When life goes by like a song;
But the man worth while
Is the one who will smile
When everything goes dead wrong.”
Whenever you see a chance to help a fellow-man who is not as well
equipped as you are, give him a lift up. If you do so, _you_ may forget
it, but _he_ never will, and you will secure a friend who will be
looking for a chance to do you a good turn.
An old clergyman used to preach that true religion consisted in doing
something good each day, so that when one went to bed at night, he could
feel that the world was a little better, or some one a little happier,
because he had lived that day.
Chemistry is going to play the important part in the next twenty-five
years that electricity has in the past quarter of a century. Fortune
awaits any man who can make use of waste material. Millions of dollars’
worth of this is thrown away every year because the mind of man has not,
as yet, been able to solve the problem of utilizing it. Students are now
at work to this end and who can tell but one of you may be the man who
will play an important part in this great work of discovering new
sources of wealth and progress. If so, he will find a bigger gold mine
than Wall Street.
Railroad magnates are on the watch for improvements and devices of any
kind that will tend toward saving time, increasing facilities, lessening
liability of accident, or saving in cost of construction or equipment.
Here is a broad field for action and for fertile minds to work in.
Copper metal is in such demand that the price has recently been higher
than in a generation, namely, twenty-six cents a pound, and some cheaper
metal may be found to possess qualities that will allow it to take the
place of copper in a degree.
Surgeons and physicians now perform operations and effect cures that
would have been considered miracles in my younger days, and still we
find each year that they have much to learn. It is possible that I am
now addressing some youthful savant, who will startle the world in the
distant future by still more miraculous skill.
Wherever you go, whatever you do, keep your eye on the star of Hope.
Every man has his place in the world if he can only find it. Opportunity
knocks at every man’s door at some time during his early life. Look
sharp and secure it when it knocks at yours, and grab it before it
flies.
But, to all I would advise that when you have found occupation, whether
it is in the professions, or not, strive to please. Don’t expect to sit
in high places at once. Remember that most of you are in the junior
class and can only graduate to a higher class by merit. Study well your
surroundings and what is ahead of you. Carefully consider what may await
you. If you see no evidence of a position worthy of your hopes, do not
hesitate to make a change. It is better to change several times while
you are young than to waste your time by remaining where you cannot
expect to achieve success.
One of the fundamental principles of business is that civility costs
nothing and always pays good dividends, both in and out of Wall Street.
Very often the temptation will come to you in dealing with a nervous or
cranky customer or client, to give vent to your wrath or impatience. My
advice is don’t. That is also _Punch’s_ advice to those about to marry.
To succeed in holding and pleasing such a customer is a high
accomplishment, and sure to attract attention.
The Almighty has endowed every man with two important allies, namely,
courage and conscience. The latter can be blunted if not heeded and an
elastic conscience is worse than a wooden leg. Be cautious not to enter
into any deal or occupation when your conscience warns you that you are
treading on dangerous ground; but, having made up your mind that you are
in the right, press forward with all the energy that is in you. If you
do not succeed, have the courage to rise and try again and renew the
struggle. Nearly every man who has made a great success in business life
has, in his earlier years, suffered reverses. These failures have been
lessons that have taught him the way to win. You may often be
temporarily discouraged by seeing success come to the dishonest and
unworthy, but remember that such cannot command the respect of their
fellows. There is more in life than “filthy lucre,” although Wall Street
prizes it immensely. A contented mind is more to be desired than great
riches, and, if you are poor, be independently poor. Andrew Carnegie
says that to die rich is to die disgraced, so guard against that.
You are really now on the threshold of a new school—the school of Life.
As the old forest guides were taught their wood wisdom by the rocks, the
streams, the grass, the leaves, and kindred objects, so you will learn
by actual contact with all the customs, rules, and complex situations of
the business world, what to do and what to avoid.
Many young men are disheartened before they start in business by the
fact that so many lines of manufacture are controlled by big
corporations and trusts. As I have already shown, they hear the talk of
the agitator and discontented that a poor man has no chance in life. Let
me repeat that brains will always command a premium and that young men
who have brains, backed by energy, will always be in demand. You must
prove that you have these requisites, by good work, and you will find
capital will seek to combine with such qualities. You may start in
business, or the professions, with your feet on the bottom rung of the
ladder; it rests with you to acquire the strength to climb to the top.
You can do so if you have the will and the force to back you. There is
always plenty of room at the top. The men now at the top have their
minds and hands full, and are eager to delegate to smart assistants some
of their work so as to ease the burden they bear. Success comes to the
man who tries to compel success to yield to him. Cassius spoke well to
Brutus when he said: “The fault is not in our stars, dear Brutus, that
we are underlings, but in our natures.”
Form the habit as soon as you become a money earner, or money maker, of
saving a part of your salary, or profits. Put away one dollar out of
every ten you earn. The time will come in your lives, when, if you have
a little money, you can control circumstances; otherwise circumstances
will control you. You may often have to practice self-denial to save ten
per cent. of your earnings; but compel yourselves to do so and you will
never regret it. Most of the leading men in business life to-day started
out less well equipped with worldly goods or education than any of you.
What they have done at least some of you can do.
See that the money you spend is well spent. By careful judgment in this
respect, you will acquire a habit which will cling to you in after life.
Many a man makes bad investments because he did not learn to be cautious
in the beginning of his business career.
The improvements in the past quarter of a century have been marvelous
and the end is not yet. There are many new ideas being formulated, and
some of you may bear an important part in solving problems which will
revolutionize the world. Electricity and chemistry are perhaps still in
their infancy, and latent forces are floating around unknown to men. The
next fifty years may indeed witness changes just as great and startling
as we have seen during the last fifty.
I once advised young men to go as soon as possible into business. I have
changed my opinion somewhat and think that it is well to get a technical
training in a business at college where special courses are taught. I
still consider, however, that if a young man is to enter Wall Street he
will learn just as much by going into the Street as soon as he
graduates, and I consider a large office just as good as any business
college, where a pupil can learn by actual experience as well as he
could by a theoretical course in a business college. Almost every man in
a leading position in a banking house has started as a junior clerk and
gradually worked his way up.
The term “Get the habit” has become quite a metropolitan by-word and
brings me to speak on this subject, for the habits we acquire have much
to do with our progress, and as Lamartine has truly said:
“Habit with its iron sinews
Clasps and holds us day by day.”
In the various matters of detail that make up the sum and substance of
business—considered as trifles by the foolish, but by the wise as
important and vital—such as our methods of occupation, our time, and our
manners, great care should be taken to acquire the sterling habits of
industry, punctuality, and sobriety. The most watchful and jealous care
should ever be exercised by you all in this regard. A single deviation
from the straight path may mean much, for habit is not of sudden
acquirement, but is formed (and also lost) act by act, thread by thread,
as we progress in the journey of life.
