CHAPTER XIX. PANICS. Two Kinds; Financial and Industrial-First Caused By Why Foreign Markets Will Soon Be Gone, Thus Causing a Glut at Home-Terrible Industrial Panic Inevitable. Panics are the result of one or two causes. The collapse of speculative values and inflated stocks, or over-production. The former, generally called a money panic, is of frequent occurrence, and is generally tided over in a short time with but comparatively serious results. The latter, called an industrial panic, is of less frequent occurrence, but more widespread and serious in its results. A money panic may not be serious enough to affect business and industry. An industrial panic is generally preceded by a financial panic. There is no mystery about financial panics. When stocks have their values enormously inflated; when values are merely speculative; all know and expect these bubbles to burst. All predict and look for it. But an industrial panic is different. It affects everybody; throws thousands out of work; stops the wheels of commerce, and results in general distress and trouble. Instead of it being over-production, as it is generally called, it is really under-consumption. For though the warehouses be filled to overflowing and the poor be needy and starving, yet the latter have no access to the overflowing warehouses or it would be consumed readily enough. Let us examine this closely. Though never before has there been anything like the productive capacity of the American people to-day, the producer is only paid back from one-seventh to one-fifth of what he produces. Is it any wonder then that the markets become glutted? At this rate, only from one-fifth to one-seventh of the vast product is consumed. The balance goes as over-production; it is really under-consumption. Given such conditions as these, the inevitable result is a decrease in the output of all productive enterprises. There being no demand for goods, a shut-down occurs in the factories, mines and shops, and a corresponding decrease of business in the stores and trading places. An industrial panic is the blocking of the wheels of com merce. Even in times of peace and prosperity, this blockade will occur every time the warehouses are filled and there is no outlet, because the consumers haven't the wherewith to buy back the product. Of course, when business ceases, wages also cease. And when wages are curtailed the buying power of the consumer is also decreased, and the panic is further augmented. Well-chosen is the name panic. It describes conditions perfectly. It is as though the populace were placed between the upper and lower mill-stones, for a glut produces low wages, and low wages increases the glut by reducing the consuming power. And then, in addition, work being scarce, fierce competition between the wage workers ensues, and wages are forced to a still lower point. It is just such a condition of affairs that will precede the coming revolution. Later, I shall show how the explosion will be precipitated by a panic; how a financial and industrial panic will be the spark to touch off the powder magazine. But first I wish to consider some objections. It may be suggested that if industrial panics are caused by a glut of the markets, then by finding foreign markets and exporting the over-production, a blockade of business may be averted. This suggestion is well made, and I will investigate it closely. If the vast product we cannot consume be shipped abroad, then a panic might be averted. We will find, first of all, that this is just exactly what England is and has been striving to do for many years past. In fact, all Europe is just as keenly bent on saving themselves from panic by securing foreign markets as America. Next we find that foreign countries that were once fine markets have become producers for themselves. Indeed, it can be shown that many of these countries not only produce for themselves, but have actually invaded Europe and America with their product. And last, there is overwhelming evidence that before long there will be no more foreign market, because the foreign countries will produce more than enough for themselves. If this is true, there is no prevention of over-production and panic. And as sure as the next panic comes, it will be the match to light the fuse that will set off a long train of explosives. But to prove all this. Many think England's passion for territorial conquest is merely a love of acreage, or Empire expansion; or a desire to give other nations wise or better rulers. But not so. Nations are conquered to secure their trade. In this England has been successful, and her wealth has become enormous. The first nation to have over-production, she quickly sought foreign markets. The United States, equally as clever, established a tariff against her. Still she disposed of her product the world over, until the development of machinery, the increase of inventions and the spread of civilization reduced the markets of the world for England. Not many years ago a number of delegates came as representatives of a number of unemployed shoemakers to Lord Chamberlain, then Colonial Secretary. In discussing. the situation with them, he said in part: "What you want to do is not to change the shop in which the boots are made, but to increase the demand for boots. If you can get some new demand for boots, not only those who are now working but those out of employment may find employment. That should be our great object. In addition to the special point before me, you must remember that, speaking generally, the great cure for this difficulty of want of employment is to find new markets. We are pressed out of the old markets (out of the neutral markets which used to be supplied by Great Britain) by foreign competition. At the same time, foreign governments absolutely exclude our goods from their own markets, and unless we can increase the markets which are under our control, or find new ones, this question of want of employment, already a very serious one, will become one of the greatest possible magnitude, and I see the gravest reasons for anxiety as to the complications which may possibly ensue. I put the matter before you in these general terms; but I beg you, when you hear criticisms upon the conduct of this government or of that, of this commander or of that commander, in expanding the British Empire, I beg you to bear in mind that it is not a |