A large proportion of the failures classified as miscellaneous may be characterized as miscellaneous manufactures, including, as they do, makers of patented articles, novelties, and specialties not strictly under any class given above. Commenting on the fact that the number of business failures in the United States in 1883 shows a large increase when compared not only with 1882, but also any preceding year, with the exception of 1878, Bradstreet's "Journal" explains that this exhibit is less startling when more closely examined. The number of legitimate trading concerns recorded in the Bradstreet Agency at the close of 1883 was 838,823, as compared with 548,180 in 1873, a gain of 290,646 in ten years. In 1878, at the end of a five years' depression in general trade, there was but a moderate gain in the number of business enterprises, while now the total number of traders having a distinctive place in the commercial and industrial community is 50 per cent. greater than ten years ago. Fully 60 per cent. of this development in trade has taken place since 1878. The expansion in business, extending over 1880 and 1881, was very great, and competition was keen, resulting in a continuous increase in the number of failures from year to year. The "Journal" says: The enforced contraction in production during the past two years, shrinkage in prices, abuses of the credit system, and competition for the survival of those firms which could work at the least expense and otherwise to the best advantage, have all tended to Thus, with from 180,000 to 200,000 new competitors crowd the weaker trader or manufacturer to the wall. within five years, the arrival of a period of enforced contraction of production, distribution, and prices, with a commercial obituary list of some 300 less than in 1878, can not be regarded as indicative of a radical unsoundness in the present business situation. As heretofore, the list of failures given includes none which have been the outcome of purely speculative dealing as a distinctive occupation. From this analysis some so-called business failures have been inten tionally omitted as in no way forming a part of the mortality list in the legitimate commercial world. It should be borne in mind that it is a general rule with failing traders to swell the aggregate of liabilities in the event of disaster. We have previously defined a failure as that which has to be considered as a matter of record in the regular conduct of business of a mercantile agency. In preparing a list of mercantile traders it will be recalled that planters, other agriculturists, and those engaged in professional occupations, are necessarily excluded under the above definition. The statistics for 1883 show two other noteworthy results: First, that the average proportion of indebtedness offset by available assets is larger than ever before, amounting to 52 per cent. Second, that there has been a striking increase in the percentage of liabili ties. This increase, with the increased per cent. in the number of failures during the past three years, has been as follows: IN THE AGGREGATE. Increase per cent, of number of failures.. Increase per cent. of liabilities.. 1,300 failing traders' liabilities were between $10,000 and $25,000; that in the case of more than 500 the debts were from $25,000 to $50,000; that 300 of the failures had debts from 1883 1882 1881 1880 $50,000 to $100,000 each, and that the liabilities of less than 160 were from $100,000 to $500,000 each. The record of more than 10,000 business failures in 1883 is robbed of con 29 85 88 83 84* 22* The average amount of liabilities per failing trader in 1883 was about $17,000; in 1882 it was $12,212; in 1881, $12,800; in 1880, $13,131; in 1879, $14,970. "The general improvement," says Bradstreet's "Journal," "in the record of 1880 as compared with 1979, as shown above, was fully offset by the increased mortality and losses in liabilities taking place in 1881. The number of failures from the latter date has increased in a like ratio in both years (1882-'83), but the increase per cent. of liabilities is strikingly large in 1883, the gross indebtedness of 1883 being nearly double that of 1882. There have been 33 failures during the year with liabilities aggregating $37,000,000. With these omitted from the list, as being due to special causes, the increase per cent. in liabilities (total) in 1883, as compared with 1882, drops from 88 per cent. to 33 per cent." Grouping the returns, as to average individual indebtedness and ability to liquidate, by geographical divisions, the exhibit is as follows: TO EACH FAILING TRADER. siderable of its apparent force by the fact that nearly 90 per cent. were of business houses which owed each less than $25,000, and that the