Fifty years in Wall Street
letting such people severely alone, and if you have been in the habit of
being imposed upon by such characters, you will find your happiness, as
well as your cash, greatly increased by prudently avoiding them.
There is another subject of signal importance, to which I invite your
earnest attention.
You must ever bear in mind that while, when you become citizens, you
will possess certain rights and privileges—such as the elective
franchise and equality before the law—there are, as well, sacred
obligations and duties imposed upon you, as citizens, that should be
faithfully regarded and performed.
To properly understand and appreciate these duties, you should, I
reiterate, make a careful study of our system of government, and
acquaint yourselves with the manner in which municipalities, states, and
the nation are governed.
As you mature, attend political meetings and read and discuss economic
questions of the day; for public discussion is one of the best
quickeners of individual thought and expression. Be prepared, when the
time comes, to actively participate in the affairs of your city and
state as well as the nation, and stand always ready and willing to lend
your aid to the uplifting of the government to the highest ideals of
Democracy, or Republicanism, as you see them.
If I should add a further word of advice it would be an appeal to you to
ever cherish, deep in your hearts, undying love of country.
Not only be ready to defend it with your lives; but constantly cultivate
and encourage the inspiring qualities of civic pride and virtue, so that
your whole future career will reflect a sincere and patriotic affection
for and just appreciation of the noble institutions of our great
republic. As, however, you are doubtless all true patriots this advice
may be uncalled for.
Leaving, these few precepts with you, I wish to assure you that in
whatever you may undertake, in banking, trade, or the professions, you
will have my good wishes for your success, and if I have planted in your
minds seed that will bear good fruit, it will add to the pleasure I have
enjoyed in addressing you and giving you incidentally, as students of
American social conditions, my experience of human nature, for, in your
case particularly, the proper study of mankind is Man.
------------------------------------------------------------------------
CHAPTER LXXXVI.
THE FINANCIAL AND TRADE SITUATION AND
PROSPECTS.[12]
Footnote 12:
An address delivered at the Annual Banquet of the National Association
of Cotton Manufacturers, at the Hotel Brunswick, Boston, on Thursday
evening, April 16, 1908, by Henry Clews, LL.D.
In familiarizing myself with the history, scope, and objects of the
distinguished organization I have the honor to address—The National
Association of Cotton Manufacturers—I was impressed by the vast extent
and importance of the interests it represents through its membership,
which covers not only New England but the whole manufacturing world of
the United States, to say nothing of foreign countries in which it has a
notable representation.
Such an organization is obviously capable of exerting great and lasting
power for good in the improvement and development of the cotton
manufacturing industry in this country, and incidentally it cannot fail
to benefit all our manufacturing interests, for there are ties, visible
and invisible, that bind them all together in a bond of mutual sympathy.
How immense these interests are is almost beyond computation; but we may
form some idea of them from the fact that the capital stock of the
textile mills, print works and bleacheries represented by your
Association’s own members alone, aggregates no less than $334,500,000,
without counting their surplus.
Your statistics further tell us that in these mills are 17,157,637
spindles, 1,472 sets of woolen and worsted cards, 5,849 knitting
machines, and 67 printing machines. These figures are eloquently
suggestive of the country’s manufacturing enterprise and skill, which
have kept pace with its rapid growth, and the progress of mechanical
science.
Beyond all this, you have $400,075,000 more capital in the affiliated
manufacturing industries of cotton cloth, cotton, textile machinery,
mill supplies and the like, represented by your associate members. This,
indeed, is a grand exhibit.
So your association is the representative of $734,586,000 of capital, a
large item in the national wealth of the United States. But, great as it
is, it will continue to grow with this great and ever-growing nation,
and with it will come still further improvements in mechanical
processes, methods and machinery, and a far wider foreign market for our
manufactures, especially in the Orient and South America, where the
British and the Germans have dominated trade in the past.
This association in its work for the advancement of cotton manufacturing
interests, and particularly in the promotion of their commercial
relations, and whatever relates to improvements in manufacture, is a
valuable ally of the motive power that turns the wheels and runs the
machinery of the mills; and I congratulate you on being united for a
purpose so conducive to both the prosperity of a great manufacturing
interest and the national welfare.
I will now turn to the main subject, the financial and trade situation,
present and prospective, in which I find much that is encouraging and
favorable to a general betterment of conditions from this time forward.
With regard to business conditions and prospects, the general sentiment
of both Wall Street and the rest of the country is optimistic, and to
this may be attributed the extensive recovery of the stock market that
has already taken place since the crisis that began in October. Although
the dealings in stocks have been very largely professional, the
improvement reflects the confidence in the situation of the rich Wall
Street men who have led the movement, and confidence, like distrust, is
contagious.
