, 1908-01-25
FRENCH EXPERT GIVES VIEWS ON
AMERICAN FINANCIAL CRISIS.
NJ. Paul Leroy-Beaulieu, President of the
College of France, Attributes Recent Condi-
lions in This Country to Industrial Megalo-
mania.

Among the keenest observers of financial
conditions IN this country is M. Pau Leroy
Beaulieu, member of the Institute, President
OF the College Of France and editor of
L'Economiste Francois. A comprehensive
review written by him, in which he gives
his theories Of the causes of the financial
collapse in Wall street, recently attracted
considerable attention.
This eminent French economist maintains
that it is erroneous to attribute the crisis
in this country to lack of money or a defec-
tive banking organization. The actual cause
of the crisis, he says, sis something entirely
different, it is the actual overexpaEsion of
industrial enterprise in the world and the
consequent insafficiency in the worlds supply
of capital. But the principal cause-one
may indeed say the sole cause for all The
rest is only accesso ry-of the crisis now
raging in the United States, and which has
in a smaller measure touched Germany, IS
industrial and financial megalomania, and
complete forgetfulness of the well establish
ed II lie Of political economy, that capital
limits industry. What has happened is that
new enterprises have been started or old
enterprises have been tnlarged to a degree
wholly beyond the sum total of the worlds
capital-that is to say, beyond the amount
of capital actually produce ed by the savings
of the civilized world"
A POPULAR ERROR.
NJ. Leroy Beaulieu maintains that the
error Of the Flbllc at large consists i'll believ-
ing that there are no limits to the financial
activities Of Il nation, especially il that nation
be great and prosperous.
CHOW capital" he says, consists by no
means principally of circulating money, me-
tallic or other; on the contrary, it is the
sum total of all the wealth which has bneu
laid by, of all the reserve provisions which
have been made and of all the industrial in
stallations and improvements which have
been completed. 1t is precisely these
supplies Of capital which have fallen
short, quite as much as the circulating
medium has, if not indeed more, of the extrav-
agant American demands. The proof of this
lies in the advancing price of everything,
especially Of raw materials-metals, wood
textile materials-all these have undergone
q phenomenal advance of fifty, sixty or
eighty per cent. The industrial megalomapia
which has prevailed in the United States
particularly, but also to a considerable ex-
tent i'll Germany, took no account of what
was possible. It merely devoted itself to
pushing up everything.
ut is the constructing companies and
the greatAmerican railways which, beyond
all others, have given themselves up to
this debauch of extravaganza. Contracts
have been placed for the construction, in the
single year of 1907, of Is, 900 miles of new
railway, which was about half the entire ex-
tent of The French railway system in exis-
tence at the time. The railway companies
prepared for suck expenditures by issue of
securities to a simply stupendous amount
and this state of affairs in the end came up
on the credit markets with a force and
brutality which were fatty irresistible.
The REAL CAUSE.
"Here, then, is the real cause of the
American crisis-and that cause is not the
insufficiency of metallic money. Certain
incidents have doubtless accentuated the de-
bacle. II the fight of President Roosevelt
against the t!usts had not of itself been a con-
tributing cause it must be confessed at least
that certain excessive demonstration in that
attack an| certain wholly eccentric financial
penalties imposed on the great companies
have done their part in intensifying the mis-
trust of the public against commercial or in
dustrial companies of every nation
M. Leroy Beaulieu adds that in his OPT
Mon, President Roosevelt has been funda-
mentally right.in HIS camnaipn a0o;ns+ H.