liabilities of six sevenths of the total so specified owed each less than $10,000. Not included in the above review are the thirty-three heaviest failures, the liabilities of each exceeding $500,000. Of these, ten showed liabilities from $500,000 to $600,000 each; five, from $600,000 to $700,000; four, from $700,000 to $800,000; two, from $800,000 to $900,000; three, from $900,000 to $1,000,000; five, from $1,000,000 to $2,000,000; two, from $2,000,000 to $3,000,000; one, $3,421,000; and one, $7,509,000. The failures in which the liabilities reached $1,000,000 were these: 1,250,000 2,000,000 Levy Brothers & Co., wholesale clothing, New York. 1883 1881 1879 1883 1881 1879 41 James Marshall & Co., iron man ufacturers, Pittsburg, Pa.... 41 George William Ballou & Co., 53 51 55 54 C. W. Copeland & Co., wholesale] boots and shoes, Boston.. 47 64 45 In New England.. 24,133 11,765 16,433 89 In New England, the record of commercial disaster during the year was 1 in every 61 engaged in business; in the Middle States, 1 in 104; in the Southern States, 1 in 69; in the Western States, 1 in 99; in the Pacific States, 1 in 30; and in the Territories, 1 in 15. For the country in 1878 the average was 1 failure for every 56 in business. The average throughout the United States in 1883 was 1 failure for every 82 traders. At least 76 per cent. of the whole number of failures in 1883 were those in which the liabilities amounted to less than $10,000. But 13 per cent. of the whole number had liabilities ranging from $10,000 to $25,000, and about 5 per cent. were individually indebted from $25,000 to $50,000 each. The proportion of failures in which the liabilities amounted to from $50,000 to $100,000 was but about 2 per cent. of the whole, and of those whose liabilities were from $100,000 to $500,000 each the proportion was about 1 per cent. only. This calculation indicates that more than 7,800 of the 10,299 failures reported in 1883 were those in which the debt in each instance did not exceed $10,000; that more than Decline in number from 1879 of failures and amount of liabilities. F. Shaw & Brother, leather, The thirty-three firms above referred to, owed about $37,300,000 in the aggregate, or an average of about $1,130,000 each. Of the total of over $37,000,000 of debts, Boston firms are to be charged with $11,662,000 directly due to the F. Shaw & Brother failure. New York's total is $10,225,000, about one third of which was due to the Mayer and Levy embarrassments. Chicago ranks third, with $4,512,000 liabilities, or about equal to the total liabilities of all kinds reported from Philadelphia. Thirty-one of the firms whose actual assets were reported, gave the total of the same at approximately $20,000,000, as against $36,000,000 aggregate liabilities, thus indicating a possible settlement at 55 cents on the dollar. A valuable study bearing on the subject of commercial failures is afforded by an examination of the total number of traders and of failures in business in the United States, in 1880, in connection with the aggregate capital directly and indirectly invested in business in that year. The statistical returns of such capital, and also of the number of traders engaged in business, are reported for the first time by the Federal census of 1880. These returns show that the total recorded number of traders in the United States, June 1, 1880-— that is, those having a distinctive position in the commercial or industrial community-was 703,328. This means the number of business enterprises including incorporated companies and unincorporated business houses and firms. It does not, therefore, represent the number of individual traders, since many companies and firms are composed of two or more members each. The aggregate capital, including real estate and personal property, invested in business, was $8,177,505,862. A comparison by States of the failures in 1880, with the number of traders and the amount of capital, will be found in the table in the preceding column. From the table above, it is found that the total capital credited to the State of New York alone was in excess of the aggregate for all New England by nearly $200,000,000, was more than twice as large as the total capital in the Southern States, was two thirds as great as the total for the Western States, and more than six times as large as the total for the Pacific coast. New York's share comprised 22 per cent. of the grand total of all the capital invested in business in this country in 1880. Massachusetts ranked second, with $1,041,000,000, against $1,822,000,000 invested in business in New York; Pennsylvania third, with $867,000,000; Ohio fourth, with $595,000,000; Illinois fifth, with $486,000,000; and Michigan sixth, with $300,000,000. The following is a comparison by geographical divisions of the percentage of aggregate capital invested in 1880, and of the total number of traders and of failures in 1880 and 1883: Illinois Indiana.. Iowa... Kansas. Kentucky. Michigan.. Minnesota. Missouri. Nebraska.. Ohio.. 184,861 15,238 71 800,143 26,890 125 85,084 11,014 253,727 26,257 136 26,516 6,094 595,576 54,683 165 178,652 22,015 65 75 1 in 198 9,600 87 1 in 70 4,300 1 in 300 10,900 1 in 354 7,800 1 in 241 8,600 Wisconsin.... Totals..... PACIFIC. California.. 