If you hold a fiduciary position in a Wall Street banking house, or
bank, remember that the information you acquire regarding the secrets
and inside facts of the business of your employers belongs to them alone
and must not be divulged or spoken of to anyone. Very often you will
hear of “tips” being circulated there as inside information. Never put
faith in such tips, as an employee who would give away the secrets of
the firm he works for would be unscrupulous enough to lie to you, and I
warn you not to make a close friend of such a person. Do not think that
I look upon you as boys in tendering this piece of advice, but rather as
a veteran addressing new recruits.
The trait of tenacity of purpose is very often a natural gift; but if
you have not this persistence by nature you must cultivate it. For, with
it, you can succeed, you can make difficulties bend, you can make
opposition give way, and doubt and hesitancy yield to confidence and
success. Without it, the more shining qualities of our nature will not
insure your success, nor avert failure and disaster.
At the time the Suspension Bridge over the Niagara River was to be
erected the great question was how to get the cable over. A kite was
elevated, which, with a favoring wind, alighted on the opposite shore.
To its insignificant little string a cord was attached which was drawn
over, then a rope, then a larger one, and then a cable; until the great
bridge between the United States and Canada was completed.
First across the gulf we cast
Kite-borne threads till lines are passed,
And habit builds the bridge at last.
In like manner, my friends, our whole character is made up of little
things, of threads and strands and ropes of habit. Let us be sure that
they are always good and sound.
Next to the unwisdom of selecting and following bad or incompetent
advisers in matters of business, there are also certain persons whom, if
you wish to do well and make a fortune honestly, you should be careful
to avoid. You will not always know them by their appearance; in fact,
that is often the worst rule to go by, for they are generally well
disguised. It is in their manner and conversation that you will find
them out, and, that this be the easier, I have made a collection of
their characteristics, as follows:
Avoid a man
Who vilifies his benefactor;
Who unjustly accuses others of bad deeds;
Who never has a good word for anybody;
Who, when he drinks, habitually drinks alone;
Who boasts of the superiority of his family;
Who talks religion downtown in connection with his daily business
affairs;
Who talks recklessly against the virtue of respectable women;
Who runs in debt with no apparent intention of paying;
Who borrows small sums on his note or check dated ahead;
Who will not work for an honest living;
Who looks down upon those who do;
Who is always prating about his own virtues;
Who imputes bad motives to those trying to do good;
Who betrays confidence;
Who lies;
Who is honest only for policy’s sake;
Who deceives his wife and boasts of it to others;
Who chews tobacco in a public conveyance;
Who gets intoxicated in public places;
Who partakes of hospitality and talks behind his entertainer’s back;
Who borrows money from a friend and then blackguards the lender.
With a population of 85,000,000 people, which this country now has, it
is easy to find associates in life without selecting men possessed of
any of these characteristics, and life is the better worth living
without them.
You will both save and make money by strict observance of this short
catalogue of men to avoid. You are not called upon to do anything or to
risk any money in the exercise of this discretion. It simply consists in
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
because of the large profits of previous years. Notwithstanding the cuts
made in standard goods, the demand for them is still abnormally light,
and hence stocks are accumulating in the face of the heavy decrease in
production.
No wonder, therefore, that those most intimately concerned are more or
less at sea as to how long this depression will continue, and what the
results will be. They see certain grades of goods that were selling at
8⅜ cents a yard just before the panic now being offered at 5½ cents, and
this is an object lesson that tends to make even the most optimistic of
them a trifle blue for the time being. But this is precisely the time
when courage and confidence in the situation are most needed. I give you
all credit, however, for being equal to the occasion.
With eighty-five millions of our own people to clothe—to say nothing of
the rest of mankind—manufactured cotton products will before long be in
demand again at rising prices, for civilization demands clothes in hot
weather as well as cold.
Meanwhile, endurance is called for, and will doubtless not be found
wanting, except where special circumstances impose limits to it, and we
all know that patience is a virtue.
Recovery to normal conditions will, of course, be gradual, and it is
better that it should be so, to ensure permanence. In the meantime, it
will be a relief to the dry goods trade when sales are no longer
extensively made by cutting under quoted prices more or less sharply.
The bold, and even aggressive, action of the American Federation of
Labor in going to Washington and making demands upon Congress, and
criticizing not only the laws but the decisions of the Supreme Court of
the United States, puts a new and serious face on the old contest
between Labor and Capital. It arouses some apprehension as to the
lengths to which Labor will go, and how far its political influence may
enable it to accomplish its purposes. Politicians are ever ready to show
subserviency to Labor, merely for the purpose of gaining votes for
themselves.
We all want to see justice done to Labor, but we also want to guard
against injustice being done to Capital by Labor, and Labor’s resistance
to a reduction of wages to correspond in some degree with the decline in
the earnings and profits of those employing it, is a practical injustice
to all those outside the ranks of organized labor.
The readjustment of wages to existing conditions is, therefore, of the
first importance and should be first to receive serious consideration,
with a view to harmonizing both sides, and a prompt settlement. Half a
loaf is better than no bread, for both Labor and Capital, and it is not
to the interest of either to kill the goose that lays the golden egg.
Their interests are mutual, but Labor is posing as if they were
antagonistic. It has often done this before, but never more
conspicuously than now.
With respect to our foreign market for cotton goods, there is plenty of
room to widen it, but our exports of these, in competition with England,
Germany and other countries, are more or less checked by the high price
of labor here, and its comparatively low price there. Hence we should
constantly endeavor to overcome this disadvantage by keeping ahead of
the rest of the world in labor-saving devices, and improvements in
machinery and manufactures. We should try to surpass all Europe in the
quality, as well as the cheapness of our goods.
As we are the most inventive of all nations, and the quickest to adapt
ourselves to new or altered conditions, we shall doubtless find this
feasible, if not an easy task, whereas England, our greatest competitor
in manufacturing, is proverbially slow in changing machinery.
I once asked Mr. Andrew Carnegie what was the mainspring of his
phenomenal success as a manufacturer of iron and steel, and he replied:
“I always kept foremost in making improvements in my machinery and
methods of manufacture. Whenever a new invention that I could use was
patented, I secured it at any cost, and so kept in advance of all my
competitors.
“At one time I had two million dollars’ worth of new machinery that I
was about to install, but a man came to me with an improvement in it
that he had just patented, and I bought his patent and adopted it. In
doing this, I had to cast aside, as old material, the two millions’
worth of new machinery. But the improvement recompensed me many times
over for what I had sacrificed to make the change.”
It is in promoting improvements in manufacturing processes and machinery
that this Association, apart from its general utility, can be of great
and permanent value to the cotton mill industry and kindred
manufacturing enterprises. Ready adaptability of means to ends is as
important in manufacturing cotton sheetings, and the other products of
the loom, as in every other business and everything else.