The absence of any considerable buying by the outside public has been
conspicuous, but so also, since the end of 1907, has been forced or
voluntary liquidation. Hence, there being no pressure to sell actual
stock, it was easy for the powerful bull party at work to advance prices
against the short interest, which was very large; and the bears were
driven to cover their contracts at a heavy sacrifice of their previous
paper profits. But, like the poor, the bears are always with us, and
their expressed views as to trade conditions and prospects are, of
course, as pessimistic as those of the majority are the reverse. But the
majority rule, and Wall Street never fails to discount the future. It is
the great financial barometer of the United States.
Leaving sentiment aside, there is ample scope for differences of opinion
as to the exact situation and the future, so conflicting are the reports
that come to us. In some sections, and some industries, very different
conditions are reported than those that prevail elsewhere, and bankers,
merchants and manufacturers in the same towns disagree as to things as
they are.
This shows that we are in that uncertain transition period which always
follows panic; and how long it will last, is the problem that business
men all over the country are now trying to solve. Meanwhile the rise in
stocks, which has been encouraged by the banking interest largely for
the sake of its influence in promoting confidence among the people of
all classes, may fairly be looked upon as the precursor of substantial
improvement in general business.
Yet, however much we may hope for quick recovery from the effects of the
crisis, we should always look unfavorable facts squarely in the face,
for self-deception is the worst kind of folly. We must consider the
worst, as well as the best, features of the situation, in order to gauge
it correctly; and the reduction of ten per cent. in the wages of cotton
mill operatives in New England, and the working of many cotton, woolen
and other mills on part time only, and the shutting down of others,
shows how much manufacturing industry there, as well as elsewhere, has
been affected by the severe ordeal we have passed through.
But, so far as the banking institutions were concerned, Boston enjoyed a
larger degree of immunity from trouble during the crisis than any other
city, a fact that bears testimony to their soundness and conservatism.
Boston may, therefore, well pride herself on this memorable
circumstance, the result of good banking and good business methods. She
had, fortunately, no speculative capitalists with chains of important
banks under their control, as New York had.
The crisis accomplished one good thing, and that was the sweeping away
of this unsound banking, which had become a menace not only to New York,
but to the whole country.
The best banking authorities believe that actual business improvement is
already making headway, although there is no uniformity in it, the
recovery in some places, and some lines of business, being decided,
while in others it is barely visible. Thus the Southwest, and its great
distributing center, St. Louis, report a larger degree of betterment
than any other section, while Chicago, like the Eastern and Middle
States, reports comparatively little.
In the present stage of recuperation, the wage problem is forcing itself
more and more upon public attention, and especially upon that of mill
owners and the railway companies. The urgent necessity the railways are
under of reducing them, to offset reduced earnings, is met by the
unwillingness, or refusal, of the men to have them reduced. They have
been encouraged in this attitude by President Roosevelt’s action, and
now the labor leaders are urging Congress to legislate in support of
their position. But Capital has its rights as well as Labor.
The railway companies, as an alternative to reducing wages, have
proposed an increase in freight rates, but shippers are up in arms
against this, particularly manufacturers; and the authorities of the
States, as well as the Interstate Commerce Commission, signified their
opposition to it. The railways, meanwhile, have kept pace, as far as
practicable, with the contraction of traffic, by discharging large
numbers of their men. In this way they have materially reduced their
expenses, while they report increased efficiency by the labor still
employed, every man in these times being anxious to hold his place by
doing good work.
That is to say, jobs being now scarce, men want to keep their jobs
instead of being “laid off,” as the phrase is. This of itself is a
wholesome effect of hard times.
The labor problem is one of peculiar difficulty, and substantial,
permanent improvement in trade and securities will not be seen until
there has been a complete readjustment of commodities, prices and wages
in accordance with the altered conditions. To insure steady work for
labor, and a fair profit for employers, why would it not be wisdom for
the labor union leaders to agree to a contract to last for the coming
four months only, consenting to a reduction of 20 per cent. in wages?
Readjustment is a harmonizing process, and harmony promotes recovery and
the full development of our powers and resources. This is what the
business situation imperatively calls for now, and all business men
should do their best to foster it, and so work together as a unit, for
in unity there is strength. We have an example of it in our United
States.
The cotton goods industry in New England has, I know, been much more
severely depressed by the crisis than was at first thought possible;
but, fortunately, the losses sustained will be the more easily borne