The salient features of the business situation this week afford every encouragement to the promoters of new schemes and the pioneers in industry. Among the additional factors which will stimulate trade and business during 1890 are the following: The construction of fifty per cent more railway mileage than was built last year; a very great increase in lake tonnage; a large increase in inland water-way tonnage; a very great increase in rolling-stock; a greater increase in locomotive capacity than has been made during any one year in our history; greater activity in house-building, and greater activity in the building of shops and factories. Several other interesting features also deserve mention, among them the very strong probability of the establishment of a larger number of banks daring 1890 than were established during 1889 or any previous year; the more rapid expansion of the building and loan association system, particularly in the newer States; the increase in the output of the gold and silver mines of the West and Southwest; the opening-up of valuable coal-beds in many localities, which will tend to the establishment of little industries; a great increase in the area of land devoted to agriculture. Speaking generally, the agricultural interests will be stimulated. Speaking prophetically, it is very probable that prices will continue to advance, but by infinitesimal degrees. Speaking conservatively and in the light of recent experience, it is safe to assume and assert that production will be evenly gauged to consumptive requirements. Those who have kept a close eye upon the operations of manufacturers in all the leading channels recognize one very gratifying feature, and that is, that they are protecting themselves against unwarranted and unexpected advances in the cost of their raw material by making purchases for future requirements, ranging from three to six months. Users of cotton and wool are largely doing this; so are users of iron ore and iron and steel, as well as users of lumber, stone, cement and building material generally. This general policy of providing for legitimate future requirements is one of those instincts which safely guide the commercial world out of danger into safety. One fruitful source of panics in former periods of activity was the failure of consuming interests to supply themselves with raw material to complete their contracts. The business world has learned wisdom from its experience, and is now quietly turning a corner and wheeling into line safely early in 1890. The tanning interests of the United States have pursued this course in their limited field. The boot and shoe manufacturers, if they have not bought largely of raw material, have, at least, taken such steps as will guarantee them against a sudden advance. The clothing manufacturers have wisely purchased for their future wants; in fact, in almost every avenue of activity this policy has been pursued. The users of Lake ore have already bought five and one-half millions of the seven or eight million tons of ore they will want this year. The users of steel blooms and billets have bought so far ahead that manufacturers are now declining to make further contracts, excepting for very strong reasons. The Southern pig-iron makers are debating with themselves whether they will accept orders for pig-iron to be delivered next summer or wait a few months. Scores of illustrations of this sort could be enumerated. In many quarters this policy is believed to be an unwise one. Experience has shown it to be a safe one.
The iron industry, as a whole, is on a very permanent foundation. Manufacturers are hurrying to complete new works; lumber manufacturers, especially throughout the South, are stimulated to the greatest exertion by two new causes: First, a strong demand throughout the North for the superior lumber-mill products of the South; and second, a wonderful expansion of local demand in the South arising from the new industries there. The makers of nearly all kinds of machinery are busy with new work, fully one-half of which is for delivery in the new Southern or Western States. The manufacturers of steam-pumps, the manufacturers of appliances for new fuel-gas processes, the builders of heavy machinery for steam and electrical purposes, the manufacturers of hoisting-machinery and of machinery for mining purposes, as well as of machinery for general shop-use, have been booking more business since the 1st of October than their present shop-capacity will allow them to execute. Consequently, a general system of enlargement is in progress. Contracts have been lately given out for the construction of machinery to make machines of larger than usual dimensions. Our industries are being reorganized, and instead of engines of five, ten or fifty horse-power, engines of fifty to five hundred horse-power are now common. Agricultural operations are conducted by the aid of machinery upon a larger scale, and within the past six months a score or more of establishments for the manufacture of agricultural implements have been equipped with machinery, and facilities in the Western States, that indicate more clearly than anything else can do the magnitude and scope of our agricultural interests. Last year the rolling stock of the railroads was increased by some 54,000 freight cars, but it is probable that the additional orders this year will reach 100,000. The managers of several of the Western railroad systems have decided to erect repair-shops along their various systems, by which repair work and new work can be more expeditiously and economically done. The springing up of so many little industries along these new lines is creating local markets for farm-products. Last year the opening of coal mines, to the number of about sixty, promises a sufficient supply of coal to these new communities at a low cost. These encouragements are stimulating the outflow of population from the older States, and it is this outflow, coupled with the better conditions for living in the West through the development of industries, that is equalizing in such a healthy and natural way the great manufacturing and agricultural forces. By this growth of little industries, mechanical, mining and railroad, the decline in the value of farm-products is checked, or possibly altogether prevented; or, at least, the demand arising from this cause enables the farmer to obtain the very best possible price for what he has to sell. It is not out of place, at the opening of the year, to briefly direct attention to these forces acting beneath the surface. The manufacturer and merchant have nothing to fear from hidden destructive agencies. During the past two or three years several threatening commercial evils have arisen only to disappear by a self-correcting agency which seems to develop itself at the right time. The merchants and manufacturers of the New England and Middle States will find, this year, a much more valuable market west of the Mississippi than last year. The increasing demand for all kinds of raw material there during the past few months is a sure indication of the growth of a great market for the shop-products.
S.J. PARKHILL. & CO., Printers, Boston.