icle said that "for the greater part of two days it was impossible, except through favor, to get money at any price on any security. We know a party who went to fifteen of our associated banks to borrow on governments, offering twenty-five per cent margin, or more if required, and could obtain nothing." The banks issued Clearing House certificates as they did in 1873 but there was no suspension of payments. Yet the Wall Street panic did not, as I have before stated, usher in a commercial crisis. The failures occurred when the business decline had nearly touched bottom and not during a period of extravagant inflation as was the case in 1873. But, referring again to our barometer, pig iron continued its downward course and bountiful crops failed to arrest the prevailing tendency. Being engaged at that time in the mining of coal and manufacture of pig iron I wrote in a trade circular under date of October 1, 1884: Within the past month the Indian corn crop has reached maturity and we may certainly rejoice in a yield of not less than 1,800,000,000 bushels which is the largest crop we have ever grown. We also have 500,000,000 bushels wheat and the same amount of oats. The yield of cotton cannot now be exactly determined but enough is known to be able to say that the cotton crop will be larger than it was last year.1 Surely this is a fine showing for our agricultural Statistical Abstract for 1906, 1916, 545, 709, 710. industry. Nevertheless from present appearances the question as to what we should do with our surplus wheat is a serious one. The two great importing countries are France and Great Britain, both of which countries have likewise had good crops. France will probably not import a large amount of grain or flour; the Mark Lane Express estimates that Great Britain will require the equivalent in wheat and flour of only 128,000,000 bushels of wheat. Our own surplus will be considerably more than that but Great Britain will draw a portion of her supplies from Russia so that the present prospect of marketing our whole surplus is not good. It is this condition of the grain trade that induces the pessimists to say that not only have we too much pig iron but we have too much wheat and that this boasted large crop is no blessing whatever. Never was there made a more specious statement and, as some may be misled for a moment by its plausibility, it is worth our while to inquire whether there can be, from the nature of things, any such parallel between manufactured and agricultural products. We maintain that in the long run there cannot possibly be any over-production of grain or staple articles of food. There is practically no limit to the production, for instance, of pig iron or steel rails. When the consumption has increased beyond the production, we have seen during the past five years how soon American ingenuity and enterprise could supply the deficiency and how little while it was before the capacity for production had increased to a point clear beyond any possible actual consumption. It is obvious however that no matter how many acres may be tilled or how many men may be engaged in farming, there is a natural limit to agricultural production. From seed time to harvest is a period varying from four to nine months and the fruits of the farmer's labor are dependent on causes over which the most diligent and foresighted man can have no control. Frosts too late in the spring or too early in the autumn, too much or not enough of rain may practically mar a season's work. It is bad weather that causes the failure of a crop in Europe or the United States and not the lethargy or idleness of the tiller of the soil. These are trite and self-evident truisms but have been in some degree lost sight of, as for the last three years the grain growing world has produced large crops of wheat and wheat to-day is lower in London than it has been for one hundred years. Keensighted, rather than far-sighted men, jump at once to the conclusion that there is a big over-supply of wheat and that there can be no relief without a curtailment of production. Pessimistic philosophers assert that one important occupation of this country is gone; that it was a large part of our business to feed Europe with wheat and flour; that for this were our railroads constructed, our steel works erected and our blast furnaces built. We do not believe that there is sufficient ground for any such gloomy forebodings. Malthus, eighty years ago, published his book wherein he demonstrated that "Population has a constant tendency to increase beyond the means of subsistence." His doctrines have been accepted by most of the modern school of political economists, and any one familiar with the crops of the world, and the course of the grain markets for one or two decades, cannot fail to see that Malthus announced an immutable truth that three years of great plenty cannot contravene. It follows then that the average common sense of the people is correct when it always welcomes a bountiful agricultural yield and refuses to see that anything can be so disastrous as a short crop.1 Shortly before Cleveland's inauguration the Minnesota and Dakota farmers had hardly realized cost for their 1 This point can be illustrated by statistics of crops and average prices of cereals during, before and after 1884: 42.4 571,302,400 32.7 583,628,000 27.7 1883 421,086,160 91.1 1,551,066,895 1884 512,765,000 64.5 1,795,528,000 35.7 1885 357,112,000 77.1 1,936,176,000 32.8 629,409.200 28.5 1886 457,218,000 68.7 1,665,441,000 36.6 624,134,000 29.8 1887 456,329,000 68.1 1,456,161,000 44.4 659,618,000 30.4 1888 415,868,000 92.6 1,987,790,000 34.1 701,733,000 27.8 1889 490,560,000 69.8 2,112,892,000 28.3 751,515,000 22.9 The export of domestic wheat as wheat or flour during the fiscal years corresponding was as follows: For the seven years, 1883-1889 inclusive the United States produced 20 per cent of the world's crop of wheat. For the eleven years from 1880 to 1890 inclusive Great Britain bought 45 per cent of her wheat and 70 per cent of her wheat flour from the United States. The 1884 crop was not equalled during the decade, nor did the price fall as low. The 1885 crop was the smallest during the decade. The area of wheat in spite of the low prices continued about the same. Evidently the farmers were not sufficiently dismayed by the low prices and talk of over-production to abandon the cultivation for other crops. |