New-York tribune., 1909-06-02
UP. HARRIuAY's OUTLOOK.

Wh. HAhhiHAA , OCA CALPOh'
Mr. Harriman's farewell words on financial
conditions and prospects were sounder than
those relating to financial history. To ascribe
the panic TO Judge Landiss decision fning the
Standard Oil Company of Indiana $29000uoOls IS
to make too much Of that incident The great
fine caused a great deal Of astonIshment, some
ridicule and some applause, but there was no
evidence of alarm over il. It was not generally
expected to stand. The fine preceded the panic,
but signs of the coming financial disturbance
preceded the fine by many months Men Of high
noSition in the business world have exaggerated
the effect upon financial conditions of the agita-
ton which eliminated, on the side of extrava-
gance at least, in the $29,GO0,000 fine Two
things were going on together-political agita-
ton against financial abuses and a rise in in
terest rates. Agitators were busy, and it was
hard 10 borrow capital. The whole country was
nuckrak king and money was scarce" Naturally
these facts connected themselves in certain
minds as cause and effect. The agitators were
frightening the lenders out Of the market All
the warnings Of coming trouble that preceded
the actual smash by more than year ascrieed
the scarcity OF capital TO the hostility of legis-
latures and executives. But there are the best
Of reasons for believing that the two had very
little relation to each other, and when the argu-
menC is carried TO the point of asserting that
Judge Landis's fine precipitated the panic 1t
seems 10 Us that it is reduced to an absurdlty-
But whatever may be thought of Mr.. Harr1-
mans explanation of financial conditions year
or two ago, with regard to actual financial condi-
tions what he says is in the main indtsputable
Business is being built up steadily and soundly.
Crops are the important consideration to-day.
Any one who reads the history Of previous
panics will find that many promising recovery
from depression has been set back by a crop
failure Barring that possibility, the immediate
future seems secure and a full restoration OF
prosperity certain Signs Of a return 70 condl-
tions ike those of q few years before the panic
are plentiful The recent drygoods combina-
ton is an indication OF returning health and
activity. The period Of expansion which re-
Gently closed began with Just such developments
as this. Men engaged in the drygoods trade
which was one Of the first 70 recover from de-
preston, are evidently sure that they are in a
sound position. are beginning to lock forward
with confidence and are studying the possibility
of profits in concentrated management.
Nor is that incident alone an indication Of
change for the better. Steel, the old baron
eter Of trade is behaving in an astonishingiy
buoyant fashion Well Informed persons in
trade circles say that last month was the great
est in the history Of the industry. Orders for
the month are reported to have reached the
unequalled total Of 100000 tons, whereas the
production for the whole twelvemonth preced-
ing averaged only 100000 tons a month, and the
average for the great year of 1907 was only
100000 tons a month. No doubt this very
rapid development in the steel industry, in re-
sponse to the recent cutting of prices has much to
do with the general optimism. Very likely also
that sentiment is exaggerated, and will be sue
ceeded by conviction that recovery, after all,
will be slow and gradual, for these two feelings
have been alternately uppermOst ever since the
panic. Orders of 100000 tons do not indicate
that q boom has already begun that will exceed
that of 1906 and 1907, but merely that the cut
in prices removed an impediment to recovery.
Steel was SO far behind other industries in
covering-behind drygoods, for example-that it
was no longer the barometer of trade Now 1t
IS catching up with q rush, and Is perhaps no
better barometer of trade. But all this IN
creased activity in steel will bring in its time
increased activity elsewhere, and thus things
will tend toward the normal.
As for Mr.. Harriman's intimation that nothing
but a crop failure can disturb the future, per
haps he meant only that that was the most dan
gerouS possible factor, for it must be remem
bered that we are just emerging from a depres-
sion that came i'll a period Of agricultural pros.
perity. The coming period has, from the econ
omiSt's point OF view, its own elements Of weak
ness. Prosperity is usually an era of advancing
prices, but this one is to begin apparently with
the cost of labor and commodities very nearly at
the top notch and there exist to-day combina,
tions with power to put up the prices of labor
and Of commodities such as never existed before
Predictions are always idle, but certainly rea-
sonabe restraint is needed lest a house of cards
be brought tumbling down again