The chronicle=news., 1914-08-11
THE REAL TROUBLE
- WITH BUSINESS


From Bache's Review.
1t Is an amazing thing that the
Democratic party has not put It's
foot on the scorpion. which is caus-
ing tine larger part and the basic part
of o :. trouble. instead of trying to
brace people up to believe that times
are good.
This is due undoubtedly to the SOL
idly thick atmosphere OF politics
which prevails everywhere at Wash
ington and which distorts every VS.
ion that comes into its ba!cful influ-
ence.
The one great bottom cause of all
the business depression is the condi-
tion OF the railroads.
But the country merchant. the
business man in the interior cities
and towns, and even those in the
larger cities and ccnters. have not
analyzed conditions to find out why
business is bad.
II they had done 50 they would
have found out the real trouble; how
the poverty of the railroad has disin
Iined them to buy. first because they
were under pressure to make ends
meet, to meet fixed charges and to
rake dividends. Not only that, hut
here was no money to be had even
had they been inclined to buy. none
forthcoming from the putting out of
new securities. This was the case
because the average investor is one
Who. quite different from the busi-
ness man, analyaes conditions criti-
ally and seeing the plight of the
| -ailroads has refused to put his
money into new railroad security,
fearful OF reduced dividends. and in
some cases aDprehensive OF bank
"uptcy.
Consequently the railroads, with
! more on their expenditures, and this
| has thrown into idleness a good por
'ion of the facilities of the companies
which. in ordinary times. supply the
railroads; the steel companies. the
! equipment companies, etc.
These companies in turn cutting
down their expenditures because the
ALL OdOS nave IlttIe DusIHeSs Iui
| them, have made the operations of
hundreds of other companies unprof-
liable, necessitating the limiting of
their purchases; and so the wave of
retrenchment and idleness has spread
all down the line until 1t has reach
ed nearly every business in the Unit
ed States. ~
This is because the business of the
railroads With other companies is so
large-25 per cent probably of all
the business done in the United States
that such cessation of buying op-
erations is bound to hold up and de-
press the workings of the whole fin
ancial machine. ~.
Some idea of the position which
the important newspapers are now
taking in this matter may be learned
from the following parts of an edi-
torial recently printed in the New
York Evening Post:
THE WORLDS cartoon of today rep
:esents Uncle Sam as awaiting dis
consolately the arrival of the belated
train bearing the railroad rate de-
cfsion. His handbags. marked Indus
try and Business. are by his side; the
whole idea being that nothing in our
business life can move until the long
awaited decision comes in view. That
this is an exaggerated portrayal of
conditions, no one will, we think
deny; eXaggeration is one of the
STOCK weapons of the cartoonist. how
ever justifiable. 1t is idle, all the
same. to deny that there is a RAPIDLY
growing feeling of Injustice in rail-
road circles and in far-reaching in
dustrial ones directly or indirectly
allied with our transportation lines.
1t is now Ia months since the rail-
roads petitioned the interstate COM
merce commission for an increase in
rates, May IA. 1913. being the exact
date. The railroads having an
nounced their new rates, the CON-
mission then suspended them until
March 12, 1914, date now four
months in the past. The railroads
were first heard in argument in the
last week of November of 1913, the
arguments being finally closed on
May l last.
The delay has approXimated a
scandal. The very fact that this is
the most important decision that it
has been called upon to make. that
the railroads have not dared to buy
supplies save to live from hand to
mouth, and that a large number of
legitimate new enterprises or devel- |
opments of old ones await the find |
ings of the commission. should have |
been a compelling reason for the ut