The Richmond Virginian. (Richmond, Va.) 1910-1920, 1911-10-23
EARNESTLY FOR
TARIFF REFORM
BELIEVE POLITICIANS
REALLY MEAN WHAT THEY
SAY,
RESTORE COMPETITION
BIG CORPORATIONS WILL HAVE TO
SCALE PRICES, WHICH MEAN
DEDUCTION IN EARN
INGS.
BK THOMAS c. sHorwELn.

BK THOMAS c. SHOTwEI4n.
NEW YORK. Oct. 2e.--Belief is
gaining ground b the financial com
munity that ne politicians are in
earnest regarding tariff reform and
enforcement Of the laws compelling
competition in business. Those who
refuse to believe this remarkable pro-
position believe something that Is just
as dangerous to Investments and that
is tina the people will force the poll
tieians to carry out a radical pro-
gram under penalty of retirement
from political life IL they fail to do
so. The investor need MT concern
himself with the justice or injustice
OF such proceedings. What he needs
to know Is the effect such things will
have on the market price OF his Sc
curities. The Dersistency with which
important interests are selling more
and more stock on every recovery of
the market shows what view they
take Of the situation.
Restoration Of competition may
prove to be the best thing for the
whole body of the people in the end.
ANS AssA olAGSG &0utiot hElp buL DC
destructive TO security prices. In his
connection values mast not be con-
fused with prices. If the big cor
porations are compelled to reouce
their scales Of prices, they will earn
less money and dividends will have
to be reduced. A general movement
of this kind will reduce prices of
all commodities, and when business
is readjusted on the lower level ii
will he discovered that the smaller
dividends vii buy as much OF the
necessities of life as can be bought
for the dividends now paid. Thus,
values viii not be injured, although
prices will. and since security hold
ers estimate their profits on the basis
OF prices, it is inevitable hal they
must suffer considerable loss.
People Demand Reform.
Persons who believe stock market
prices will be advanced along with
the recovery OF business that smaller
profits may make possible, are liable
to make a serious mistake. The peo-
pie in general have worked them
selves up to u pitch Of enthusiasm
over reform that will make them
unwilling to let corporations carr
dividends on watered stocks. There
is an element of injustice in this.
because most of the holders OF those
watered stocks bought them inno-
Gently for full value. But. however
innocent their holders may be. 1t must
be admitted that the capital those
stocks pretend to represent did not
go into the enterprises. 1t is also
an injustice therefore to make the
public pay dividends on this alleged
capital. Thus ii will be impossible
to correct the situation without do
t..~
the stockholders. 1t Is a foundation
an injustice must be done to one of
two innocent parties. that party must
suffer who in theory could have saved
himself by diligent inquiry, even
though actually he had no means of
protection. Under this rule OF equity
the sins of the stock waters must be
visited upon the innocent investors
and not on the public.
President Taft recognized this sit
uation when in his message to Con-
gress he pleaded for a Federal in
corporation law. saying that unless
one was passed 1t would be his duty
to enforce the Sherman antitrust law
nee was passed 1t would be his duty
and investors. The President Is in
a delicate situation. His oath OF Of
flee compels him TO do a thing that
he himself says viii be a disaster.
He can, however, take no other stand
than the one he has taken without
laying himself liable to tnpeach-
ment for m~alfeasance in Office.
Roosevelt FAned I'm Duty.
President Roosevelt had his mo-
ment OF supreme test when the steel
trust in al onest desire to stop a
disastrous panic got his permission
TO purchase the Tennessee Coal and
Iron Company. II Mr.. Roosevelt had
forbidden that purchase the panic
would have ended In the complete
prostratton OF all business, with scores
OF banks and business enterprises in
the hands Of receiverA The panic
would have stopped itself. Business
would have recovered slowly and mos
OF the evils now plaSuinG the finan-
eial world would have bean cured
automatically. Roosevelt through his
iIl-timed pity for business interests
BILE. Taft il the kind Of man who
realizes the logical meaning Of what
the law eompels him to do. but in
tends to do his duty, 81 though
he feels II may moan his OWE politi-
cal death. A generation from now
Taft will loom up m s4hA shig azure
Of this age of rsAdjustment-
Since the stock market Is under
the influence of these broad questions
OF national policy. II is useless to
point out particulars. One can And
many bright spots In the situation,
Just NJ one can md many unintured
soldiers In the midst Of . bloody
battle. The fact that tho bright spots
ara there 10 10 proof that the con-
ditions justify optimism At the mo-
ment the market y under influence
az technical conditions the present.
OF technical conditions to prevent
temporarily a resumption OF the
downward swing. This In fortunate
realize the facts and protect them
selves from further loss.