ultimately bear rich fruit, is shown by the fact that the cotton-manufacturing industry to-day is probably in a better condition than in any other country, the 10 million spindles consuming nearly twice as much cotton each as the 39 million spindles of Great Britain, as they are kept busier than those of England or the Continent; and the exports of cotton cloth have increased from less than 18,000,000 yards in 1874 to over 126,000,000 yards in 1878, or from $3,000,000 to nearly $11,500,000, at the same time that the Lancashire product is being slowly dislodged from all its chief foreign markets, of which it has hitherto held the undisputed monopoly. Comparing the imports and exports of cotton manufactures in 1873 with those of 1878, there is found an increase in the exports from $2,947,528 to $11,435,628, or nearly $8,500,000, and a simultaneous decrease in imports from $29,752,116 to $14,398,791, or over $15,350,000; that is, the decline in the net imports within six years has amounted to nearly $24,000,000. Measured by quantities, the change will be found much greater, since the average price of American colored calicoes fell during the same period from 16 cts. per yard to 7 cts., and of uncolored from 10 to 7 cts. per yard.

In 1850 the exports of agricultural products constituted 90 per cent. of the total exports. During the next ten years, 1851-1860, they made up on the average 78 per cent. of the whole; from 1861 to 1865 they averaged about 70 per cent.; from 1866 to 1870, 73 per cent.; and in the last five years, from 1874 to 1878, 78 per cent. The figures for the last eleven years are as follows, in round numbers:

The exports of other than agricultural products have not increased in any similar ratio, measured by their values. In 1868 they amounted to $135,000,000; 1869, $102,000,000; 1870, nearly $108,000,000; 1871, $164,500,000; 1872, $142,750,000; 1873, $145,000,000; 1874 $143,000,000; 1875, $163,000,000; 1876, $130,500, 000; 1877, $158,500,000; 1878, $130,500,000.

The apparent falling off within four or five years is accounted for by the general decline in prices, the aggregate quantities of exports having pretty steadily increased. Were there an actual decrease in the exports of American manufactures within the last decade or two, as undoubtedly there has been in certain classes, it would by no means indicate a decline

in American industry. It is a well-known fact that the extension of manufacturing industries has been more rapid, enterprising, and multiform of late years than ever before, and that in the stirring times which preceded the late panic the extension of factories and establishment of new industries, in which all countries rivaled each other, nowhere took place on so prodigious a scale as in the United States. And nowhere was this enterprise so little wasted as here, because by the more ingenious adaptation of mechanical methods to industry, and by the greater industry of its workmen (two American mechanics, it is said, being able to do as much work as three Englishmen), this country was able to hold its own against all rivals; and still more, because the principal vent which it had to seek for its increased production was in its own home markets. America has always been dependent on Europe for several of the main staples of industrial production, as well as for innumerable special lines of articles which can only be produced in the more complex and luxurious communities of Europe. It has been the hope and ambition, the task and the urgent need of America, of late years, to free itself from this commercial dependence. A glance at the list of commodities given below, whose importation has declined within six years far beyond any possible diminution in the powers of consumption, will reveal the rapidity with which the displacement of foreign manufactures, in the great textile and metal industries, is going on in American markets. Every year, even during the present time of comparative inaction and despondency, novel industries hitherto practiced only in Europe are introduced, oftentimes with improved tools and methods suggested by the famous practical genius of the American. The time is already at hand when the dream and hope of the American for generations will be realized, and the United States will supply its own markets with all the leading manufactures which the country is capable of producing. Whether the causes which have accelerated that event will prove to have been evils or blessings, the future only can reveal; for there is no doubt that the movement has been greatly hastened not only by the high protective tariff, which works most oppressively on large classes of citizens, but by the enormous debts contracted in Europe, much of which capital was wasted and misapplied, by the decline of American credit in the money centers of the world, and by the crisis and the epoch of contraction and distress from which business has not yet emerged. Most useful must the lesson of the crisis and its protracted train of distress prove in weaning the mercantile community from traditions which can only be a pernicious delusion in the future. There was a period when high wages, large profits, and dear capital all went hand in hand; but the America of to-day with its vast accumulated capital, its manifold industries, and its great population, has long outgrown that