I remember that in conversation with Admiral Sir Charles Beresford, of
the British navy, when he was visiting New York, he told me of an
instance of American adaptability to circumstances, that he noticed
while in China. The Chinese had been long complaining of the want of
sufficient width in a certain grade of British cotton fabrics that they
were using and they had asked the English agents from time to time if
they would increase the width. But nothing came of their expostulations
and requests, as the agents, after writing home, told them the
Manchester manufacturers said they would have to alter their machinery
in order to give them the desired width, and this could not be done.
But the agent of a large American dry goods house, with extensive cotton
mill interests, arrived at Shanghai, and hearing the complaint of the
Chinese, he said: “Give me your order and you can have whatever width
you want,” and he got the order. Sir Charles added: “So, you see, you
people are smart and give them what they want; besides, you make your
cotton goods heavier than we do and the Chinese like them better because
they wear longer, for when the Chinese put on such clothes they never
come off until they rot off.” Here was an instance of ready adaptability
to the occasion and market needs by an American, which the English
lacked.
An illustration of the importance of scientific investigation with a
view to the discovery of new elements and processes in manufacturing, is
found in silkine, a fabric closely resembling silk, which has come into
popular use. It resulted from the discovery that the mulberry and other
trees on which silk worms feed possess properties that could be
extracted and utilized, to a certain extent, in the production of a
silky fibrous material which in combination with fine Egyptian cotton,
made a cloth so closely resembling silk as to be possibly mistaken,
except by experts, for the silk of the silk worm. Here theoretical and
practical science were happily combined with mechanical skill to produce
an entirely new material, and doubtless there are many similar
opportunities awaiting discovery. This Association by stimulating such
investigation in mechanical science may achieve even greater results
than it anticipates.
The world’s markets offer a most magnificent opportunity for the
enterprise of American cotton manufacturers. We grow four-sixths of the
world’s crop of cotton but manufacture only one-sixth. That is to say,
we export three-fourths of the cotton we grow, leaving England and
Germany to turn the fibre into yarns and fabrics for other countries in
all parts of the world. A much larger share of this foreign trade ought
by right to come to the United States, for the foreign market offers a
field vastly larger and quite as profitable as the domestic field, if
the extraordinary profits of Lancashire spinners during the past few
years are to be taken as an index.
Last year Great Britain exported cotton goods valued at $500,000,000,
while our exports of cotton manufactures were valued at only
$26,000,000. During this same period Great Britain exported
6,298,000,000 yards of piece goods valued at $400,000,000; our exports
meanwhile being only 216,000,000 yards at $15,000,000. Here, then, is a
field for our best ambitions and skill. We cannot forever endure the
sight of seeing other nations manipulating our raw product at enormous
profits, a goodly portion of which should remain for distribution on
this side of the Atlantic.
There is one respect in which the New England cotton industry much
impresses an outsider. Your industry, I am glad to say, is, and always
has been, remarkably free from the evils of promotion and speculative
enterprise. Furthermore, it has most fortunately not been inoculated
with the fever for trusts and consolidations; although I happen to know
that such projects have from time to time been presented to your
consideration. Perhaps your refusals to entertain such propositions thus
far have been due to conditions peculiar to the industry; yet I venture
to hope that it has been not a little due to the strong spirit of
individualism which is one of the best characteristics of the New
Englander; a characteristic which I trust will be cherished for
generations to come, because it is a most wholesome and necessary check
upon the paternalistic tendencies of the day. One beneficial result of
this policy is that the cotton industry is adapting itself to the new
conditions following the panic with much less friction than in other
industries. You have lowered prices, curtailed production and diminished
costs in order to stimulate a revival of consumption in a manner that
promises to make you among the first in completing the process of
readjustment. When recovery begins the cotton trade ought to be among
the first to feel reviving influences. While other industries have been
using or misusing their newly acquired powers of combination to resist
natural tendencies, or to squeeze out dividends upon grossly watered
stocks, you have squarely faced the new conditions and trimmed your
sails accordingly. I have no doubt, therefore, that, with your mills
honestly capitalized, you will soon be going along safely and
comfortably in smoother waters when the trusts will still be struggling
against adverse conditions simply made worse by foolish resistance to
economic laws.
The most encouraging feature of our business situation now is the
prospect of an unusually large wheat crop, winter wheat being in extra
fine condition, and spring wheat having been planted under the most
favorable conditions, owing to the season for farm work being three
weeks earlier this year than last. The planting of other crops has also
been facilitated by good weather, and altogether the agricultural
outlook, at this date, has very rarely been so promising of bountiful
results.
This is a great national blessing, for the foundation of our national
wealth is our crops. Agriculture is indeed the great source of both our
national and international strength. It was almost entirely from this
source that we were enabled, from a merely nominal sum last August, to
build up a foreign trade balance of 521 millions of dollars in the first
eight months of this fiscal year, and the large preponderance of our
exports over our imports still continues, and will make the balance in
our favor at the end of the year one of unexampled magnitude.
This curtailment of our imports, especially of luxuries, has made the
shoe pinch in Europe, for we had been Europe’s best foreign customers.
But, naturally extravagant as we are as a people, we can economize with
as much ease, celerity and determination as we can spend, when the
necessity to do so arises. So we are at present economizing on a grand
scale and with great success.
We have only to consider our unlimited sources of national wealth,
however, to see that the prospect before us is one that should inspire
absolute confidence in the gradual return of prosperity in all
directions. Let us bear in mind that our agricultural products yielded
us last year, as the returns of the Department of Agriculture show,
$7,400,000,000.
Mining and manufacturing were the next largest sources of our national
wealth. The metals mined yielded $3,000,000,000, and this metal product
was converted by manufacturing into materials that had a market value of
fifteen thousand millions of dollars. Thus the agricultural products,
metals mined and metals manufactured, in the year, had a value of
$25,400,000,000. We may, therefore, well and honestly say that this is a
great country. “Long life to it!” as an enthusiastic Irishman was once
heard to exclaim. “By jabers, it can’t be beat!”
The market for raw cotton has, of course, been handicapped by the
depression in the cotton industry, and the efforts of the Southern
planters to advance the price of the staple very materially by holding
it back instead of marketing it, have failed, as they deserved to fail.
Cotton is now lower than it was during the crisis, and about as low as
at any time in this crop year, being 300 points, or 3 cents a pound,
below the season’s top notch. But cotton is still king in the factories.
This decline is equivalent to $15 per bale, or a hundred and eighty
million dollars on a crop of twelve million bales. So spinners and spot
buyers in general have not for two years had so good a chance to
purchase for summer and autumn delivery, and advantageously cover their
season’s requirements as they had last month and this. But spinners have
taken more than a million bales less of this season’s crop since the
first of September last than in the same time in the previous year.
