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.

130.0 The Record and Guide. December 37, 1884 car to rival the speed of a locomotive. As a nation we are in danger of committing a similar folly and go ahead with this preposterous Nicaraguan scheme. Oui* Prophetic Department. Mr. Hopeful—It seems to rae that the prevailing view of things is altogether too gloomy. Everybody one meets is in the dumps. Inquire of anyone in any business and you will find that the com¬ ing year is set down as promising more distress than any year we have had since the panic of 1873. Even your forecasts. Sir Oracle, are tinged witli melancholy. SiB Oracle—Well, I confess to being something of a pessimist so far as the near future is concerned ; not because matters are really so desperate, but on account of the general lack of comprehension of the cause of the trouble and the obliviousness of the government and financial authorities as to the proper means of bringing about a better state of affairs. Mr. Hopeful—It is not natural for the average man with health¬ ful blood in his veins to be without hope. Americans, especially, are natural bulls. Now, whatever the natural advantages there may be in the situation will be dwelt upon by everyone in busi¬ ness. "Hope springs eternal in the human breast," On looking :iround us what do we see? To begin with, the most abundant crops ever grown on this planet. Wheat goes begging, corn is within a few cents of the lowest price ever known. Oats and the other small grain were never so plentiful. Cheap corn is going to give us by and by more hogs and lard than we can consume. Meat, for the first time in many years, is actually being reduced ip price. Then the machinery for supplying all human wants in the way of raiment was never so efficient. Now, with these general conditions I cannot believe that the world is going to Buffer. Surely, it is not scarcity and high prices, which in the long run are a benefit to mankind. Sir 0.—You are quite right in supposing that good crops and cheap production are in the long run a good thing, but certainly the course of prices for the last four years on the downward track has impoverished the rich and brought suffering to the poor. Pro¬ ducing on a falling market necessarily causes lOris to all who grow, manufacture or sell. With you I am inclined to believe that early next year there will certainly be a better feeling in the stock mar¬ ket. But I see no hopeful sign in the general trade of the country ; the shrinkage iu prices must go on. A good summary of the sit¬ uation is contained in the following extract from a recent circular of John A. Davis & Co., every word of which is true : The purchasing power of money, as applied to breadstuffs, bas increased to sucb an extent as co throw the ordinary relations of trade out of geir. The farmer gets but httle more than half as much for a bushel of wheat as he got a year ago. It is clear tbat be cannot pay as much for labor, for freights, for groceries, (or luxuries as he paid a year ago. He can bring down tbe price of what be buys most effectually by going without it. Going without on a large scale reduces the demand; supply presses and prices fall. This Is tbe nature of the great readjustment in progress, Tbe purchasing power of money has risen rapidly on breadstuffs. It is rising slowly on everything else, and the movement will continue until equilibrium has been restored. The price of anthracite coal must fall; the wages of labor must be lowered in the mill, at the workshop and on the farm. Rents must be reduced to meet lessened incomes; lower rents will bring a fall in real estate. Railroad freights must be lowered; divi¬ dends must be cub down and capital must be satisfied with smaller returns on investments. Just wbenand where tbe balance will be restored is not clear, but we fear tbe year 1885 will not see the eud. The significance of the above is the admission that the prime cause of the depression is the increased purchasing power of money. The financial and commercial worlds have agreed that sil¬ ver must be discarded as a money metal and that gold, which is diminishing in quantity, shall bejthe aole measure of value. This augments the purchasing power of this one metal and hence the distress in trade over the whole surface of the planet. This is a splendid thing for those who control the gold or are in possession of all forms of debt, government, corporate and individual, for they must be paid in a metal which has immensely increased in value since the debts were contracted. Yet nearly every daily and finan¬ cial paper in the East practically upholds this gold mono-metallism, which is the cause of nearly all our woes, and never tire of ringing the changes upon the wickedness of coining or using silver. Nearly all these papers have been half ruined by the shrinkage in prices, which extends to their own issues and their advertising columns, yet the howl against silver is kept up unceasingly. What dis¬ heartens me is the utter incapacity to appreciate the prima cause of our troubles by the classes most injuriously affected by it, which includes every business man, producer, debtor and laborer. Mr. Hopeful—But surely low prices are not bad things in them¬ selves? Does it not teach every one the lesson of economy and prepare business for a new departure because of the decreased cost of production? Sir 0.