Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1912-07-27
SUGAR TARIFF SCARE.
CAUSE OF STAGNATl0N
Henry CIeWs Does Not Believe
Either Political Party Will
Pursue Rash Policy

Henry Clews, in his special letter
dated New York, July 13, offers some
shrewd observations on the business
outlook as affected by the political
situation. The letter is herewith print
ed in full:
The refusal of the market to re-
spond to such encoura ging influences
4, good crop report, larger activity
in industrial and mercantile circles,
better railroad and Industrial earnings
naturally disappointed those whose
oyerconfidence had prompted them to
anticipate continuance of the up
ward movement after the Presidential
conventions were over. The truth is
these favorable influences had been
used as basis for proft-taking by
those on the long side of the market.
This left the situation technically
weak, especially in view of frmer
money and the approach of summer
quiet and absenteeism.
The Tariff Uncertainty.
Moreover a new set of conditions
ere developing, the outcome of which
is vet to be seen. Chief of these are
developments in the political situa-
ton. which even the most optimistic
people cannot entirely ignore. Both
parties are out for tariff revision:
one for more moderate protection, the
ether for revenue only. The tariff, OF
course, strengthens the position OF
many industrials, and the concerns
n ost interested in its reduction are
those engaged in the production OF
steel, coal, sugar, cotton, woollens.
silks, rubber, glass, etc. Tarin uncer-
tainty is consequently an unfayorable
element in Wall Street calculations.
There are quite number OF indivldu-
ais who believe that any important re-
vision of the tariff will materially les
sen Industrial profits They may at
tach an exaggerated Importance to the
effect of revision and entirely over
look advantages acruing in other di-
dections. Yet, if they act upon such
beliefs and reduce their holdings OF
tariff-aided stocks, the effect cannot
hut be to temporarily depress prices
and hinder Improvement while uncer-
tainty remains.
Good Politics.
Besides it might be considered good
politics by those actively concerned In
beth politics and finance to give the
tariff reformers a. lesson by encourag-
ing a stock market fall while the poll
teal campaign was on. Taking these
possibilities at their true value, now
ever, the chances are against any serl-
Gus reduction in the tariff, mainly be-
cause it now produces over $30O,OOO.-
O0o of revenue, and our national ex-
penses are too heavy and growing too
fast to permit of any radical reduc-
ton, even if lower rates stimulated
importations. Nor is this the only OBJ
stacle to tariff reduction. The modef-
ationists who are of considerable IN
fiuence in both parties are opposed to
any smashing policy, preferrirg
moderate and gradual revision which
will enable industry to adjust itself
to a lower scale of duties without
shock. Further, both parties are diyid-
ed on the tariff question largely on
geographical lines. Many Democrats
have turned protectionists, while. on
the other hand, many Republicans
wish to cut out the abuses of the pres
ent schedules The difficulties OF
reaching any harmonious action on
the tariff are so many and complicat-
ed that there is little reason to anticl-
late any very damaging result.
1t is a little early to be frightened at
this tariff campaign, especially as
more interests will be benefited tnan
hurt by the reduction, and once the
tariff is placed upon more reason
able basis it will automatically be-
come smaller target for attack. Still
We should not forget that there are
many who are apprehensiye on the
subject, and the unavoidable uncer-
tainty is beyond dispute disturbing.
This being the case the tariff must be
accepted for the next few months at
least as an important elemen in the
future of the stock market.
Third Candidate Scare.
Other conditions contributing to-
wards this weeks reaction were fears
that the injection of third candidate
into the gubernatorial campaign
might bring OIL threatening deadlock
in case the cleo toral college failed to
elect President There is fear also
that current investigations in the steel
and coal trades will stir up afresh the
anti-corporation feeling,
particularly in view of the continued