2,439,408 282,397 1,173 255,412 18,000 405 18,559 2,683 51 6,075 1,562 57 280,047 22,245 513 157 2,601 353 7,785 2,219 1 in 44 14,100 1 in 52 6,900 1 in 27 8,900 1 in 48 12,500 Eastern.. Middle Southern Western. Pacific. The ratio of growth in business, as indicated *26*1 in 107 8,500 by the increase in the number of traders, is shown by the following: 10,000 40.1 88.5 26.9 31.8 Oregon.. Nevada Totals.. TERRITORIES. Alaska.. Arizona. Dakota. Idaho.. Indian Territory Montana... 9,154 802 1 in 133 11,400 New Mexico... 7,757 sity exceedingly limited. At a later period, when activity has become general and ill-judged ventures have reached the point of fruition or failure, numerous trade disasters come about as a matter of course, and this while the general condition of trade is exceptionally sound. The record of the past three years has verified the analysis. In 1880 failures were relatively few, while in 1883 they were about 24 times as many, activity and competition in production and distribution having become severe. The general average of failures for the United States in 1880 was one in every 162 traders. This, if compared with the estimated ratio for 1878, a year of heavy commercial disasters, and again with the past calendar year, is as follows: The final column of the table given above shows the average amount of capital per trader by States, in round numbers, with averages by geographical divisions. It is interesting to note that Massachusetts leads among States with about $27,000 capital per trader, and that Rhode Island is second with $21,000. Connecticut with $19,200 outranks New York by about $2,000 per trader. Maryland ranks ahead of Pennsylvania, the former having $15,900 average capital per trader to $10,700 of the latter. California averages $14,100, and Michigan $11,100. For the United States as a whole the average capital to each trader or business concern is in round numbers $11,600. FINANCES OF THE UNITED STATES. See UNITED STATES, FINANCES OF. FINANCIAL REVIEW OF 1883. The record of 1883 is that of a growing commercial depression. The causes may be traced, not so much to excessive expansion during the brief tide of prosperity which reached its highest mark in 1881, as to the failure of crops from drought in that year, the losses of stock from frost and snow the following winter, the paralysis of the iron industry resulting from the cessation of railroad-building, and largely to the simultaneous depression in Europe and its effect on the exports and prices of American products. In the South, and in parts of the Southwest and West, where industrial expansion has proceeded at a rapid rate, the stringency was less felt, and in some trades and localities profits were still sufficient to encourage a continued extension of facilities. This transfer of productive activity to new centers was proportionally operative in producing the pressure under which Eastern trade and manufactures suffered. Business failures increased in steady progression, from the minimum amount of liabilities, in 1880, of $66,000,000, to $81,000,000 in 1881, $102,000,000 in 1882, and $173,000,000 in 1883. (See FAILURES IN BUSINESS.) But there was nothing approaching the character of a financial crisis. A continuous decline in the values of stocks, in the face of the heaviest returns of railroad traffic and earnings ever made, was the most remarkable feature of the year. The safety of the financial institutions of the country is in a large measure involved in the fluctuations of stock-values; but it was a reassuring symptom that their operations were conservative enough to sustain so vast a shrinkage of values. There was no bank failure of magnitude or wide-spread influence, and none which was not due to the failure of isolated enterprises or speculative corners. The following tabular survey of the economical conditions and results of 1883, contrasted with those of the preceding year, is taken from the "Commercial and Financial Chronicle": Cotton raised (bales). Pig-iron (tons) Anthracite coal (tons). Immigration (eleven months). The prices of the leading staples on or about the 1st of January, 1884, compared with prices MERCHANDISE. 400,000,000 1,551,000,000 6,000,000 4,623,000 81,200,000 586,480 |