Minor alleged causes of Industrial Depressions in the United States, as well as in some other countries, public opinion is divided on the question of high and low tariff. Some believe that high tariff is largely or wholly responsible for our periods of business depression, while others believe that it is the chief cause of our periods of great prosperity. There is nothing in history to support either belief. The revivals of business have come when the tariff was high, and when it was low, and the depressions have done likewise. During a good part of the last century, the United States maintained high tariff, and the other four industrial nations low tariff, and yet the seasons of prosperity and of depression came to all of these five nations contemporaneously. In 1889 out of fifteen nations the United States was second in highness of tariff, while France was eleventh, Germany twelfth, Great Britain thirteenth, and Belgium fourteenth, and these are the five nations which have suffered most severely from industrial depressions. In the United States, between 1897 and 1907, the ups and downs of business were among the largest in history and yet the tariff rates were the same throughout the whole period. The United States with high tariff, and Great Britain with free trade, have been the two nations which have suffered most severely from depressions and have suffered at substantially the same time.

The prospect of early tariff change has undoubtedly had violent temporary effects upon imports, but these violent effects come from the ever-present and instinctive desire for gain. When a dealer knows or believes there will be an early advance in the duty on an article that he  imports, he will make extraordinary efforts to import a large quantity of that article before the advance goes into effect. A notable example was the increase in the duty on tin-plate. Between the passage of the law and the date on which the advance took effect, the demand from this country was so great that the Welsh mills were run to full capacity night and day, and towards the close of the period heavy premiums were paid for fast steamships to land cargoes in this country before the date the larger duty was to take effect. After this, the importations of tin-plate ceased almost entirely. On the other hand, when a dealer knows or believes there will be an early reduction in tariff rates, he will put off imports of the goods affected, as far as possible, until the reduction has gone into effect.

Other Alleged Causes

Then there are a considerable number of causes for depressions alleged, which are untenable because they increase business, whereas depression is a decrease of business. Among this class are: "Large Importations of Goods and Exportations of Gold," "Large Transfers of Money," "Influx of Foreign Capital," "Immigration," "Coolie Labor," "Convict Labor," etc. Let us consider these briefly.

If "Large Importations of Goods and Exportations of Gold" were a cause of depression in the United States, then they should have been a cause of prosperity in the foreign countries, such as England and France, both of which undoubtedly profited by the extravagance of our people; but these countries suffered from depression at practically the same time the United States did.

Importations of goods and exportations of gold are simply exchanges of values. One person wishes certain goods more than the gold he possesses, the other wishes gold more than certain goods he possesses; each parts with something of value for something he considers of more value. To stop such exchanges would lessen prosperity or intensify depression. Examine our exports and imports for a hundred years, and it will be seen that the balance of trade was largely against us almost constantly during the first three quarters of the nineteenth century, in the most prosperous years, as well as in the most depressed, and almost constantly in our favor during the last quarter, during the most depressed years as well as the most prosperous. No connection can be demonstrated as having existed between this alleged cause and the industrial depressions of the last century in any of the industrial nations.

"Large Transfers of Money" brought industrial depression to the country which suffered the loss of the money, as many have claimed, then the payment of the immense war indemnity by France. to Germany, in 1871 to 1873, should have brought industrial depression to France; whereas the depression which occurred in all the industrial nations at that period commenced in Germany
several months before it did in France, and was much more severe in Germany. This transaction was an exceptional case, in that it was a transfer of money without a return of value. The actual result, as revealed by analysis, was perfectly logical, where the real cause of the mysterious industrial depressions is understood. The 5,500,000,000 francs poured into Germany stimulated the building of factories and other permanent improvements to a degree never before experienced. The capacity of the country not being sufficient to furnish the materials to supply this extraordinary demand, prices of construction materials advanced enormously. This abnormal advance in prices brought a sudden and unexpected check to contracts for construction and in due time to actual construction; this threw large numbers of workers out of employment, and put the endless chain of depression causes in full motion. The war indemnity hastened and intensified the abnormal advance of prices in Germany, hence she was the first and the greater sufferer from the depression which followed. In this case the large trans money was a powerful cause of industrial depression; but it did not come in the manner those who advocated this alleged cause imagine, but just the reverse.

Large transfers of money are usually made in adjustment of large transfers of products. They are natural, they promote, they do not retard the industries. The large transfers of money from the cities to the agricultural districts to pay for the crops, and the retransfer of that money to the cities to pay for manufactured products, is a necessity to business; to stop it would almost certainly bring immediate depression. The transfer of money between nations in exchange for values is of the same necessary and healthful nature, and promotes the prosperity of each. "

Influx of Foreign Capital" is another promoter of business and therefore untenable as a cause of depression. The unrestrained flow of capital from one place where there is a surplus, to another place where there is a deficiency, is not only natural but beneficial to both sections. It furnishes needed capital to the pioneers who carry progress to new territories, and yields a revenue to the older countries which supply it.

Immigration," "Coolie Labor," "Convict Labor," and all like things, which in themselves add to business, a thorough analysis shows, cannot be maintained as causes of an industrial depression, for depression is a lessening of business. Additional laborers, from whatever source, may be detrimental to other laborers, when the supply exceeds the demand, but this condition should never exist. When the industrial system is understood and adequately controlled and directed, each additional worker will simply be understood to mean a larger increase in the rate of wealth-producing.

Bad Laws" and "Bad Legislation," like financial panics, may be a cause of industrial depressions, but when they have this effect it is a blow from the outside and is known. Take the Sherman Silver Coinage Law, for instance, passed in March, 1890; the working of this law was clearly the cause of the financial disturbance in 1893, and the financial disturbance had a disastrous effect upon the industries, but the cause was perfectly apparent, there was no mystery about it. What we are endeavoring to indentify is the mysterious and unknown cause which for generations has brought depressions contemporaneously in all five of the industrial nations in the absence of any known or apparent cause. It is altogether likely that all these nations have bad laws as well as good ones upon their statute books, and have had them through prosperous times as well as hard times, but we do not find that they have all had epidemics of bad laws contemporaneously to correspond in periodicity with the industrial depressions from which these nations
have suffered contemporaneously. "Want of Confidence in Government" may also be a cause of industrial depression, or of financial panics, or even of a political revolution; but if it were of sufficient gravity to cause an industrial depression, it would be known, and therefore it must be eliminated from the list as a cause of the mysterious industrial depressions which are the subject of the present analysis. It is, in other words, not a known cause for which we are searching.