—Well, we may console ourselves in that way perhaps, but you have read the history of prices in vain if you have not found out that the _bulk of the race ia always happier when prigee are ad¬ vancing than when they are declining. In the one case the wheels of commerce are kept in motion, in the other they aie checked or stopped. Show me a nation where wages are low and prices cheap and it will prove to he a backward one, lagging in the rear of civil¬ ization, but a well-paid laboring class and high prices is an assur¬ ance of prosperity and a superior civilizatiou. Mr, Hopeful—What other discouragements do you experience ? Sir 0.—Well, look at this matter of our commercial treaties. Their object is to extend our commerce and open new markets for our surplus goods. A few selfish interests object and the negotia¬ tions come to a standstill. The very representatives of our com¬ merce in New York are the most bitterly opposed to anything that will give us foreign'markets or create a demand for new ships. We are without a navy, and the|Senate justly thinks that new cruisers should be built and that some guns should be constructed for the defence of our seaports ; but a Democratic House objects, and, so far as the press is concerned, it seems to endorse the do- nothing policy of the Representatives. Yet any tenth-rate naval power could inflict damage upon us of flfty times the pecuniary value of the cniisers proposed. Public works of all kinds are needed for the defence of the nation and the improvement of its harbors and waterways and incidentally to employ labor now in distress. Yet where is the popular demand to put a stop to our preposterous debt-paying policy and the using of Lhe money so wasted in pro¬ ductive outlays for needed improvements ? YeS, I confess to being discouraged. —-------•---------- The House of Representatives has passed a bill making the head of the Agricultural Bureau a cabinet officer. This is in response to a demand from the South-and West. Ths Eastern press object, but it is hard to see upon what ground. Indeed there is very little reason iu their arguments, the proposed new department being rather an object of ridicule. But there does seem mauy substantial reasons why the greater interests of the country should be represented in what is really the chief exec¬ utive council of the nation. The trade and prosperity of the United States depends primarily upon its agricultural produc¬ tions. We give a seat in the cabinet to a Secretary of the Navy ; but we have no navy, nor shall we have anything worthy of ^the name for ten years to come. Then our trivial military force is the merest apology for an army, aud yet we give this smallest of interests a seat in the cabinet, with the title of Secretary of War. Now in times of civil strife or foreign war it is quite right that the President shouM have advisors and helps in managing the army and uavy. But we have not made a business in this country of war, nor are we likely to do so. With us everything depends on agriculture. A really ideal cab¬ inet would include a Secretary of Labor, one of transportation, another of commerce, one of manufactures and mining, as well as a minister of education. But the War and Navy Departments could with advantage be consolidated into a Department of Pub¬ lic Defence, with two bureaus. In other words, as this is an industrial age, the chief execu¬ tive council of the nation should represent all its larger interests. This is in the line of the development of modern communities. There was a time when kings endeavored to perform all the functions of modern cabinet ministers, but in the evolution of nations ministers of State, financial ministers, ministers of jus¬ tice, of war and the like made their appearance, thus following the well known law of differentiation. Compare the cabinet of Queeu Victoria for instance with that of Harold or Canute, and it will be seen how much more representative of the powers and industries of the nation is a modern cabinet compared with ancient kingly rule. Some time since we ventured an estimate that the depressed times would.lower the means of the consuming classes by some $60,000,000 per week—that is over $3,000,000,000 per annum. We argued that there are at least 12,000,000 persons whose incomes would be lessened in the aggregate one-third by the shrinkage in prices, the smaller demand for labor and the reduction of compen¬ sation. We made this estimate to show what might be expected by the wholesale trade of the country until business revived. Bradstreet's has been collecting statistics showing how many people have been deprived of all employment throughout the manufactur¬ ing district of the country. Its figures are to the effect that some 350,000 of the wage-receiving class in the manufacturing regions are entirely out of work. Of course this cannot be half the real number, for this estimate does not take into account the workmen in smaller establishments. Catling these 150,000, we have 500,000 entirely out of work in manufacturing alone, Estimating their wages at $10 a week, and the average must be higher, we have a total of $5,000,000 which these unemployed workmen no longer spend in the retail trade establishments. This would be at least $250,000,000 per annum, without taking into account the lack of employment in other than manufacturing businesses and th^