The daily morning journal and courier., 1907-06-27

 been poured into railroad building and that the roads are not keeping pace with the necessity for transportation. At the present rate of increase. in twenty years, we will have a population of 40 millions, and in forty years, nearly 200 millions will live and have their being in the United States. The realization of this probability means a reorganization of American economic life. It will re- quire, even in our time, practically duplication of the present railroad fa- cilities. The necessity of approximate ly keeping pace with the demands for transportation forces the railroad question to the front-not only as a State but as a national problem of the first magnitude. It should be mani fest that it's solution lies along the line Of inspiration of confidence by con- gress and the legislatures, and upon It's correct and speedy solution depends much of our future strength.
 The railroad manager is face to face With a situation such as no human foresight could have anticipated. Roll ing stock, trackage and terminal facili- ties are entirely inadequate to the de- m&nds of the shipper, and to meet such a situation, labor and materials must be secured at the highest cost that has ever obtained, funds must be drawn rom market in which capital is scarce and high-priced, and terminals must be enlarged in cities where the price of land is almost prohibitory. The situation is not local, for there has been worldwide stretching of credit. If to this is added legislation tending to un- dermine the faith of the investor in railroad securities, the problem becomes Well-nigh hopeless While there are oth- CT causes, the present low market val ue of securities would indicate that the general attack on these properties has had tendency to frighten the investor and to depreciate the value of the se- curities at a time when there should be such confidence as to invite investment. The fact that few pigs have gotten in the trough is not sufficient reason for poisoning the food on which they fatten
 It is essential at the present time that there be no Encouragement of capital, for unusual economic conditions exist. Since 1897, there has been unparalleled prosperity and activity which has last ed longer than any similar period in the history of the country, and like all periods of prosperity, 1t is infected with the germ of incipient danger. Credit, easily obtained, has not only been used in promoting legitimate enterprise, but in exploiting illegltimate, unproductive and speculative enterprises. The loans of national banks alone have increased 1 from 00,000,000 in 1897 to over .$4,600, 100000 in 1907 Deposits have shown a ! corresponding increase, but the ratio of lawful reserve to deposits has de- ceased from 31,7 per cent to 21.22 per cent. in the last ten years. A decade ago the average reserve in specie held by the country banks in their vaults was 1851 per cent of their deposits This ratio has declined to 7SO per cent. at the present time. There now exists a necessity for going slow in the incur- ring of further debt, and for the check ing of investment in unproductive and l speculative enterprise. While it is I doubtless true that many industries and individuals are in better financial con dition than ever before, it is also true that the country as a whole has more invested in unproductive enterprises than it can afford, and we are in a I position where it is easy to precipitate a crisis or to bring about a depression, or both. Our whole system is in sus- ceptible condition. and it may easily become infected by panic germs. This can be avoided only by extraordinary care. Clement Jugler said of the condi- tions of 1918, 1857, 1873 and 1893, when we were involved not merely in stock market panics but also in a general Arrangement of credits and decline in commodity prices, followed by exten- sive failures:
 There cannot be another reason for the whole phenomena of ups and downs than the peculiarity of the human mind the waves in human appreciation. Mer move together and many are apt to act together, to follow the same waves of mood But 1t is not only, as specially developed by MT Mills, in the apprecia- ton that gives or retrenches credit that human mood appears so different and changing in periods but it is also the appreciation which increases or de. creases production and prices. All val ules are moved by demand and offer and both depend, to very great ex- tent, on the human will"
 If we clearly recognize the psycholog ical element in human activity, the rhythmic movement of optimism and pessimisnn, we shall have accomplished much toward equalizing business con ditions. Undoubtedly the situation calls for the calm consideration of the men uf to-day, all men, because it relates to the general welfare, and demands their assumption of a responsibility an( duty to the end that we may take nc backward step. Do not let us deceive ourselves! It Is not the stock gam blers" of Wall street, who have cause, this hesitation and uncertainty. Wal street is simply an indicator by whlel is rcgisteltC the hopes and fears oi mllions of men, and just now t regis ters more of fear than of hope. WC have marched up the hill of progress as a united people, buoyant and hap py We have entered the cita iel now let us hold it, Delicate machinery re- quires expert handling. The comple, machinery of finance and commerce i! easily disarranged There is q differ ence of less than fifteen per cent, be- tween prosperity and diversity in hi! country. A decline of about seven peI