Los Angeles herald., 1907-12-31
SECRETARY OF WAR CHEERED
IN BOSTON
DISCUSSES THE FINANCIAL STU
ALTON
President RooseveIt's Choice as His
Successor in the White House
Addresses Merchants
Association
By Associated Press.

avoided in his own remarks, however.
Secretary Of War William H. Taft to-
night delivered his first public speech
since his ld-circling tour at the an
nuai banquet of the Boston Merchants
association at the Hotel Somerset.
The banquet closed long and stren-
uous day for the secretary of war; during
which he delivered a brief address before
400 ministers in the morning and attended
a reception and spoke before gathering
of Jews OF the city at the Elystum club
In the afternoon.
Dnring his visit to Boston. which ends
tomorrow morning, Secretary Taft is the
guest OF Samuel Carr, Boston banker
and relative of Mrs Taft.
more notable gathering of prominent
ana representative business men has sell
dom been seen in Boston than that which
greeted the secretary tonight. in the BAN
ouet hall beautiful decorations adorned
the tables, which provided for the seating
OF over 500 guests, while behind the
speakers table were q great many Amer
lean flags.
AS the secretary arose to speak all the
guests stood up with him and filed the
air with long continued cheers. Calls
for "three cheers for Secretary Taft, the
next president of the United States"
were heartily acclaimed.
secretary IaIL spoke dS lOilOWS'
"Gentlemen OF the Merchants and Man
ufacturers' association of Boston: am
glad to be here. For more than two
years have been trying to accept your
kind invitation. l do not feel strange
in this New England company. My
father was born in Vermont, my mother
was born In Boston, my two grandfathers
were born in Mepdon, Worcester coun-
ty, much OF my boyhood was spent In
Alillbury and l was educated at Yale.
While l cannot claim to be one OF you,
1 like to boast that l have enjoyed the
good influence of the same traditions.
IT had expected to talk to you about
the Philippines tonight. That was one
of the reasons why / accepted the in
vitation so lightly, as 1t Is a subject easy
for me to talk about. 1t may be It Is
getting little stale. For instance, l
have found that one of the best methods
of discouraging my friends. the cores
pondents OF the press In Washington,
from pursuing embarrassing inquiries
into other matters is to insist on
discussing with them for publication in
teresting phases of the Philippine situa-
tion. They leave forthwith.
OF interest to All
"But / had supposed that however dead
the islands may be as a topic inviting
ulSCuSSlOH anu dLITdCllub dIbSnGOA GA5S-
where, one could rouse some excitement
over it still In Boston. L have been
warned, however, that here. too, there
were subjects more absorbing, at least
for business men.
$50, when l was tonored by an invi-
tation for this morning to address the
ministers of Boston, whose profession
carries them naturally in consideration
OF other worlds, said my say in re-
a. ud N ma
very absorbing national problem. which
I hope and believe we are working out
successfully. 1t follows that for this
company l must find another subject.
During the last three months the
country has suffered from a severe mon
etary panic. Even yet the clearing
house certificates linger in your bank
exchanges as emphatic evidence of its
severity and of the extreme measures
which had to be taken to avoid greater
disaster. Doubtless many Of my hear
ers have not yet recovered from the in
tense nervous strain and mental suffer-
ing to which they have been subjected
since the middle Of October.
"The panic has been given a certain
political bearing and importance. For
this reason l have selected for my topic
of tonight @lhe Panic of 1907; It's Causes,
Its Probable Effects and the Relation to
"What Caused Panic"
"what did cause the panic? Writers
on financial subjects who have given
their lives and constant attention to
matters Of this kind, who are able to in
stitute comparison of the present panic
with previous panics and who are en-
tirely familiar with the conditions pre-
ceding all of them, substantially agree
upon the cause.
"Panics ard industrial depresslons are
the result of characteristics of human
nature, which manifest themselves in
business and elsewhere. The world gen.
orally has certain amount of loanable
capital for new enterprises or the en-
largement of old ones. Ir periods of
prosperity, this capital with the instru-
mentaliaies for enlarging 1t potentially
by credits Is put into new enterprises
which are profitable and the increase in
free capital goes on almost in arithmet-
ical progression. After a time, how
ever, expenses OF operation and wages
increase and the profit from the new en-
terprise grows smaller. The loanable
capital gradually changes its form into
investments less and less convertible.
Much OF that which might be capital Is
wasted in unwise enterprises or In eX-
travagance ir living, in wars and abso-
Lutte destruction Of property, until the
available free capital becomes well-nigh
exhausted the world over and the
progress Of new enterprises must await
the savings Of more.
Men continue to embark In new en-
terprises. however, the capital fails them
and disaster comes.
For eight or nine months past there
were many indications that the loanable
capital of the world was near exhaus-
ton This result was brought about not
only BY the enormous expansion of busi-
ness plants and business Investment
which could not be readily converted
but also by the waste OF capital in ex-
travagance of living and by the Spanish
war. the Boer war. and the Russo-Jap-
apese war, and In such catastrophes as
Baltimore and San Francisco. It became
impossible for the soundest railroads and
other enterprises to borrow money for
new construction or reconstruction. The
condition was not confined to this coun-
try but extended the world over and was
made manifest In the countries of Europe
even before It was felt here
Revelations Of IrreguIarIty
Secondly. the conclusion cannot be
avoided that the revelations of irregl-
larfty. breaches OF trust stock iobbinR