The Census Bureau in its final report for the season tells us the total
crop ginned up to the first of March last was 11,261,163 bales,
including “linters”; and it estimates that 127,646 bales remained
unginned on March 1. Allowing for the usual under-estimating of the
cotton ginned in the reports to the Government, it follows, from the
figures, that the spinnable cotton from the last season’s crop will
aggregate no more than 11,500,000 bales. This is with the average net
weight of a bale, 501½ pounds.
The statistical or technical position of cotton is therefore bullish,
notwithstanding the very large falling off in consumption and the
requirements of spinners, this year, both here and in Europe, as the
indications are that there will not be a very heavy or unmanageable load
of cotton to be carried over into the new crop year, which begins on the
first of September.
One very hopeful sign of the times is the check that has been given to
radical state legislation concerning railway corporations by the Supreme
Court of the United States, declaring the rate laws of Minnesota and
North Carolina in certain respects unconstitutional. The decision
practically denies the right of a State to enact and enforce rate laws
against interstate railways. This takes the wind out of the sails of a
good many Western and Southern political agitators, and makes the State
courts more definitely than ever subservient to the Federal Courts. The
clash as to jurisdiction between the two courts which we witnessed in
the South last year is therefore not likely to recur.
The decision was based mainly upon the unreasonable penalties prescribed
by the North Carolina and Minnesota statutes, but it sustains beyond all
question the contention of the railway companies, which are now held to
be at liberty to refuse to obey any State law reducing rates upon their
making affidavit that it would reduce their earnings to an unreasonable
extent. Upon such an affidavit a judge of the United States Circuit
Court can order a suspension of the operation of the law until the law
can be shown in court to be reasonable.
This is a protecting bulwark against radical and confiscatory State
legislation, resulting from the inflammatory appeals of demagogues. By
protecting the railways it protects investors, and adds to the security
of railway property, which, in turn, strengthens confidence in that
property, and confidence is what is most necessary to recuperation. Let
us therefore help to increase it.
It is the desire to promote confidence, and clarify the business
situation, that has inspired the recent utterances of President
Roosevelt, and dictated the course of the Federal law department. This
is commendable and has had a good effect.
The most spectacular event of the crisis, and its most sensational
starting point, in New York, was the failure of the Knickerbocker Trust
Company under a wild rush to withdraw its deposits on the 22nd of
October, 1907, and the subsequent suicide of Charles T. Barney, its
president; and the most satisfactory event in its later career was its
resumption of business on the 26th of March, 1908, after many trials and
tribulations. On that day, too, it received $1,500,000 of deposits more
than it paid out, a remarkable contrast to the heavy run before the
suspension. This, and the almost simultaneous payment in full of the
depositors of the Oriental Bank, a New York State institution, were
reassuring influences that did much in helping to pave the way to
general recovery, and stimulate the rise in the stock market, which of
itself had a good moral, if not material, effect upon the business
situation.
It was not till the fourth day after the Knickerbocker’s suspension,
namely, on Saturday, the 26th of October, that the New York Clearing
House committee decided to issue Clearing House certificates to the
banks in the Association needing them to pay their Clearing House
balances. Then their issue against satisfactory collaterals deposited
with the Clearing House, began at once. This was the signal for every
other clearing house in the country to do likewise simultaneously.
On the same day the detailed weekly bank statements were suspended, and
these were not resumed till the 8th of February, 1908. Meanwhile a
hundred and one millions of the Clearing House certificates had been
issued and redeemed, except some that were held by the National Bank of
North America, the Mechanics and Traders Bank, the Bank of New
Amsterdam, and the Oriental Bank, which had all failed. But these were
all redeemed before the end of March.
It was in the third week of November that the issue of Clearing House
certificates reached its maximum. But the banks had reached their
largest deficit in reserve in the first week of November, when it rose
to $54,100,000, a prodigious amount of which the public was in
ignorance.
In Boston at the same time your banks had taken out $11,995,000 of their
own Clearing House certificates, but this total was never increased.
After that the banking situation all over the country was slowly on the
mend. But, owing to the partial suspension of currency payments by the
banks, caused by runs and hoarding inspired by the use of clearing house
certificates, currency and gold commanded a premium in New York ranging
from 1 to 5 per cent. This premium was current from the time the
certificates were first issued till the end of December, 1907. The
hoarding of money was, meanwhile, enormous. After that the premium
became suddenly a thing of the past, and hoarded money was rapidly
deposited with the banks.
It is noteworthy that in the panic of 1873 the New York Clearing House
issued only $26,565,000 of certificates, and in the panic of 1893 only
$41,690,000. But these figures merely show how very much smaller New
York’s banking capital, deposits, and loans were in those years than
they are now.
The throwing out of employment through the effects of the panic of large
numbers of men, most of them of foreign birth, resulted in a larger
exodus of steerage passengers to Europe than was ever before known,
these aggregating 114,078 in the first two months of 1908, while only
50,601 immigrants arrived here during those months. The outward rush
commenced in November and it still continues with little abatement. But
as a safety valve for unemployed labor it is perhaps to be welcomed for
the time being, as it reduces the ranks of the unemployed, and when the
labor of these aliens is again in demand they will return as fast as
they went. They know on which side their bread is buttered.
Immigration is, however, no longer as necessary to this country as it
was in pioneer times. Our aim now should be to keep out undesirable
immigrants, particularly anarchists, Black Hand Italians and Armenians,
and rabid socialists who come here to make trouble, and preach doctrines
of equality and confiscation, entirely inimical to American institutions
and national as well as individual progress.
I now come to the markets for stocks, bonds, and speculative
commodities, and the recent indiscriminate attacks upon them by Mr.
Bryan and others both in and out of Congress, as hotbeds of what they
call gambling.
As one of the oldest members of the New York Stock Exchange I can, from
my long experience, testify to the integrity and high character of its
membership, and the strict discipline of that Association over those
composing it. Any breach of its rules, any deviation from the line of
fair dealing, or anything prejudicial to its interests, is promptly
investigated and as promptly punished, when proved to the satisfaction
of the Governing Committee, by fine, suspension, or expulsion. But it is
very rare for a member to be either charged with or found guilty of
chicanery of any kind.
It is therefore unjust and outrageous for Mr. Bryan and others who have
denounced the New York Stock Exchange to call it a gambling arena and
its members gamblers. They are brokers in a free market, a market open
to all the world, and they are ready to receive and execute orders from
all the world, and whether or not these orders are for investment or
speculative account, it is not for them to inquire. Still less is it for
them to discriminate against speculation, when speculative far more than
investment dealings are the life of every stock exchange in the world. A
stock exchange to have any value must be a free market.
Speculation in stocks is no more gambling than speculation in real
estate, or merchandise, although different in degree, but there may be
excesses in speculation as in everything else. The stock exchange as a
body should not, however, be held responsible for the excesses of
individual speculators, or for the dishonesty of men who embezzle in
order to get money for the purpose of speculating. Gas should not be
blamed for causing the death of a man who deliberately locks his room
door, shuts his windows tight, and turns on the gas to die.
