Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1914-04-29

the wars of the last half-century on
business conditions and security
prices. Those wars of chief influence
were the Franco-Prussian, Spanish
American, Boer, Russo Japanese, and
the Balkan wars of 1928, and they
show many phenomena in common.
knowledge Of these may now prevent
some unnecessary loss.
Just before and usually accompany
ing the outbreaks, security prices have
fallen sharply; money rates advanced,
and commercial activity decreased.
This early depression has seldom lasted
long and has been followed first by ir-
regular fluctuations in securities and
then pronounced recoveries. In our
war with Spain, the large disburse-
ments by the government stimulated
production and distribution of mer-
chandise which is very likely to be re-
peated, if the Mexican imbroglio re-
suits definitely in war. This is par
ticularly so because stocks of mer-
chandise are unusually reduced.
The period between the early de-
preston and recoveries has varied ac-
cording to the length of hostilities, as
indicated by the first battles This
period has ranged from few days to
few weeks. although the effects of
! the recent Balkan wars were length
ened by a very strained money mar
ket the world over. AS a rule, how
ever, the effects of war have scarcely
been reflected before the markets be-
gan to discount the establishment
of peace by price advances. With the
J % L. 1t.,l. N,,,
| tile conditions in the United States
have not been materially affected dur
ing recent wars.
The effect of wars, both direct and
through interrupted production, is
often apparent in both commerce and
finance long after war has subsidized,
although not always. Worldwide de-
preston after the Franco-Prussian
war and buoyancy in the American
markets following the war with Spain
are conflicting precendents.
The declines in stocks last week
correspond very closely to those at the
beginning of former wars. With some
stocks representing properties in Mex
leo the fall has been especially severe,
destruction of property and cessation
of dividends being feared. The pros
Il
ment than the country has known
since the height of Porfirio Diazs
power, following American interven-
ton, should not be lost to sight in
the heat of prevailing excitement
Mexican investments should be strong
er than ever before should war be car
ried to what seems a logical conclu-
sion. The promise of good crops and
possibility of less politics in business
nd TO 1A lynli hot orlF
periences Of previous war times will
be repeated, and the first declines
prove the worst.
Just before Mexico monopolized the
attention of both the Administration
and Congress, President Wilson was
reported as resolved to carry out his
program for trust legislation. One
of the most far-reaching of the bills
under consideration deals with the
holding company subject. I have ex-
cellent reasons to believe that the
President, as well as leading members
of Congress, is prepared to distinguish
very carefully between organizations
loosely called holding companies and
to recognize fully that purpose and
not form of organization makes a cor
poration against or in accord with
public policy.
Such an attitude is entirely accord
ing to legal decisions and govern
mental practice, as may be readily il
lustrated. The holding company came
into disfavor because of several con-
spicuous instances wherein it was used
as a means of suppressing competition
between railroads or industrial COM
panieS that were naturally competi-
tive. 1t is only necessary to recall the
Northern Securities, Standard Oil and
other famous cases involving COM
panies of this class to appreciate that
it was acts that were on trial and the
form of organization was simply a
means whereby these acts We're made
possible. The companies were dis
solved because they had established
unnatural monopolies.
In a field where the holding COM
panY is a means for furthering public
welfare, however, the proposition is
entirely different, and the most obvious
illustration is public utilities. The
principle that lighting, power, and
street railway properties are natural
monopolies has become recognized by
Public Service Commissions through
out the country. and the reason is
that they serve their communities best
as such. A single company can op-
crate more cheaply and thereby at
lower rates to the consumer than COM