primitive stage of industrial development, and should range itself with the old and wealthy communities. So the sooner it adopts studious, patient, and laborious methods of business, the more will its welfare be confirmed. Before 1870 capital could not be obtained for industrial operations except at rates varying from 73 to 15 per cent. per annum; the average rate of bank discount for fifteen years before 1860 was 9-12 per cent., at the same time when the rate in the London money market averaged 3.90 per cent., that of the Bank of England 4.02 per cent., and that of the Bank of France 4-6 per cent. Since the crisis the money and investment markets have been constantly flushed with capital seeking employment; lenders have been on the hunt for good securities at 5 or 6 per cent.; $500,000,000 of Government bonds bearing 5 per cent. interest were disposed of before July 1, 1877, and before July 1, 1878, $240,000,000 of 43 per cents, and nearly $100,000,000 of 4 per cents, nearly all being taken up in the United States; money has been loaned on call against collaterals in the New York market

a good deal of the time at from 1 to 4 per cent., the rate never going above 6 or 7 per cent. except in times of active stock speculation, when additional commissions of and sometimes as much as per diem have been paid to carry margins; and prime commercial paper has been marketed most of the time at from 3 to 6 per cent. discount.

The articles of import which have shown the most remarkable falling off between 1873 and 1878 in the quantities imported are textile manufactures and raw wool, iron and steel and their manufactures, copper and brass manufactured and unwrought, lead and tin unmanufactured, timepieces, gutta-percha, and tea. The total decrease in the imports of this list of articles was from $272,259,633 to $124,211,734, a falling off of $148,027,899, or nearly 55 per cent. The decrease in the imports of the articles named constituted 73 per cent. of the total decrease in the imports of all classes of merchandise between those years. The decrease in the several classes of imports was as follows:

being an increase of about 187 per cent. The increase in the values exported of this group of commodities amounts to 64 per cent. of the total increase in American exports during this period. The exports of breadstuffs were over two and a half times greater in value in 1878 than they were in 1868, the increase in quantity being still greater. The value of the total exports of provisions was more than quadrupled, while the average export price had sunk for bacon and hams from 12 cts. per pound to 87 cts., and for lard from 14 cts. to 8 cts. That of live animals increased eight fold, and that of fruits over three fold, the preparation of desiccated and preserved fruit for foreign markets being almost a new branch of trade, as also in that of exporting live animals and dressed meat to Europe. The export of oilcake nearly doubled. That of coal shows a steady increase. The export of petroleum has more than doubled in value and quadrupled in quantity, since the average export price has declined from 29 cts. per gallon in 1868 to 14 cts. in 1878. The export of copper and brass products has more than trebled; in 1873 there was a net import of copper and brass and their manufactures amounting to nearly $3,250,000, while in 1878 the imports were only one quarter as great and the exports four times as much in value as in that year, and there was a net export to the amount of nearly $2,250,000. In iron and steel and their products the exports increased from $6,333,000 in 1868 to $12,000,000 in 1878. Since the opening of the Lake Superior mines the copper production of the United States has grown to astonishing dimensions, so that already in the year 1874 there were 17,548 tons of copper mined; the importation of this metal from Germany and Belgium must cease altogether at an early date.

Since the crisis of 1873 there has been a complaint of bad business and a feeling of doubt and discouragement in nearly all branches of trade and all sections of the country. The depression has been prolonged and widespread, but not so paralyzing as that which has occurred in some other countries. It has had a most injurious effect in producing misery and demoralization in the ranks of the most useful class of citizens, the skilled mechanics of many trades. It has brought great numbers of traders to bankruptcy, who in ordinary times could have held their position. Yet it has had its good effects in compelling the business community to adopt methods of system and economy, and in accustoming them to nccept rates of profit considerably below the standard which has hitherto prevailed, and which are necessitated by the greater development of trade and industry, the larger accumulation of fixed capital, and the sharper competition which must exist henceforward. Since the harvesting of the large crops of 1877, there has been a general improvement in the tone and disposition of the commercial community. The

general shrinkage of values was the most active cause of the stagnation, and was a process which had to be passed through. There is a general impression that the lowest decline in prices has been reached, so that there was much more inclination to resume business enterprises in 1878 than in the foregoing year, and less lack of work for laborers. The signs of recuperation can be traced perhaps as far back as the middle of the year 1876.

