The Greenville journal. [volume] (Greenville, Ohio) 1850-1918, 1908-01-09
WASTE CAUSED
RECENT PANIC
Secretary Taft Delivers Notable Ad-
dress On Business Conditions
to Boston Merchants
Association.
MESSAGE OF HOPE FOR FUTURE


dence Being Restored-Early Re.
sumption Of Industrial Development
Predicted-Take World Ten Years
to Adjust Itself to Panama Canal.
Boston, Mass, Jan. 4.-Secretary Of
War William II. Taft was greeted
with cheers as the Next President of
the United States" a subject he care
fully avoided, when he delivered on
last Monday night at the annual ban.
quet of the Merchants association his
first public speech since returning
home from encircling the globe as the
American Secretary of Peace"
In the morning Secretary Taft spoke
briefly to four hundred Boston minis
ters and in the afternoon he addressed
a large gathering of Jews in Elysium
club
The principal address was delivered
to IA most representative audience Of
Boston business men. Secretary Taft
selected for his topic: The Panic of
1907; Its Causes Its Probable Effect,
and the Relation of 1t to the Policies
OF the National Administration"
He said
l am glad to be here For more than
two years | have been trying to accept
your kind invitation. | don't feel strange
in this New England company. My faith
er was born in Vermont my mother was
1FEtl
were born in Mcndun, Worcester county;
mucn OF my boyhood was spent in Mill
bury and | was educated at Yale While
i can not claim to be one of you, like
to boast that | have enjoyed the good
influence of the same traditions.
l had expected to talk to you about
the Philippines tonight. That was one
of the reasons why | accepted the invi-
tatiOn so Lightly. 1t is Il subject easy
for me to talk about. 1t may be it is get
ting a little stale. For intsance. l have
found that one of the best ways of dis
COuraging my friends. the correspondents
of the press in Washington, from pursu-
ing embarrassing inquiry into other
matters is to insist on discussing with
them for publication interesting phases
OF the Philippine situation, They leave
forthwith. But | had supposed that,
however dead the islands may be as
topic inviting discussion and attracting
attention elsewhere one could rouse
some excitement over 1t still in Boston.
] have been warned, however that here,
too, there were subjects more absorbing
at least for business men. So, when |
was honored with an invitation to ad-
dress the ministers of Boston, whose pro-
fesSion carries them naturally into Il
consideration of other worlds, | said my
say in respect to the Philippines, and
the to me, very absorbing national prob
lem. which | hope and believe we are
working out successfully. 1t follows that
for this company | must find another
subject.
1.-THE Panic of 1907"
During the past three months the
country has suffered from severe mon
etary panic. Even yet the clearing house
certificates hnger 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 suffering to which
they have been subjected since the mid
die of October. The panic has been given
a certain political bearing and import
anCe For this reason | have selected for
my topic tonight, THE Panic of 1907
Its Causes, Its Probable Effects and the
tional Administration"
What did cause the panic? Writer'S on
financial subjects, who have given their
lives and constant attention to matters
of this kind, who are able to institute a
comparison of the present panic with
previous panicS, and who are entirely fa-
miliar with the conditions preceding all
of them, substantially agree upon the
causes. Panics and industrial depres-
"A nf T. OF "a ri ipu
of human nature, which manifest them
selves in business and elsewhere. The
world generally has a certain amount Of
loanable capital available for new enter
priSeS or the enlargement of old ones
In periods of prosperity this capital, with
the inStrumentaliteS for enlarging It po-
tentially by credits, is put into new en-
terprises, which are profitable, and the
increase in free capital goes on almost
in arithmetcal progression. After time,
however, expenses of operation and
wages increase, and the profit from the
new enterprise grows small.
The loanable capital gradually changes
its form into investments more or less
convertible Much of that which might
be capital is wasted in unwise enter
prises, In extravaganza In living, in wars
and absolute destruction of property,
until the available free capital becomes
well nigh exhausted the world over and
the progress OF the new enterprises must
await the saving of more, Men continue
to embark in new enterprises. however;
the capital fails them and disaster
comes.
Many Indications.
For eight or nine months last past
there were many indications that the
loanable capital of the world was near
exhaustion. This result was brought
about not only by the enormous expan-
sion of business plants and business in
VestmentS which could not be readily
converted but also by the waste of CAP
ital in extravaganza of living and by
the Spanish war, the Boer war and the
Russian Japanese war, and in such ca
tastrophes as Baltimore and San Fran
cisco. Ii became impossible for the
soundest railroads and other enterprises
to borrow for new construction or recon
Structon. The condition were not con
fined to this country, but extended the
world over and was made manifest in
the countries of Europe even before II
was felt here.
Second the conclusion can not he
avoided that the revelations OF rregu-
larity breaches of trust stock jobbing
overissuance of stock, violations of Law
and lack of state or national supervision
In the management Of some of our larg,
est insurance companies, railroad com.
panies, traction companies and financial
corporations shocked investors and MADE
them withhold what little ioanabie cap.
ltal remained available.
Such disclosures had much more ef-
feet, probably, abroad than they had
here. because here we were able to make
distinctions. while there, at remote
distance, the revelationss created dis
trust in our whole business fasric
When, therefore. two or three institu-
tions, banks and trust companies sup
posed TO be solid, were found to have
their capital impaired by stock iobbing
of their officers, the public was easily
frightened aud the run upon banks be-
gan The question then became not one