OCR Text |
Show TOO MUCH PROSPERITY SAYSJENRV CLEWS Veteran Financier Attributes Shrinkage of Values to Overdoing of Business. NEW VORK, Aug. 27. The shrinkage In Wall ntreot values has alreadv ox-ceodod ox-ceodod 53.000.000,000. Thlfi Is largely due. not lo President Roosovelfa policy or ms actions In connection with corporations, for similar disturbances have taken pmco In London and olHewherc. Englloh Con-hoIp, Con-hoIp, for instance, aro lower todav man they have been In tho history of the nation. na-tion. Ah a matter of fact, wo have had In thin country too much prosperity lor ooveral ycara, causing an overdoing m all channels of work, conetruotlon ana speculation. In other words, there nas been too much business for capital, credit and transportation. Values had become Inflated, nnd In the meantime there wero many evidences of corporate dishonesty which shocked confldence-tfy tho revelations revela-tions that cropped out from tlmo to time. Mr. Roosevelt's policy lias been iorcd upon him bv these developments. jhlle the penalty now being paid may be bitter for tho excesses that have taken P'nCG tho si luatlon will be a sounder ono In the end and all Interests will be cntabllshed on n more conservative basis. Great prosperity pros-perity has forced upon corporations a larger amount of business than they had the ability to handle; hence the flooding of the market with securities to obtain the means to meet the emergency and the cxcesslvo Issues from that source. It lu plain to bo seen, therefore, that thoso who blame Mr, Roonevolt for all our troubles trou-bles are In error. Actual conditions havo been mainly responsible. We have been confronted with conditions, not theories. Secretary Taft's strong endorsement of the President's policy and the President 3 own speech are strong and sufficient evidence evi-dence that the President cannot be budged from his attitude against the violators of tho interstate commerce laws by clamor clam-or or criticism, and I suggest that, rather than to violently oppose the President. It will be well for the corporation magnates and managers to fall In line, and lot the President and the public understand that they will strictly obey the interstate commerce com-merce and the Sherman anti-trust laws They might ns well accept the Inevitable, for It Is plainly evident that ho will not change, and the statute laws should bo observed. Thero has been great misunderstanding misun-derstanding and much exaggeration an to tho Intention of the government officials. All that they propose to do, as far as can be ascertained, Is to compel great corporations to respect the law In the same manner nB the humblest citizen. When public hysteria has subsided, the effect of past agitation and present action ac-tion will result In higher standards of corporate cor-porate management and a keenor sense of honor and responsibility. Lot tho stockholders of the various corporations Join hands In demanding tho punishment of the guilty Individuals without causing the suffering of innocent Investors and Mr. Roosevelt will accept them as allies In his work of reform. Big money fines punish the Innocent stockholders and' depreciate de-preciate values, since they threaten confusion; con-fusion; while Imprisonment of tho guilty J would enhance values, lift our national reputation to a higher plane, put our securities se-curities on a more reliable and honest basis and restore confidence at home and abroad. The monetary situation, though far ! from being satisfactory, Is gradually improving. im-proving. No doubt liquidation has enforced en-forced sufficient contraction in loans to materially strengthen the banks and enable" en-able" the latter to finance tho crop and the' largo business demands of the Interior. All accounts from tho Interior are encour-aglng.v encour-aglng.v As a result of average crops and profitable pricoe, there Is every prospect of a good market this fall for all staple products, even If the stringency of the money market should onforce a curtailment curtail-ment of ne.w enterprises and speculative operations. There la no doubt lhat the i country would be better oft for a moderate moder-ate recession in general business, bo that tension might be relieved and affairs return re-turn to tho normal; for Wall street Is still the storm center andi while the ond has apparently not como yet, the tlnanclal situation sit-uation has been much bettered by tho decline to a lower and f-afer level. There la moro or le3s uneasiness In London, Paris and Berlin, whero much the same difficulties aro being faced, though less Intonse. Overdoing la also at the bottom of foreign troubles, and the same cure must be endured; that of liquidation. Tho Bank of England, although It did not ad-vnnco ad-vnnco the bank rate this week, Is showing unusual caution, nnd the foreign demand for gold at this time is suggestive. Considering Con-sidering our own position, It does not seem likely that wo can afford to part with any large amounts of gold at this season. We ought to be able to placo future grain and cotton bills more freely just now, slnco It Is certain thai Europe must tako these products In large amounts and pay us good prices for the same. At the same time our Imports have been running very heavy, thus offsetting tho largo excess of exports which has favored us for several years and making it easier for Europe to tako our gold. Tho credit situation Just now Is one that calls for calm judgment. , A wave of hysteria has passed over the street that should be overcome and beaten down. The country Is not on tho verge of ruin. It is suffering from various excesses and needs a period of diminished activity for recuperation. The liquidation cure Is painful but Inevitable, and when completed com-pleted tho patient should come out of its present Ptato in good health. Those who control the purso strings should be calm and self-poised, giving assistance whon needed to concerns of proved soundness and earning capacity and rigidly withholding with-holding It from those which are unstable and unduly speculative. The stock market mar-ket is still In an unsettled condition. It shows fair rallying powers; but It Is evident evi-dent that liquidation Is Incomplete, nnd those who are able to purchase good stocks outright will undoubtedly be nblo to pick thc.-n up nt prices that will vleld good profltH to the permanent holders. On all marginal transactions wo advise great, caution. HENRY CLEWS. |