THE BUSINESS SITUATION.

MEN are often indifferent to that which most intimately concerns their welfare. It may be safe to say that the average reader takes but a passing interest in the progress of legislation in congress. He is apt to look upon such matters as concerning only the legislators and politicians. At least he realizes but seldom that his own personal interests may be very deeply at stake. Occasionally, however, the truth is brought home to him in a forcible manner. Thus, when the factory, the mill, or the business house is closed, and he is told to wait for work until his employers can forecast the effects of pending changes in the tariff, or when his wages are cut down and he is told that the full rate will be paid if the tariff schedules on the goods he manufactures be fixed at such and such a point-then it is that he begins to realize that the tariff question is after all something in which he has a direct, personal concern. It trenches upon his most cherished interests, and touches him at one of his most vulnerable points-his pocket. In truth there is no subject of legislation which more directly affects the country than that of the tariff. Its influence reaches the most minute transaction in business at home and in trade with the nations, and upon it depends in greater or less degree the ability of every wage earner to make an honest living for himself and provide his family with the necessaries, not to say the luxuries, of life. If any object-lessons were needed to impress this truth, an abundance could be drawn from the conditions prevailing in the business and industrial circles of the United States during the past year. Stagnation, with somewhat grave apprehensions as to the future, have continued far into the present year, and will continue to some extent until legislation on the tariff issue has been definitely settled. Even then the new duties will change the relative positions of the domestic and the foreign manufacturer, and will bring some changes in prices and in the direction of trade. In some branches, particularly the trade in the textile goods, and especially the finer cotton and woollen goods-these changes will be more marked than in others. It is possible that they may be less far-reaching than the Republican politicians declare; but it is universally admitted that some readjustment will come. And in the meanwhile dealers, agents, jobbers, and all middle

men restrict their purchases and confine their operations to orders in sight, waiting until it becomes possible to know what duties will be imposed, and how they will work.

From a business point of view, the first quarter of 1894 has been most remarkable in many respects. During January and February, it witnessed a continued enormous shrinkage in the volume of trade, continued accumulation of vast sums of idle money in the banks, an unprecedented falling off in domestic consumption, and the prevalence of extremely low prices in general, wheat and silver touching the lowest points on record. During March, with the approach of spring and the exhaustion of stocks, there have been signs of increased demand and reviving confidence; but on the whole the volume of trade is much smaller than it was a year ago; low prices still generally prevail; and it becomes more and more apparent that the return to wonted prosperity will be slow and gradual.

During January and February business was in some respects less satisfactory than during the worst months of the late panic. In July, 1893, when banks were failing by the score, the decrease in all clearings was but 10.6 per cent, and in August only 25.9 per cent, compared with the same months a year previously. In January and February, 1894, however, the decrease in clearings compared with the same months of 1893, was over 30 per cent; while the decrease for the whole quarter stood at about 34 per cent. The following table shows the daily average of clearings in millions of dollars for the past six years:

Railroad earnings show a similar decline; and these indications of a general character are sustained by the records of different industries. The weekly output of pig iron was actually larger on August 1, 1893, when the panic was at its height, and when great strikes were arresting work in many places, than it was on February 1 of the present year. The decrease in February as compared with last year was about 45 per cent; in August it was only 31 per cent. In woollens, boots, and shoes, there was

more buying from retailers and more disposition to buy by merchants during last midsummer than there has been on the whole during the present quarter. This diminished consumption, due to an actual decline in the purchasing power of the people or a change in their habitual mode of living for the sake of economizing resources, accounts in part for the fact that the prices of almost all products are lower than in the worst months of the panic. Wheat has gone much lower; textile goods are all lower; and iron and steel products are much lower.

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Perhaps the most significant feature of the situation has been the remarkable shrinkage in the consumption of wheat. Until within the last twelve months there had not been noticed during thirty-one years any material decrease in the consumption of this article. In the five years 18637, the consumption averaged 4.024 bushels per capita; from 1868 to 1874 inclusive it averaged 4.343 bushels. Even in the next three years, 1875-7, during recovery from the panic of 1873, it was 4.303 bushels. Between 1878 and 1882 it averaged 4.614 bushels; and between 1883 and 1891, 4.645 bushels per capita. During 1891 and 1892 there was no indication of a decline; but during the past year it is estimated that the consumption fell about 60,000,000 bushels below the normal quantity, which would reduce the average per capita to 3.78 bushels. About the middle of February the price dropped to the lowest point on record, and on the 16th of the month a new low record was made, when May wheat on the Chicago market touched 57 cents, and on the New York market, 623 cents. It is stated that the value of the wheat crop of 1893 to the farmer has been 26 per cent below the poorest crop known in fifteen years. A partial explanation of the fall in price is found in the favorable reports circulated as to winter wheat, the revival of the anti-option crusade in the United States, and the fact that Europe is increasing her takings from India, the Argentine Republic, and Russia; but the central truth remains, that the purchasing power or disposition of the people has immensely declined.

