Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1907-12-31
BUSINESS AND THE GOVERNMENT
Relations of the Two Are Fairly Exs
planned in Detail.
RESPONSIBILITY FOR THE FURRY
Causes Of the Disturbance and the
Source Of Trouble.
FRANK AND FORCEFUI srATEMENE
Dishonesty and Abuse OF Trust by Mes
in High Business Circles BriAG
About Conditions
PrevailinE.

Prevailing.
BOSTON, Dee. 20.-Seerotary OF War Tar.
made his first public utterance since hii
world-circling tour in this city today. Al
though coming 20 Boston principally as ths
guest of the Merchants association, Secre-
tary Taft consented to meet many persons
IN other walks OF life. and program,
which included brief address to leading
ministers at the regular Monday morning
gathering of Congregational divines. lunch.
con with Governor Guild and a reception
by the Jews OF the city at the Elysium
club I'm the afternoon. was arranged.
Upon leaving the train from Washington
at 8. m. Secretary Taft was driven to
the home of Samuel Carr, Boston banker
and relative of Mrs Taft. There break
fast was served, but only a few persons
outside the immediate family were present
An hour or two later several members OF
the executive committee OF the Merchants
association called at the Carr residence IN
connection with the banquet in the even
ing. 1t was expected that brief automo-
bile trip would occupy an hour during the
forenoon before the ministers meeting. but
heavy rain storm prevented n
Taft at Merehants' Exchange.
In the evening Mr.. Taft delivered an sd-
dress before the Merchants exchange. say
ing in part:
Gentlemen OF the Merchants and Manu-
factureres association of Bostoni I ana
glad to be here For more than two years
have been trying to accept your kind in
vitation. 1 do not feel strange in this
New England company. My father was
born in Vermont, my mother was born 80
Boston; my two grandfathers were born
in Mendon. Worcester county; much of my
boyhood was spent in Millbury, and / was
educated at Yale. While l cannot claim
to be one OF you, | like TO boast that ]
have enjoyed the good influence Of the
same traditions.
His Selection of n Topic.
''I had expected TO talk to you about the
Philippines tonight. That was one of the
reasons why / accepted the Invitation so
lightly. 1t is-a subject easy for me 20 taIk
about. 1t may be IT is getting stale. Foe
instance. l have found that one Of the best
methods of discouraging my friends. the
correspondents OF the press. in Washing
ton from pursuing embarrassing inquiries
into other matters is to insist on discussing
with them for publication interesting phases
of the Philippine situation. They leave
forthwith. But l had supposed that how
ever dead the islands may be as a topic
inviting discussion and attracting atten-
tion elsewhere one could rouse some senti-
ment over it still in Boston. have been
warned. however, that here, too, there
were subjects more absorbing. at least for
business men. So, when I was honored by
an invitation for this morning 10 address
the ministers of Boston. whose profession
carries them naturally in a consideration
Of other worlds said my say in respect
to the Philippines and the Ito mel very
absorbing national problem which / hope
and believe we are working out success
fully. 1t follows that for this company,
must find another subject.
During the last three months the country
has suffered from severe monetary 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
hearers have not yet recovered from the
intense 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 1 have
selected for my topic of tonight: The
Panic of 1907 Its Causes, Its Probable Eff
fects and the Relation to It of the Policies
OF the National Administration
what Caused the 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 constitute a
comparison of the present panic with pre-
vious panics and who are entirely familiar
with the conditions preceding al OF them,
substantially agree upon the cause. Panics
and Industrial depressions are the result Of
the characteristics Of human nature. which
manifest themselves in business and else
where. The, world generally has a certain
amount Of loanable capital available for
new enterprises or the enlargement OF old
ones. In periods of prosperity this cap
itaL with the instrumentaiities for en-
largtng IL potentially by credits. is put
into new enterprises which are profitable
and the increase In free capital goes on
almost in srithmetical progression. After
time, however, expenses Of operation and
wages increase and the profit from the
new enterprise grows smaller. The loan
able capital gradually changes its form
into investments less and less convertible
Much OF that which might be capital is
wasted in unwise enterprises. in extrava-
bohSe ia HNluBt IN wars ana absolute de-
struction Of property. untn the available
free capital becomes we'll nigh exhausted
the world over and the progress OF new
enterprises must await the savings OF
more. Men continue 10 embark in new
enterprises, however, the capital fails
them and disaster comes.
For eight or nine months past there
were many indications that the Ioartble
capital OF the world was near exhaustion
This result was brought about not only b.,
the enormous expansion OF business plants
ana business Investments which could be
readily converted, but also by the wsste
OF capital in extravaganza OF living and
by the Spanish war;, the Boer war and
the Russian-Japanese war and in such
catastrophes as that OF Baltimore ana san
Francisco. u became impossible for the
sopndest railroads and other enterprises 70
borrow money Tor new construction or re-
construction. The condition was not con-
nned to this country. but extended tho
world over and vas made manifest In d.