Those who know Wall Street well, as I do, know how false a view of it
Mr. Bryan and others, including certain members of Congress, have given
to the public. If they really had known Wall Street well, and had any
conscience, they would not have said what they did say. They have
misrepresented it grossly and unjustifiably, and in their moralizings
upon it they have not reasoned, but ranted.
Some of them have even advocated the entire elimination of the Stock
Exchange. They would thus invite financial chaos and leave investors,
the banks, insurance companies, and all other corporate holders of
stocks and bonds practically without a market for their securities in
which to either buy or sell. This would be putting back the hands of the
clock of progress with a vengeance. It would be going back to the wigwam
and the canal boat, but of course it would never be tolerated and
therefore be impossible.
Yet this slandering and mudslinging campaign by representatives of both
the great political parties for political effect is none the less
injurious and reprehensible because it can never have any substantial
result, much less the destruction of Wall Street. It is scandalous abuse
of which we may have more before the November election, but it is
already high time that it should stop in the interest of truth and
justice and the public welfare.
These assailants of the New York Stock Exchange would also abolish all
other stock exchanges, and the Chicago Board of Trade, as well as all
the other grain and provision exchanges, and all the cotton exchanges in
the country that deal in futures. Perhaps they are not aware that the
farmers and planters of the West and South derive, or can derive, great
benefit from having a free market for “futures” open to them, for it
enables them to sell their crops before they are harvested, if the
prices are satisfactory and they want to make sure of them. This applies
also to the Coffee Exchange and importers of coffee.
To drive dealings in time options from the Produce and other exchanges
would be to drive them to Canada, Liverpool, and London, and let the
markets there make prices for us, instead of making them for ourselves,
all of which shows the absurdity of this clamor against speculation in
stocks and speculative commodities. Speculation is thus stigmatized as
gambling with no more reason or justice than the inevitable risks of
ordinary mercantile trade could be called gambling, for no one can
engage in trade of any kind without taking risks.
Now that the storm of the crisis has passed away, and the investigation
and prosecutions that have taken place have laid bare the corporate
evils that were rife among us, including railway rate rebating and
various forms of looting and wholesale graft by controlling capitalists,
we have come into a purer business atmosphere. Corrupt, plundering, and
law-breaking officers of banks, and railway, insurance, and other large
corporations have, in many cases, been exposed and shown the error of
their ways, and we have in consequence a higher business morality than
we had before we passed through this ordeal of purification. In other
words, the house cleaning we have had has done us good, and this of
itself is a compensation that can hardly be overrated in its future
influence. Banks and trust companies and railways, insurance, and other
corporations have been freed from much unsound and dishonest management,
and also loose, grafting and speculative practices, and we have in their
place that higher moral tone which is safeguarded by greater publicity
of accounts and more rigid official examinations under new and stricter
laws than ever before.
Thus temptation to chicanery and other corporate wrongdoing, and abuses,
by those in control of corporations, is largely reduced, and this is
important, for an old proverb tells us that opportunity makes the thief.
Good grounds for an optimistic view of the situation and the future, you
will all acknowledge, can be found in our unequaled and immense natural
resources and their uninterrupted development. These and the enterprise
of our people and our free institutions and popular government, which
makes us all sovereigns in our own right, are national blessings. They
fortify our national life, and leave our splendid growth and powers of
achievement unchecked; and our wonderful progress in the past will no
doubt be eclipsed by our still greater and grander future, with the
United States of America the foremost nation in the world.
In all this progressive movement the cotton and other mill industries of
New England, and the rest of the country, will share; and in this
natural and legitimate expansion, gentlemen, you and your successors may
look forward to, and find, the potentiality of wealth beyond the dreams
of avarice, as Andrew Carnegie did in Pittsburg. From such a great
American object lesson for manufacturers as Carnegie, you should all
derive a vast amount of encouragement, and that hope that springs
eternal in the human breast.
------------------------------------------------------------------------
CHAPTER LXXXVII.
PEACE ASSURANCES FROM JAPAN.
* * * * *
ASSURANCE FROM VISCOUNT KENTARO KANEKO, THE EMINENT
STATESMAN OF JAPAN, THAT BELLIGERENT
REPORTS ARE GROUNDLESS.
* * * * *
FABRICATIONS, HE SAYS, OF SENSATIONAL NEWSPAPERS.
* * * * *
NO APPREHENSION IN EMPIRE OF ANY DISRUPTION OF FRIENDSHIP EXISTING
BETWEEN THE TWO NATIONS.
* * * * *
Declaring that all talk of trouble between this country and Japan is the
outgrowth of “pernicious fabrication on the part of sensational
newspapers,” Viscount Kentaro Kaneko, who was special Ambassador to the
United States from Japan during the Russian-Japanese war, has written a
reply to a letter addressed him by me, in which the latter, under date
of December 5th, last, expressed the hope that no difficulties might
arise between the two countries which could not be readily and amicably
adjusted.
Viscount Kaneko, whose elevation to his present title and whose
appointment as adviser to the Emperor on all things American, came close
upon the heels of the close of the struggle with Russia, besides is one
of the present eminent Statesmen of the Empire. During General Grant’s
first term, he was a member of a commission sent here to study American
finance. Prince Ito was the head of this commission and I acted as
friendly adviser, at the request of General Grant, then President. This
commission afterwards went to London, Paris, and Berlin, and made a
similar investigation of the financial systems of each of those nations,
and on their return home, via the Suez Canal, they made a full report of
their mission and in it strongly recommended their government to adopt
the American system, which was promptly done, and I was appointed by the
Japanese Government special agent to aid in carrying out their new
financial system. I awarded the contract for the engraving to the
Continental Bank Note Co., of New York, on their successful competitive
bid, and after all the work of establishing their new financial system
was accomplished I received a flattering commendation from the Secretary
of the Japanese Treasury for my services in the matter and a very
handsome pair of Japanese silver vases as a souvenir accompanied same.
My letter, which was sent when reports of impending trouble with Japan
were numerous, is as follows:
December 5, 1907.
MY DEAR VISCOUNT:
It gives me infinite pleasure to congratulate you on the
bestowal of your present very great title by the Emperor,
knowing as I do that it is so richly deserved. No one in this
country can bear stronger testimony of your untiring vigilance
and masterly efforts in the work you had on hand in this country
during your war with Russia, and the marvelous success which
crowned your exertions. No one of your nation who has visited
this country made more or stronger friends than you did amongst
our people, and we are all hoping that the time will come when
you will return as Ambassador. It would indeed be an appointment
for the benefit of both nations, and would do more than anything
I can think of to strengthen the long-existing friendly
relations between the two peoples. There are occasional rumors
of our relations being strained, but they originate, I am quite
sure, in either Russia or Germany, owing to a desire in some
quarters to disrupt the friendship. You can rely upon one fact,
however, that if there is ever a severance, which God forbid, it
will not emanate from this side.