The transactions of the New York ClearingHouse afford one of the best available criteria of the volume and activity of business throughout the country, making allowance for the general fall of prices, through which an equal amount of business can be performed with smaller money transfers, and also keeping account of the perturbations of the investment, the stock, and other speculative markets, and all the accidental movements of money which are not immediately connected with the operations of regular commerce. The comparison of the daily clearings of the New York banks shows a gradual improvement since the middle of 1877. In the beginning of 1873 the first week's currency clearings amounted to $128,000,000 a day. In the beginning of February they had declined to $109,000,000, then rose to $130,000,000 on March 10th, and were large and variable until the panic, reaching their highest amount on April 21st, $143,000,000. In the summer they sunk rapidly to $70,000,000 in the week ending August 11th, increasing again to $108,000,000 in the week ending September 15th, and falling off suddenly to 50 millions after the panic. They then increased toward the end of the year, amounting to 86 millions in the second week of January, 1874. They fluctuated between 80, 70, and 60 millions through the spring and early summer, falling off to 50 millions and under in the dog-days, and increasing as usual toward the end of the year, amounting to 88 and 89 millions in some weeks of October and November, and closing the year with 81 millions. The average clearings in 1874 were about 72 million dol lars daily. In 1875 we find a brisker business in the beginning of the year than in 1874, and a higher average for the year, 74 millions a day; but the contraction in trade is reflected in the diminished amounts of the clearings in the latter half of the year, compared with 1874. After the middle of 1875 we find them also varying less from week to week, and more obedient to the usual variations of business at the different seasons of the year. In the spring and early summer of 1874 the diurnal transactions averaged some 80 millions In the autumn and winter there appears to have been less business activity than in the year before. All through 1876 there is marked decline in the volume of the bank transactions compared with 1875. The average clearings were the least of any year, being about 68 millions; in the latter half of the year 1873 they had averaged 623 millions. In 1877 we

find a marked improvement over 1876, a steady and normal flow of noney, and an average through the year of over 69 millions a day settled through the Clearing-House. It must be borne in mind that the monetary transactions represented by those figures are based upon a lower scale of general prices than those which ruled in former years. The aggregate transactions of the Clearing-House were reported for the fiscal year 1876-'77 as 24,663 millions of dollars, against 22,892 millions in 1875 -'76, 24,613 millions in 1874-75, 24, 142 millions in 1873-74, and 36,935 millions in 1872-'73; these include the currency and gold exchanges and the balances paid. The average daily exchanges for each year, ending September 30th, since the first organization of the New York Clearing-House, were in millions of dollars, omitting the fractions of millions, as follows: 1854, 19; 1855, 17; 1856, 22; 1857, 26; 1858, 15; 1859, 20; 1860, 23; 1861, 19; 1862, 22; 1863, 48; 1864, 77; 1865, 84; 1866, 93; 1867, 93; 1868, 92; 1869, 121; 1870, 90; 1871, 95; 1872, 105; 1873, 111; 1874, 68; 1875, 79; 1876, 70; 1877, 68.

Taking the average daily clearings for periods of three months since the beginning of 1873, a steadying and gradual development of business on the new scale of values can be traced from the year 1876. In the winter months of 1873 the average daily transactions amounted to 123

millions of dollars; in the spring, to 116 millions; summer months, 823 millions; autumn, 69 millions. In the winter of 1873-74 the average business was 72 millions; in the spring of 1874, 74 millions; summer, 623 millions; autumn of 1874, 743 millions. In the winter of 1874-75 the clearings were 778 millions a day; in the spring months of 1875, 80 millions; in the summer, 67 millions; in the autumn months, 693 millions. In the winter of 1875-76 they were 72 millions; in the spring, 635 millions; in the summer, 55 millions; in the fall of the year, 65 millions. In the winter of 1876-'77 they averaged 72 millions; in the spring of 1877, 705 millions; in the summer, 615 millions; in the autumn of 1877, 705 millions.

