, mills cease running, furnaces are blown out, working people are thrown out of employment at the beginning of winter. and capita! accumulates at money centres becausa its owners will not produce on a falling market. But we have held that the trouble is not overproduction of either food or clothing, for it is notorious that iu the best of times the mass of the community have not more than they can eat or wear- Empty stomachs and bare backs are alwaya plentiful in this unhappy world of ours. There was never a time in the history of mankind when there was more food or clothing than could have been consumed if those who needed the gooda had money where¬ with to buy them, Tbis is our contention—there is not sufficient money taking the whole world through to enable the working classes to use up the store of food and raiment which are waiting for a market. We hold that the history of mankind shows that in every period when money has been abundant that trade has been prosperous and no one ever dreamt in these times that there was overproduction. It is also true that when the money supplies have been cut off that the trade of the world haa suffered and goods become unsala¬ ble as the masses of mankind were pinched because of the insuf¬ ficient supply of money rewards for their labor. To make this matter plain we propound the following queries: Ist. Is it not true as a matter of fact that dnring the reign of the early Roman emperors the world was exceptionally prosperous, and at the same time the amount of gold and silverier capita in circulation was unusually large? 2d. Is it not also true that during the Middle Ages Europe suf¬ fered severely from extreme poverty? The religious infiuence of the times was opposed to the mining of gold and silver and the proportion of the precious metals fell off to about $11 per capita. 3d. Is it not also true that the only prosperous communities toward the close of the Middle Ages were the commercial cities Florence, Genoa, Venice, &c., which drew unusual supplies of the precious metals from the East ? 4th. Did not an era of great prosperity follow the Spanish con¬ quest of Central and South America, which resulted in pouring within a few years some $600,000,000 in silver into the channels of trade? Was not the splendor of the reigns of Charles V. of Spain and Queen Elizabeth of England due to the prosperous trade based upon this addition to the money metals of the world? 5th. Did not the discovery of gold in Caiifornia and Australia stimulate wonderfully the trade of the whole earth ? The papula¬ tions of every country were better employed and remunerated be¬ cause of the streams of gold which flowed through all the arteries of commerce. Bth, Was not the demonetization of silver by Germany and the United States in the spring of 1873 followed by a distress¬ ful panic in both countries m the fall of that same year? Other nations were also injured by the fall in prices due to the fact that gold was made the sole unit of value. Tth. Is it not Irue there waa no recovery in values in the United States until the Bland Silver Bill waa passed over President Hayes' veto in the spring of 1878? This rendered possible the resumption of specie payments in January, 1879, which added all the gotd and silver in the country to the paper money previously in circulation. Thia doubling of our currency was the prime fac¬ tor of the rise in prices and prosperous times which followed. We might multiply queries like theae, but does not the merest tyro in finance know that any addition to the currency of the country enhances prices, while every reduction in the money supply brings down values ? We have said nothing in the above with reference to paper issues ; but is it not known to everyone that periods of paper inflation, such as we had for instance during the Civil War, give us for the time an active business and apparent prosperity ? Is not the popular craze about greenbacks due to the new businesa they brought the country in times of depression and peril ? On thia point let us not be misunderstood. We bplieve in gold and silver money and in paper convertible into the precious metals. These we regard as the solid food, the wholesome austainer of the trade of the world. Irredeemable paper currency is an unwhole¬ some stimulant. It acta like the strong spirits which cause a momentary elation to be followed by a painful depression. The business distress the world over is due to two causes^one natural aud the other artificial. The supply of gold has been growing less year by year. This is the natural cause of the depres¬ sion in prices. The artificial cause is the demonetization of silver by the commercial world. At a time in tbe world's history when there is a prodigious expansion of trade and industry we have cut off silver from the task of measuring prices and made our steadily diminishing stock of gold lhe sole unit of value. Hence the crash in prices, which is only auother way of saying that gold has augmented enormously in value. Aud we are only in the beginning of our troubles. Stopping production and starving the working classes is not going to help us at all. If the consuming classes, which are the bulk of our population, didn't have money to purchase the goods produced a year ago they will have still less money to buy goods nest year and the year after. All business men and borrowers have reason to dread the future, for debts con¬ tracted in the past in a cheap currency will have to be paid in a dearer cun-ency. A few days since w^e were told that Austria waa about to resume specie payments on a gold basis. The next news that came was of the failure of the Bohemian Mortgage Company. A panic is shortly in order upon the Yienna bourse. Our English contemporary wants to know what is the remedy ? We answer, the remonetizing of silver by the commercial nations. It is and always ha? been the favorite money metal of mankind. It is almost the only money metal used in Asia and Central and South America. It is the money of retail trade and of the poor in gold nations. Its degradation by the nations has been a blunder, and a continuance of this policy "will be a crime against mankind. ----------•-----— One of tbe dangers of the telegraph system of the country being- in private hands is that news may be doctored to affect the mar¬ kets. A short time since there were reports in the evening papers that a panic was raging upon the Vienna bourse. This was denied iu the morning papers ; but now comea report of an embezzlement of over a million dollars in the Lower Austrian Discount Bank, with au agitated feeling on the bourse in consequence. This is published in all the papers, but the following paragraph is given only in the Herald, being either suppressed by or not furnished to the other morning journals : "The Raubitsehek iron flrm haa failed with liabilities amounting to £55,(jO0, Marco Cohen, of Braila, has failed, with liabilities of £iO,000. His son, S, M, Cohen, of Bucharest, has also failed," The fact that tbe great Bohemian Mortgage Company had failed' was allowed to be made known duriug the week and that thers" was trouble among the savings banks in consequence. The signifi¬ cance of tbis financial disturbance is that it followed fast upon the announcement that Austria was in the market to purchase $250,- 000,000 of gold to resume on a gold basis. Wt^ all recall the panic wliich occurred in this country and Germany in 1873, within six months after silver was demonetized by ours and the German government. A first-class panic is in order in Austria, the effects' of which will be felt throughout the commercial world and which will add to the prevailing distress in the trade of the several nationa. This will account for the suppression of the news by Jay Gould's orders, who feared the effect upon stocks in this market. For¬ tunately a new cable has been opened which is not under the control of the Gould syndicate. The Mackay-Bennetc company