Faithfully yours, HENRY CLEWS.
VISCOUNT KANEKO’S ANSWER.
MY DEAR MR. CLEWS:
Your kind letter of December 5th reached me a few days ago and I
am infinitely obliged to you for your hearty congratulation on
my recent advancement to a higher rank for a modest service
which I was able to render my Emperor and country during the
late war. In performing the duties which were entrusted to me
during my sojourn in your country, what little I was able to
accomplish was due to the kind encouragement and assistance
which the friends in America so unsparingly gave me. and in this
connection I assure you that you share the largest part of it.
You mentioned about the so-called strained relations between
America and Japan. It is really a pernicious fabrication of
sensational newspapers, and I am glad that you seem to believe
it to be so too. So far as I am aware there is nothing of a
serious nature diplomatically pending between the two countries.
It is absolutely groundless, therefore, even to imagine, as some
alarmists would have us believe, that there may be a possible
disruption of the friendship which has been cemented so firmly
ever since this country was introduced by America to the family
of civilized nations in the world. I assure you that every one
of our people on this side of the Pacific is keenly alive to the
gratitude we owe you, and I think it most remarkable that nobody
in this empire seems to entertain, even to the slightest degree,
any apprehension of a breach of the friendship. Such a thing
never comes into our head. Again thanking you for your courtesy,
Sincerely yours,
(Signed) KENTARO KANEKO.
TOKYO, JAPAN, January 21, 1908.
I have kept up a correspondence with Prince Ito and other Japanese
Statesmen ever since I was first associated with them thirty-seven years
ago. The letter from the Viscount spoke for itself and showed the utter
nonsense of sensational reports.
I also wrote to Marquis Ito about the war rumors as follows:
December 5, 1907.
MY DEAR MARQUIS:
Notwithstanding the frequent rumors that have of late sprung up,
both in this country and Europe, to the effect that the
long-existing friendly relations between Japan and America are
becoming strained, I think I am in a position to know that there
is not the slightest foundation therefor, so far as we are
concerned. There has been, however, a vicious motive in their
circulation, and it is quite dear to my mind that they have had
their origin in, and are disseminated by people in Russia and
Germany, the wish being father to the thought. For some reason
or other they seem particularly anxious that the pleasant
relations existing between our two countries should be weakened,
and finally severed, hence the strenuous efforts in that
direction. I feel quite sure, however, that there is not the
slightest possibility of such a contingency.
To show how false these rumors are, as well as to cement the
friendship which now exists between our countries (which you and
I know to be real and lasting) and to put an end to the jingo
talk of the press both here and in Japan, would it not be an
excellent idea for the Emperor to formally invite the Admiral
and Commanders of our fleet, which is to cruise in the Pacific
waters, to meet him at some convenient seaport in your country?
I know that the American people would appreciate such an honor
and that the greeting they would receive from your countrymen
would banish all thought of a disruption of our pleasant
relations. The Yankees of the West respect and admire the
Yankees of the East, and every effort should be made to increase
the harmony which now prevails.
Hoping, my dear Prince, that you are enjoying good health and
happiness, I remain
Faithfully yours,
HENRY CLEWS.
MARQUIS ITO, TOKYO, JAPAN.
* * * * *
FLEET TO VISIT JAPAN.
INVITATION ACCEPTED.
NEW PROOF OF FRIENDSHIP BETWEEN THE TWO NATIONS.
_Official Statement from Washington, March 20._
The American battleship fleet is to visit Japan. The desire of the
Emperor to play host to the “Big Sixteen” was expressed to Secretary
Root yesterday by Baron Takahira, the Japanese Ambassador. The
invitation, which was in the most cordial terms, was considered by
President Roosevelt and the Cabinet to-day. Secretary Root was directed
to accept the invitation, and the acceptance was communicated to Baron
Takahira this afternoon.
------------------------------------------------------------------------
CHAPTER LXXXVIII.
THE EMPEROR OF JAPAN.
* * * * *
DECORATES HENRY CLEWS WITH THE ORDER OF COMMANDEUR
OF THE MOST DISTINGUISHED ORDER OF
THE RISING SUN—ON THE INSIGNIA IN JAPANESE
LETTERS IS “KUN-KO-SEI-SHO”—WHICH
MEANS “EXALTED MARK OF MERITS
AND SERVICES.”
* * * * *
LETTER FROM VISCOUNT KANEKO.
_New York Tribune_, March 21, 1908.
TOKYO, March 23, 1908.
MY DEAR MR. CLEWS:
Please accept my heartiest congratulation on the new honor which
has been added to your already distinguished life by His
Imperial Majesty, the Emperor, who was pleased to confer upon
you the Imperial Decoration, in recognition of your valuable
service to this country. In due time, I know, Ambassador
Takahira in Washington will officially present it to you. I
hardly need say how gratefully I am appreciating your kind
friendship which enabled me to perform whatever was entrusted to
me, though to a very modest extent, during my sojourn in your
land in 1904-1905. And in this connection, I assure you that I
now look back, with much feeling, to those pleasant times I had
with you in America. I sincerely hope that our next meeting will
soon be in this country where your special interest in us is
already so greatly appreciated, as is shown in the recognition
which has been given you by the Emperor this time.
With my renewed assurance of the warmest regards to yourself,
and hoping that this will find you well, I remain,
Very sincerely yours,
(Signed) KENTARO KANEKO.
MR. HENRY CLEWS,
NEW YORK CITY.
COPY OF LETTER TO VISCOUNT KENTARO KANEKO.
April 25, 1908.
MY DEAR VISCOUNT:
I am in receipt of your most highly appreciated letter of March
23d, for which I cordially thank you; and I am daily expecting
to be honored by receiving the Imperial Decoration which you
state is to be conveyed by Ambassador Takahira. Upon its receipt
I will formally express my gratification to his Imperial
Majesty, the Emperor, for the great honor conferred.
If Japan were nearer to New York I might be able to promise that
our next meeting would be in your own country—the Land of the
Rising Sun—but as you have achieved so much good for Japan, in
the United States, I doubt not that business, or international
diplomacy, of which you are one of the masters, will bring you
here again, when, I assure you, you will be received with the
honor and respect which your distinguished services and your
high personal character entitle you to expect.
With assurances of the highest regard and friendship for you and
your countrymen, I have the honor to remain,
Very sincerely yours,
HENRY CLEWS.
VISCOUNT KENTARO KANEKO,
TOKYO, JAPAN.
CONSULATE GENERAL OF JAPAN.
60 WALL STREET, NEW YORK CITY,
April 27, 1908.
ESTEEMED SIR:
Referring to the official dispatch of even date, I take liberty
to ask you to appoint some afternoon in the near future which
will be convenient for you to receive me at your home or
elsewhere when I will have the honor and pleasure of carrying
out the important mission of presenting you with the
distinguished mark of honor. With kind regards,
Yours very respectfully,
(Signed) K. MIDZUNO.