The statistics of bankruptcy form another fairly reliable measure of the good or evil condition of general commerce. Taking the record of failures as a guide, there is a noticeable improvement in business in 1877, and decrease in the number of insolvents and in the aggregate amount of their debts. The total number of failures in 1877 in the United States was 8,872, and the aggregate liabilities $190,669,000, against 9,092 failures with $191,117,000 total liabilities in 1876. The statistics of mercantile failures in the different sections of the country and in the Dominion of Canada are given in the table below:

of profits that have prevailed for several years, and which are likely still to prevail, they could not expect to discharge or support, and that they would thus avail themselves of the privilege of bankruptcy to liquidate or compromise their engagements before they were deprived of that last resort for embarrassed traders. It is a most gratifying and convincing indication of the general sound condition of the mercantile houses of the country that the increase of failures in the first nine months of 1878, among nearly 700,000 trading houses inscribed in Messrs. Dun & Barlow's records, was only about 2,000 over the same period in the preceding year, in spite of this powerful inducement to take advantage of the expiring bankrupt law. The average of liabilities, except in the State of California, was about the same as in previous years. The number of failures in 1878 was no doubt swelled to no inconsiderable extent by fraudulent bankrupts who were able to compromise their obligations at less than their face, though possessing the means of fairly coping with them; in the last sixty days prior to September 1st there were 1,000 more assignments and compromises than in the third quarter of 1877. Of the different portions of the country, the Western States furnish a smaller proportion of loss by bankruptcy than the Eastern, but the Southern and Middle States about the same as the Eastern States. The declension in the market values of corporation stocks and bonds is a trustworthy measure for the entire nominal loss of capital in the United States, or for the whole shrinkage of values. Indeed, it is not far from including the aggregate loss, since, by the peculiar arrangements of American industry, nearly the whole productive capital of the country, except that employed in agriculture, wellnigh all the mining and transportation, and the greatest part of the manufacturing works, are managed by incorporated companies; while the agricultural and merchandising interests themselves are entirely dependent upon the banking and railroad corporations. The settlement of this vast aggregate of associated capital to a basis of value which corresponds to the altered commercial conditions is most essential to the healthful development of business; but this process is necessarily slower than it would be were the capital controlled by a greater number of individuals. Those who have the greatest interest in and the chief management of the companies have it in their power and are prompted to keep up the valuation of this capital to correspond to the original investment or former scale of profits; diminished business or smaller earnings do not affect the prices of shares as long as the dividends are paid, but the payment of the dividends enhances them; even passed dividends do not have their full natural effect in depreciating stocks, as long as the stocks are kept out of the market by combinations, and hopes are held out of the same old rates of profit upon the revival of business.

The whole body of share- and bond-holders feel the keenest interest in keeping up the value of these capitals. The hopes of all the holders, great and small, supplement the efforts of the leading managers. The great bulk of accumulated capital is held under this system, and they could not turn it over to another body of holders if they would. There is a great disquiet and mistrust among the investors. It is plain to many that the greater part of these works were built, extended, or recapitalized on such a scale of cost and prices that they can never return the ordinary profits and interest on the invested capital, and that many of them can scarcely pay the interest on their debts. There is additional doubt and insecurity caused by the secret manner in which the financial interests of the companies are conducted, and not a little disquietude from the numerous malversations and defalcations committed by officers of corporations, which have been computed at an aggregate of $30,000,000 within four years. One effect of the mistrust of corporate securities has been the successful placing of Government bonds bearing a low interest. Another has been the excessive demand for real-estate securities, which has served to keep up inflated values of real estate, great quantities of which have changed hands by the foreclosure of mortgages; the natural effect of this must be a reaction which will tend to keep up the prices of corporate securities. The great mass of investors can not cut loose from the capital in the hands of corporations. The decline of share prices is steadily progressing; in many cases no doubt the fall is much too great already, owing to the temporary arrest of affairs; yet the average depreciation can not yet have reached its lowest mark, nor the standard about which the values must oscillate for the future, unless there is an increase in the currency of the country and a general rise of prices. It is doubtful whether the country would again absorb a large access of paper currency, and the metal currency can only increase very slowly, unless silver is shut out from the European mints and coined free or in large quantities by the United States Government. Disturbance in business and in vested interests must follow upon a sudden increment of either paper or silver currency, and can not be wished by the present holders of property. The great actual depreciation in the values of corporate shares may be illustrated by the fall in the prices of the following list of twenty stocks in the New York Stock Exchange during five years, from January 1, 1873, to December 31, 1877; they are active stocks, which are constantly on the market and frequently change hands, and thus best reveal the real shrinkage of values: Central New Jersey, quoted January 1, 1873, at 105, fell to 144, a decline of 914 per cent., repre senting a depreciation of over 18 millions in its capital stock, whose par value is $20,600,000; Chicago & Alton Railroad, capital stock $24,999,700, fell from 115 to 781, or 363, a depre