The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-26

OF liquidation. when 10 many signs are
afforded that trade and industry have
more reason TO he hopeful for the fu-
ture than to he apprehensive. Conditions
in Europe, where trouble for the busi'
ness world began to brew two years
ago. seemed lately to be In the way
Of Improvement. Conditions a, home
have suffered from the postponement
Of one optimistic expectation after an
other, directed chiefly toward political
influences. but beyond the darker as
poets Of present politics are the visible
evidences of an impending popular re-
vulsion from the violent political mania
for excessive changes in the terms OF
business effort that have helped TO
make business poor Of late. Moreover,
the country has already progressed far
into n crop sea son full of the most
cheerful promise for abundant harvests
which will contribute toward bust
ness revival.
At such n juncture 1t Is Indeed a
tragedy which is betokened by the col
lapse Of the Clafln company. As nearly
as can be dscerncd just now 1t Is the
outcome OF n peculiar combination OF
adverse trade factors, politically en-
pha Sized operating on an unwieldy
structure OF interrelated concerns too
much sustained by borrowed money in
comparison with the capital actually
owned. There Is so much that Is en-
ccptional about the Clafiln organization
and system as to prevent 1t from being
regarded as typical Of American bust
ness positions. but one thing which
the failure In question indicates Is that
there has been not lack but surfclt
OF borrowing facilities In this country.
Notions about the existence OF
money trust are curiously COMPOUNDED
By the revelations Of the Claflin failure.
They suggest that 1t was not too little
credit available but too much which
brought on trouble: that II was the
ease with which credit had been pro-
cured that enabled the company to
reach n stage Of overextenslon from
which II could not retreat when credi-
tOTS DttNStu iOt rtllitLntul.
Rather curiously also the trouble
was precipitated not by the stoppage OF
credit at the financial centre which Is
supposed to harbor Il money trust, hut
by the curtailment Of accommodation
on the part Of interior banks which, by
the thousand. had been accustomed to
treat the so-callcd Claim two maine
paper as commercial consols." and had
customnrly provided market for
about three-fourths Of the amount OF
paper issued.
II Is Of good omen that banking in
terests are already engaged In the pre-
| llminarles TO a reorganization of the
| Clafiln undertakings that have been in
volved In the embarrassment. Through
reorganization q sounder basis will be
laid for subsequent development. We
wonder. however. IL these phases Of the
situation will escape the attention Of
political Bcdlamites. who may seek Ia
exploit the Clafiin failure as the con.
trivance of conspiracy to supply an
"object lesson
There has been enough irrational pol.
tiles aimed at business to warrant the
! apprehension that folly Of this kind
will be INDUCED Nevertheless. 1t will
not appeal to the common sense Of the
country to suggest that 50 great n
wreckage Of commercial fortunes Is
voluntarily incurred or willingly per.
mitted for the purpose Of teaching any.
thing, although there are undoubtedly
lessons to be derived from it.