consumer disappears. Speculation takes the helm. Much more is produced than there is corn, leather, or other goods, to exchange for it. The resources of the mills are great; they can borrow from the banks while they pile up their fabrics in their ware-rooms; they can by means of their concentrated capital keep their machinery running, even at a loss, if by so doing they can crush out a rival or manipulate the market.
But in the height of this prosperous run there is a check—no matter for what cause—and suddenly the work stops. There is little sale for goods produced; the fires must be put out, the doors closed, and thousands of operatives are deprived of employment. This would not be so unfortunate if this over-production had been diffused among the work-people. But it had not. Notwithstanding the high pressure and the excessive manufacture, wages have been kept down; while producing in six months as much as could be exchanged in a year, the workmen have not been paid in this way—their wages have been upon the basis of the whole year's work—as a result, they are turned empty-handed upon the street. And, what is particularly unfortunate, they are reduced as consumers to the minimum point. Here the evil works both ways. The excessive production which has shut up the mill has weakened the power of the community to absorb this production—the goose that laid the egg has been slain.
Inevitably the recovery from hard times brought about in this way must be slow. The spindles cannot be set in motion until the stock of goods on hand is reduced and a fresh demand revives; this demand cannot revive because the great body of consumers are in a state of impoverishment. This condition of things is entirely sufficient to explain the genesis and the prolongation of business prostration. Capital is not impaired: it is locked up in machinery that is silent, in goods that cannot be exchanged, in money that has no borrowers. It is the paralysis of consumption that is the cause; and this paralysis has been brought about by an unregulated production, by an excess that is not diffused, by the stoppage of wages, by the idleness enforced upon those who would be consumers, by the absence of an adjustment of production to consumption. Is it not clear that we must have a regulated production; that machinery with its magical facility must be put in check; that we must restore the old cautious and intelligent relation between the two factors of supply and demand?
We read lately a very angry denunciation of a combination between certain mine-owners in Pennsylvania to limit the production of coal. Why? If these men are attempting to make an artificial scarcity, it is wrong, and all attempts of this kind fail; but if they mean simply to regulate the marketing of coal—of coöperating so that an excess of the article shall not be thrown upon the market, and prices forced below cost—they are right. It is better for them to
