The Hawaiian gazette., 1913-12-30
EXPLAINS CAUSE
OF DEPRESSION
C.ews Says High Cost Of CAPT
tai" and Pernicious Political
Activity Are Factors.

Henry Clews special letter Of De
cember 10 says that:
Securities continue to exhibit sur.
prising resisting qualities. Discourag
ing influences are numerous and active,
and yet values. except in special in.
stances, are well maintained and show
a disposition to rally upon the slightest
encouragement OF course this is at
tributable to the sold out condition of
the market; also to the fact that the
financial district has largely discounted
any possible business reaction
Mexico is disappearing as factor,
and the Currency Bill has passed be-
yond the apprehensive stage. Mr.. vii.
son s stand on the probable trend of
antitrust legislation Is received with
commentator.
Clews says that the blame for the
general business stagnation is the
worldwide high cost of capital"
Visionary Reformers.
"The signs of recession on this ac.
count he says, care quite as pro.
nOuneed abroad as in the United States.
In Europe the situation is aggravated
by miitarism, and in Canada by Il too
rapid expansion. Neither of these con.
ditions exist in the United States
There has been no serious overstrain OF
credit in this country; nor any over
expansion in general business. On the
contrary. the banking situation is
pretty well in hand, and our various
merchandise markets are more likely to
suffer from scarcity than from overpro
duction. AS a matter of fact econo.
mic conditions in the United States
are sounder and more encouraging than
those prevailing elsewhere. And yet
business depression is nowhere so mark.
ed as along the seaboard Of the United
States, and this depression is grad
ually extending itself throughout the
West and South. Why should this coun.
try suffer a keener recession in bust
ness than any other country when in.
trinsic conditions are generally sound?
There is no other explanation for this
unfortunate condition of affairs except
that of pernieious political activity
What with the meddling of visionary
Teformers and the attacks of radical
politicians upon all forms of business
activity, legitimate enterprise has been
almost literally DESTROYED. The spirit
to venture and invest, which il the
handspring of industrial progress, has
been thwarted in every direction by
constant oppression. Our new free
dom may be born, but it is not yet
even lusty infant, and the country
is suffering sadly from unwise interior
ence or downright injustice emanating
from political influences. There are
signs, however, of a change in this di.
rectiOn; Mr.. Wilson, although a pro
gressive of tremendous power. seems
quite inclined to curb the ambitions of
extreme radiealism, and there are indi-
cations elsewhere that our visionary
political leaders will be forced to sit up
and take notice of the consequences
of their actions. Especially will this
be true when the army of unemployed
increases, as it surely will unless bust
ness men are spared this incessant ir-
ritation and interference with legiti-
mate enterprise
European Situation Improves.
The European situation seems to be
slowly improving. If the fotation of
the French government loan brings out
the boarded money of the country the
situation will at once improve.
"The local situation is still one that
requires caution,' continues Clews.
"The outlook is still somewhat uncer-
tain, but adverse influences have been
so vigorously discounted that they can
have little effect upon the market. The
sharp declines in New Haven, New
| York Central and Canadian Pacific
came as surprises, vet the shock did not
extend beyond those issues. Lower
prices may be expected as we approach
nearer to the new year, but should
there be any improvement in prevailing
economic and political tendencies a re-
eovery in values would promptly fol
low, and the rise would be materially
accelerated by the present outstanding
short interest. Depression in the steel
trade is less acute, and idle wooden
looms are beginning to restart now that
they can better estimate the effect OF
the new tariff. The more distant out
look for money is for relatively easier
rates, although such can hardly be an
ticipated before the middle of January
and some stringencv may occur in con
pection with the closing of the year
January disbursements aggregatinl
about s250,000,000 will shortly be due
and the December investment demand
should be an element of support, espe
cinlly in the bond market and for high
grade shares
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