Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1907-12-31
SCORES LANBREAKERS
Secretary Taft Makes Speech
Defending the Administra-
ton Against Attacks
JESS NOT ARRAlGNED
Has Attacked Only the
Dishonest corporations-DeaIs With
Causes Of Financial Panic-Opposed
to Government Ownership of Rail-
roads.


to Government Ownership of Rail-
roads.
Boston, Dee. 31.-Secretary Of War
William H. Taft spoke here last night
before the Boston Merchants and
Manufacturers association. His adj
dress had been awaited with much
interest, and, as anticipated, he de-
tended the administration from the at
tacks Of corporate interests and Incl
dentally outlined his political platform.
The subject of his address was The
Panic and Its Causes and he said
in part:
During the last three months the
country has suffered from severe
monetary panic. Even yet the clear
ing house certificates linger in your
bank e- ses as emphatic evidence
=. 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 suffering to which they have
been subjected since the middle Of
October. The panic has been given a
certain political bearing and import
ance. For this reason l have selected
for my topic of tonight The Panic Of
1907; It's Causes; Its Probable Eff
fects, and the Relation to 1t of the Pol
cies of the National Administration.
What did cause the panic? Writer'S
on the financial subjects who have
given their lives and constant atten-
ton to matters of this kind, who are
able to institute a comparison of the
and who are entirely familiar with the
conditions Proceedings all OF them, sub
stantially agree upon the causes. Pan
les and industrial depressions are the
result Of the characteristics of human
nature, which manifest themselves in
business and elsewhere. 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
capital, with the instrnmentalities for
enlarging it potentially by credits, is
put into new enterprises which are
profitable and the increase in free cap
ital goes on almost in arithmetical
progression. After time, however,
expenses Of operation and wages in
crease and the profits from the new
enterprises grow smaller. The loan
able capital gradually changes its form
into investments less and less con-
vertible. Much Of that which might
be capital is wasted in lunwise enter
prises, in extravaganza in living, in
wars and absolute destruction Of prop
erty, until the available free capital
becomes well nigh exhausted the world
over, and the progress Of new enter
prises must await the savings of more.
Men continue to embark in the new
enterprises, however; the capital fails
them, and disaster comes.
For eight months last past there
were many indications that the loan
able capital of the World was near 1ex-
haustion. This result was brought
about not only by the enormous expan-.
sion of business plants and business
investment. which could not be readily
converted, but also by the waste Of
capital in extravaganza Of living and
by the Spanish war, the Boer war and
the Russian Japanese far, and in such
catastrophies as at Baltimore and San
Francisco, 1t became impossible for
the soundest railroads and other en-
Tow %o Fo,
construction of reconstruction. The
condition was not confined to this
country, but extended the world over
and was made manifest in the coun-
tries of Europe even before it was felt
here. E
Secondly, the conclusion cannot be
avoided that the revelations of irregu-
larity, breaches Of trust, stock jobbing,
over issues of stock, violations of law
and lack Of rigid state or national SUI.
pervision in the management Of some
of our largest insurance companies,
railroad companies, traction compan-
les and fiancial corporations shocked
investors and made them withhold.
what little loanable capital remained
available. Such disclosures had much
more effect probably, abroad than they
had here, because here we were able
to make distinctions while there at a
remote distance the revelations created
distrust in our whole business fabric.
When therefore two or three insti-
buttons, banks and trust mpanies
supposed to be solid, were found to
have their capital impaired by stock
jobbing of their officers, the public was
easily frightened and the run upon
banks begun. The question then be-
came not one of loanable capital, but
of actual money to be used in the
of the day-a very diff
ferent question, tho, Of course, closely
related.
1t would seem that our system of
currency is not arranged so as to per-
nit it's volume to be increased tenn
porarily to counterfeit the sudden drain
Of money by the boarding in panic.
It is probable that the stringency
which reached its height on that dark
day of October "a might in part have
been alleviated had we had a currency
which could automatically enlarge it
self to meet the tremendous demand of
a day or a week or month while
public confidence was being restored.
The national administration, together
with many of the large capitalists of
New York and elsewhere, put their