The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-08
FINANCIAL REVIEW
OF THE PAST WEEK
Political Considerations Clearly
Uppermost in Situa-
ton Now.
"A LACK OF CONFIDENCE
An Illuminating Expression Of
European Opinion on
Our Conditions.
A LACK OF CONFIDENCE

Rrees OF effectiveness a political embargo
has been laid on economic activities and
holds them In restraint. With different
shades OF warrant politics is operating
AGAINST the prevalence OF business and
financial confidence. Sentiment IL suf-
fused with political considerations. and the
conJectural consequences OF political effort
are the largest sum In the business and
financial reckoning.
without entering into discussion OF
the question as to whether this Is as II
should be II suffices to recognize the fact.
Political disturbance of business minds
may be only a classical repetition OF a
familiar phenomenon incidental to a wide
spread economic upheaval. but the con-
trolling force OF political considerations
nj such time Is equally classical. and IL
Is a reasonable prediction that politics.
having had leading share In accentuat-
Ing economic contraction, must figure In
the promotion OF business and financial
recovery once recovery Is In order. This
may come about through evidence OF .
revulsion In our modern democracles from
the extreme Of political advance. which
Is still in progress. or through the gradual
adaptation OF trade, Industry and banking
to the new political conditions of economic
endeavor. But II II Is admitted that poll
tics has n responsibility for augmenting
the prevailing depression the banking and
business community must probably attend
political developments for the Inaugural
ton Of new forward economic move
ment
Such a movement must be based on
more substantial and valid grounds than
politics alone affords. and survey OF
the immediate situation shows that most
of the necessary physical factors are
given on which economic recovery could
be predicted. The world Is full of oppor-
tunities for the creation of wealth by the
exploitation OF natural resources through
the prosecution OF new enterprises In
tended to accommodate with increasing
comfort a continual growth OF popula-
ton. Financial and commercial affairs
have been placed In satisfactory shape by
widespread and protrncted liquidation to
facilitate the prosecution OF new enter
prise.
or no country In the world are these
statements quite as true as OF the United
States. and the agricultural year has
throughout all countries in the CONNER
cal area, and especially In the United
States, made n propitious beginning. with
encouraging auspices for copious crops
In the main. There Is enough here to
suggest that recovery II not expansion
should be under way In trade. industry
and finance, but 1t is agreed that we are
afflicted with depression. What else can
there be to account for this than politics :?
10 a. ldlT OF current
ness in many lines. but taking the coun-
try as whole. and taking the world az
II whole, economic reaction is seen every
where.
Business which caters 60 day to day
consumptive requirements Is sustained be-
cause IL has to be, but this is not the
business which makes what is commonly
called prosperity. 1t is forward business
II Is new enterprise out OF which pros
nprity evolves hIlt epfarnriaa ia
everywhere held in check. Restraints are
not imposed by lack OF funds avail
able for investment in new undertakings
Liquidation and economy and the incre-
ment of capital. which goes on even when
business Is slack. have taken care Of the
physical factors Indispensable TO the car
rying out of projects invited by the pos
sibllities OF future profit. 1t il conf
dence. the other Indispensable ingredient
OF new enterprise. which Is lacking. and
1t is clearly politics which has impaired
confidence.
Perhaps II Is chiefly the vast changes
In the times of employment OF capital
which politics Is bringing about tina.
makes for the loss Of confidence. A
settled social order is essential to the
expansion of Investments. The ordinary
risks which attach to commitments for
the sake Of future profit are enough for
capital to court without submitting to the
hazards OF unknown quantities In the
political category. Nevertheless, there is
something to be said also against the
contemporary political programme. De-
mocracy Is attempting too much In all
the leading democratic countries and in
mono Is the excess Of political ambition
moro apparent than In the United States
In addition, political programmes af-
fecting business. particularly In our own
country. are directed less by an Intelligent
comprehension OF business requirements
than by curiously compounded blend
OF malign and benign purposes TO Use the
police power of the State to repair the
Inequalities Of human fortune. We have
seen in the last year or SO great amount
OF governmental activity which deliber-
ately excluded from any participation in
shaping or guiding 1t the practical knowl-
edge of business experience. 1t Is no
wonder, under such circumstances,
that all business which depends on new
enterprise Is to-day hating. and that the
business world Is to be described In
terms OF depression.
It is very much the same abroad as IL
IL at home. No matter what causes
of general nature precipitated the con-
vulsion that seized the financial and
business organization In 1912, II Is poll
tics in various lands which Is preventing
return of the organization to Its
normal and proper functioning Washing
likes 10 DtlltNo tHdt
ness depression Is only part OF world
depression applicable on economic grounds
alone, but this view overlooks the accel-
Grating causes furnished by politics. nota-
bly, In France and Great Britain. Con-
fdence has been upset in Old World
financial centres by governmental mani
festations differing in kind from those
which have impaired confidence here, but
with little or no difference In effect.
Nor among the many things which
Washington does not seem TO understand
about business does II seem to be under
stood by the present Administration what
depressing refiexes are induced by the
reciprocity OF political influences between
leading nations. A striking illustrad ton
Of these influences was. however, afforded
a few days ago by the address which the
managing director Of Germany's leading
| bank, the Deutsche Bank delivered to an
American gathering In Berlin Herr Won
Gwnner. after expressing establishment
| that there should be 80 much political OPP
position to an allowance of profitable
rates for American railways. said: such
| a state of affairs Is n deliberate menace
to the prosperity of the republic. and be-
cause the prosperity of the rest Of the
world is closely bound up with that OF
America Is II a danger to all OF US.
In seeking to estimate the responsibility
Of politics for the existing business de-
preston In the United States assistance
will indeed be furnished by consulting the
denotes, This country has always had
1