Strangely enough the fall in wheat was simultaneous with a remarkable fall in silver, which went down to about 29 pence per ounce in London, the lowest point ever reached up to that time. The price further declined, until about March 1 it stood at 27 pence per ounce. During February, the decline was 3.18 pence, or over 10 per cent; and, as compared with January 1, the price on March 1

showed a decline of 4.50 pence, or 14.3 per cent. Altogether, during the past year, the decline in the value of silver has been nearly 30 per cent. This is accounted for by the stoppage of silver purchases in the United States following the repeal of the Sherman law; by the prospect of the imposition by the Indian government of an import duty on the metal, and the withdrawal of the artificial support to the rupee, which the Indian authorities attempted by setting a fixed price on Indian council bills; and by the recent enormous shipments of the metal from the United States, the amount exported from New York City alone during January and February being $7.359,122.

In other important commodities besides wheat, the decline of domestic consumption is remarkable. Thus the sales of wool in the chief markets, mainly of the domestic article, from May, 1893, to March, 1894, decreased from 269,000,000 to 147,000,000 pounds, and the foreign imports from 125,820,235 to 51,380,439 pounds. The consumption of iron began to decrease largely in July, 1893; and, for the last half of 1893 and the first two months of 1894, it has been about 3,320,000 tons, against about 5,864,000 tons in the same months of the previous year, a decrease of about 42 per cent. In the cotton trade, the condition is more favorable; but an indication of great decrease in consumption is found in the fact that from July 1, 1893, to March 1, 1894, Northern spinners took only 1,200,748 bales against 1,466,173 bales the previous

year.

Another conclusive proof that the improvement in business has been but slight, is found in the enormous increase in the amount of idle money held by the banks, the New York banks alone holding about $250,000,000, and there being a great decline in the amount of loans. There has at the same time been a great shrinkage in savings banks deposits, workingmen in large numbers being compelled to trench upon their resources. Thus, on January 1, 1894, the total of deposits in the savings banks in New York was $617,089,448.98, as compared with $629,358,273.62 on January 1, 1893, a decrease during the year of $12,268,824.64. Returns also show that the income of the government has fallen off about as much as the income of the people. Customs receipts in March were 41.2 per cent less than last year, and the decrease in all revenue was about 25.5 per cent.

Still another indication of the great decline in the

purchasing power of our people is found in the returns. of foreign trade. Imports have very largely fallen off, and there has been a shifting of the balance of trade to the amount of about $30,000,000. In the five months ending with November, 1893, including the whole period in which the panic especially affected foreign trade, the excess of exports of merchandise and specie over imports was only $81,872,068. But in the two months of December, 1893, and January, 1894, the excess amounted to $90,704,788. The falling off of imports in January, 1894, was $22,700,000, or about 30 per cent. In February, 1894, the decrease of imports was $24,072,000. The following are the figures for February, as compared with 1893, in both exports and imports:

During March, the impression has come to prevail, that the tide in the industrial depression of the country has at length been turned; and although it is admitted that improvement must be gradual, it is thought to be assured. Those who are inclined to take the brightest view of things, base their hopes on the noticeable decrease in the number of failures, the slight improvement in railroad earnings, the gain in bank clearings, the strengthening of credit, the improvement in collections, the prospects of good crops, and the increased distribution of merchandise in the quickening of spring sales. During the last week in March, the record of failures, for the first time in many months, fell below that of last year. The exhaustion of stocks by the recent enormous curtailment of production and imports, would seem to indicate that approaching consumptive demands must soon restart the wheels of industry. These demands are already increasing, and the low prices for materials and wages are already stimulating capital into the consideration of new enterprises.

While these encouraging signs can be noted, it is also true, on the other hand, that the material improvement in the general conditions underlying business has been but slight. Prices are still so low in general as to be very unsatisfactory to producers, this being most noticeable, perhaps, in the case of farm products. The agricul