MR. HENRY CLEWS,
630 FIFTH AVENUE, NEW YORK CITY.
I named Sunday, May 3d, at half-past one o’clock, at my residence, 630
Fifth Avenue, and invited a large number of friends to luncheon, which
made the occasion a most enthusiastic and enjoyable one.
The Honorable Kokichi Midzuno, said: Mr. Clews, acting under the
instructions of His Excellency Count Tadasu Hayashi, Minister of
Foreign Affairs, I have the honor to inform you that His
Imperial Majesty, the Tenno of Japan, my August Sovereign, as a
special token of Imperial good will, has graciously been pleased
to confer upon you the decoration of Commandeur of the most
distinguished order of the Rising Sun, and I have the honor to
present to you the said decoration. In performing this most
pleasant duty, I deem it my privilege to avail myself of this
occasion to tender my hearty congratulations and to convey to
you, Esteemed Sir, the assurance of my highest consideration.
Which was replied to by me as follows:
MR. MIDZUNO:
In receiving at your hands under the instructions of His
Excellency Count Tadasu Hayashi, Minister of Foreign Affairs for
the Empire of Japan, the decoration of Commandeur of the most
distinguished order of the Rising Sun, bestowed upon me by His
Imperial Majesty, the Emperor of Japan, as a special token of
his good will, I respectfully acknowledge my high appreciation
of the honor, and shall always value the distinction as one of
the greatest that could be conferred upon me. I shall ever
regard it not alone as a flattering compliment to myself, and a
recognition of such services as I have been able to render, but
as an emblem of the friendly relations that bind Japan and the
United States together in a bond of sympathy; and I trust that
this tie of friendship will never be weakened. I at least will
always endeavor to strengthen it.
I have long been intimately conversant with the affairs of
Japan, and been deeply and sympathetically interested in the
rapid and wonderful development of the Empire, and all the more
so in consequence of my good fortune in having had the personal
acquaintance, while they were in New York, of those two
distinguished Japanese Statesmen, who are now Prince Ito and
Viscount Kentaro Kaneko. Moreover, the correspondence that has
passed between us since their return to Japan has only quickened
my regard, and heightened my admiration for them and their
Country. Both have proved themselves great in peace as well as
war, and may the light of the Land of the Rising Sun never grow
dim, and America and Japan be joined by their mutual interests
in unbroken peace and concord forever.
With many thanks to His Imperial Majesty, the Emperor, for this
great honor, and to His Excellency Count Tadasu Hayashi, as well
as yourself, for your courtesy in the fulfilment of your duties,
and for the evidences of your personal friendship for me, which
touches me deeply, I assure you that my appreciation cannot be
expressed in words.
This symbol of the Rising Sun indicates the coming of the day of
greatness of your nation, and my fervent hope is that darkness
may be unknown in your land.
In the midst of our festivities to-day there is a cloud, and I
desire to express my deepest sympathy to the people of Japan in
the loss of so many young lives in the disaster which visited
them during the past week. Though dead, these young men still
live as an example to others that a life given to country in
time of peace deserves the same lasting glory as though given in
battle.
I then requested the ladies and gentlemen to fill their glasses and rise
and drink to the health of His Imperial Majesty, the Emperor of Japan.
The Consul General of Japan answered the toast as follows:
MR. CLEWS, LADIES AND GENTLEMEN:
As the local representative of Japan, I have the pleasure and
honor to thank you for the toast to His Imperial Majesty,
proposed by our esteemed Host and so heartily joined in by you
all. It is high honor as well as great pleasure that I was in a
position to personally present that high mark of honor to Mr.
Henry Clews. But what makes me most happy is that this came in
most opportune time, when the international horizon which was
said to be more or less clouded for some time has become
clear—so clear that even the yellowest journals of this country
which are sparing no efforts to stir up anti-Japanese feeling
among American people, can no more find any meteorological item
for a pessimistic weather forecast. Now that all transient and
incidental questions between your country and ours have been
settled in an amicable way, now that your government, on behalf
of your people, have gladly accepted our invitation to
participate in the Grand Exposition to be held in Japan in 1912,
and now that my fellow countrymen in Japan have most pleasant
anticipation to welcome the officers and men of your mighty
fleet of battleships in our beautiful ports, I hope and trust
that the most friendly relations between two nations, which have
existed and are happily existing, will be an everlasting one.
In conferring upon you, Mr. Clews, that high mark of honor which
I have just had the pleasure to present, His Majesty is
reflecting the friendly feeling and unfeigned affection that
fifty millions of His faithful subjects entertain toward the
people of this great Republic for their kind guidance and
unshaken sympathy shown to Japan and her people from the time
when your great Commodore knocked at the door of our Island
Empire to invite its secluded people to the comity of nations
down to the present day, not to speak of the most trying time
Japan passed through a few years ago, and their gratitude for
the most valuable service rendered by American people to effect
the termination of hostilities and restoration of peace through
the far-sighted, active, and able good offices of your great
President, whose toast I beg to propose.
My acknowledgment by letter of the honor conferred upon me:
May 2, 1908.
DEAR SIR:
Please convey to his Imperial Majesty, the Emperor of Japan, my
sincere thanks for bestowing upon me, as a token of his good
will, the Imperial decoration of Commandeur of the most
distinguished order of the Rising Sun. No words of mine can
fitly express my high appreciation of this honor, and I shall
always value the distinction as one of the greatest that it has
been my good fortune to achieve. I consider it a symbol of the
friendly relations existing between Japan and the United
States—a friendship which, I assure you, I shall endeavor to
foster and promote to the best of my ability.
With many thanks to his Imperial Majesty for the honor conferred
upon me, of which I am justly proud, and to your Excellency for
your kind offices in my behalf, I have the honor to remain,
Most sincerely yours,
(Signed) HENRY CLEWS.
HIS EXCELLENCY COUNT TADASU HAYASHI, MINISTER OF FOREIGN AFFAIRS
OF THE EMPIRE OF JAPAN.
The following letter from Prince, then Marquis, Ito is interesting as a
part of the world’s history, and shows the feeling and friendship of
that great statesman:
TOKYO, April 14, 1904.
DEAR SIR:
In answer to your letter of February 17th, let me first of all
thank you most sincerely for the constant sympathy you have
shown to our country’s cause. Your friendly efforts on the
occasion of the Chino-Japanese war are still fresh in my memory
and in the memory of all those who have heard of them. And, in
general, the sympathetic attitude of public opinion of your
country is a great encouragement to us in our faith that in
fighting for our own future security and undisturbed enjoyment
of the fruits of civilization, we are to a certain extent
fighting also for the common cause of all. Just as you say, the
supremacy of Russia in Corea would mean not only a constant
menace to the very existence of our island empire, but would
also mean the wholesale destruction of our commercial and
industrial interests already legitimately vested there in the
past, not to mention the loss of natural outlet for our
expanding people. The constant policy of Russia in this part of
the globe has steadily inclined toward monopolization of natural
resources of the country she conquers and annexes. Her
Manchurian policy is the irrefutable evidence of the above
statement. So that in fighting for our own interests we are at
the same time fighting for the principle of “fair competition
all around” in these new markets of the world. I am indeed very
sorry that the negotiations carried on on our side, with sincere
“bona-fide,” were not crowned with success so earnestly desired.
