THE ECONOMIC DISTURBANCES SINCE 1873. 291 



temporary comments of two English journals, of recognized author- 

 ity, on the course of events in 1872, constitute also an important con- 

 tribution to our information on this subject. Under date of March, 

 1873, the London "Economist," in its review of the commercial his- 

 tory of the preceding year, says : 



Of all events of the year (1872) the profound economic changes generated 

 hy the rise of prices and wages in this country, in Central and Western Europe, 

 and in the United States, have been the most full of moment. 



And the " London Engineer," under date of February, 1873, thus 

 further comments on the situation : 



The progress of events during 1872 will not soon be forgotten by engineers. 

 The position assumed by the working-classes, and the unprecedented demand for 

 iron and machinery, combined to raise the cost of all the principal materials of 

 construction to a point absolutely without parallel, if we bear in mind that the 

 advance of prices was not localized, but universal, and that the duration of the 

 rise was not limited to a few months or weeks, but, having extended already over 

 a period of some months, shows little sign at this moment of any sensible abate- 

 ment. In 1872 scarcely a single step> in advance was made in the science or prac- 

 tice of mechanical engineering. No one had time to invent, or improve, or try 

 new things. The workingraan is setting spurs to his employers with no gentle 

 touch, and already we find that every master with capital at stake is considering 

 how best he can dispense with the men who give him so much trouble. Of 

 course, the general answer always assumes the same shape use a tool whenever 

 it is possible instead of a man. 



The period of economic disturbance which commenced in 1873 ap- 

 pears to have first manifested itself almost simultaneously in Germany 

 and the United States in the latter half of that year. In the former 

 country the great and successful results of the war with France had 

 stimulated every department of thought and action among its people 

 into intense activity. The war indemnity, which had been exacted of 

 France, had been used in part to pay off the debt obligations of the 

 Government, and ready capital became so abundant that banking in- 

 stitutions of note almost begged for the opportunity to place loans, at 

 rates as low as one per cent, with manufacturers, for the purpose of 

 enlarging their establishments. As a legitimate result, the whole coun- 

 try projected and engaged in all manner of new industrial and finan- 

 cial undertakings. In Prussia alone six hundred and eighty-seven new 

 joint-stock companies were founded during the year 1872 and the first 

 six months of 1873, with an aggregate capital of $481,045,000. Such 

 a state of things, as is now obvious, was most unnatural, and could not 

 continue ; and the reaction and disaster came with great suddenness, 

 as has been already stated, in the fall of 1873, but without anticipa- 

 tion on the part of the multitude. Great fortunes rapidly melted 

 away, industry became paralyzed, and the whole of Germany passed 

 at once from a condition of apparently great prosperity to a depth of 