If the Russian Government were a little more inspired by the
spirit of moderation and of toleration for the legitimate
interests of others things would not have come to this pass. As
it was, there remained no other way for us but to try to enforce
by arms what we could not do by reason. And we had to do so ere
it would have become too late, for Russia was steadily and
rapidly augmenting her fighting forces available in this part of
her empire, so that before long the sheer mass of her fighting
power would have made it a folly for us to attempt to resist the
unscrupulous march onward. It has been nothing but a coolly
thought-out step in the cause of State necessity. And I am much
gratified to see that you as well as the general public opinion
of your country, have understood our motives in their true
light.
Hoping that you are enjoying as robust a health as when I saw
you last in New York, and also hoping to be able to see you
again in no distant future,
I remain, yours sincerely,
(Signed) MARQUIS H. ITO.
HENRY CLEWS, ESQ.,
New York City, U. S. A.
The following article, which I wrote at the time for one of our leading
magazines, contains matter which may be instructive to my readers:
May 24, 1904.
The success of the Japanese in the present war with Russia is
due to their great zeal. What they undertake to do, they
generally do with great earnestness of purpose, which calls
forth sacrifice, energy, courage, and determination. The
concentration of all these qualities is the basis of success in
all undertakings whether large or small. The success of the
Japanese is easily accounted for also by the fact that they love
their Emperor as a people—they are willing to fight for him and
to die for him, added to which, they are fatalists and are not
afraid to face death on the battle-field, because they firmly
believe that the next world is better than this, and therefore
to die in a good cause, especially in fighting for the salvation
of their country, secures a high and honorable position there.
Against these characteristics, which back the Japanese in the
present war, their antagonists, the Russians, fear their
Emperor, and under the autocratic rule of the nation soldiers
are very often put into the army through force and kept there.
There is a vast difference, therefore, on the battlefield, in
the fighting qualities of soldiers who are backed by love of
their Emperor and soldiers who are backed by fear of their
Emperor. Then again, the discipline of the Japanese soldiers is
of a more intelligent and up-to-date order than that of the
Russians. Each regiment in Japan is composed of 400 men with a
captain in command who carries a sword. Their training provides
that if anything should happen to the captain, and his sword
should fall to the ground, it must be taken up on the instant by
the next in rank, and if anything should happen to him, the next
in rotation takes his place, and so on all the way through to
the last man; and each man to the end of the 400 is capable of
picking up the sword and commanding with it, which also means to
continue the fight until the last man in each regiment is killed
or disabled; in other words, the fight is never to be given up
except by total extinction. As an evidence of the interest and
earnestness of the Japanese people, it is customary, amongst the
trades-people, whenever a family that they have been supplying
with the necessaries of life is deprived of the father of the
family, in consequence of his going to the war, to continue to
supply all their needs the same as before and without sending
any bill therefor. It is pretty difficult, therefore, for the
Russians, notwithstanding that they so largely outnumber the
Japanese, to whip such a determined, forceful people either on
land or sea.
There is scarcely an important college anywhere in the world in
which Japanese students are not to be found studying for all
vocations, and they are bent upon acquiring the best and most
up-to-date methods in all walks of life. Admiral Togo was
educated at Annapolis, and the American, English, and
Continental colleges have educated many of Japan’s best army and
navy officers now engaged in the war.
The Japanese are not given much to invention, but they possess
great discernment and discrimination; they know a good thing
when they see it, and are very skilful in imitation. Fifty years
ago, when Commodore Perry successfully negotiated for the
opening of the Japanese ports, that nation’s intercourse with
the outside world commenced. A few years thereafter a commission
was appointed to frame a constitution. This commission visited
all the great nations in pursuit of information. They
familiarized themselves with the American constitution and the
basis of the government of other nations; they culled the best
from all and put it into their constitution. It took them seven
years to accomplish it. When they made their report to the
Emperor he accepted it without any modifications whatsoever, and
notwithstanding the great changes that have taken place in that
country in consequence of its growth and development, there has
been no occasion up to this date to in any way change that
document.
They also appointed thirty-five years ago a commission, with the
present great statesman, Marquis of Ito, at its head, to visit
the various nations with a view of obtaining the best
information possible in order to establish a financial system.
On their trip around the world to study the various foreign
financial systems with a view of adopting one up to date for
Japan, they first came to this country and brought official
letters to General Grant, then President. General Grant turned
them over to me to teach them our financial system. I posted
them up thoroughly on our financial methods. They then went to
England, France, and Germany, and returned to Japan via the Suez
Canal. On their return, their report strongly favored the
adoption of the American system. It was accepted by the
Government, and their Secretary of the Treasury appointed me
their agent to get up the engraving of their new currency and
bonds, similar to those of the United States Government. I sent
the phraseology and denominations of all our different demand
notes and various bonds to them, and they transferred the same
into their own hieroglyphics and sent them to me. I had the same
beautifully steel engraved through the Continental Bank Note
Company, who were the lowest bidders, in competition for the
work. Since that time I have kept up a most interesting and
exceedingly friendly acquaintance and correspondence with
Marquis Ito, and his recent letter to me contained much of
interest, as it gave most excellent reasons for Japan being
involved in the present war, which he said was not from his
country’s desire, but through necessity, as a matter of defense.
------------------------------------------------------------------------
CHAPTER LXXXIX.
THE NATIONAL CORPORATION PROBLEM.[13]
Footnote 13:
An address by Henry Clews, LL.D., delivered at the First Annual
Banquet of the Economic Club of Manchester, New Hampshire, May 20,
1908.
_Mr. President and Members of the Economic Club_:
The political and popular clamor against the industrial Trusts, with
which we have been long familiar, was due primarily to the anti-monopoly
sentiment of the people, but in a far greater degree to the crushing of
competitors, through unlawful and unjust methods, by some of the
conspicuously large corporations, as Government prosecutions have shown.
Hence public hostility to the Trusts increased, and remedial legislation
was called for. The general feeling was that as a Trust had neither a
body to be kicked nor a soul to be damned it should be handled by the
law without gloves, and with the utmost rigor.
The exposure of the railway rebating evil by which competition had been
destroyed, and great monopolies built up resulting in colossal fortunes
for their principal owners, added fuel to the fire of this indignation;
and similar abuses and unlawful practices by certain Trusts showed how
strong combinations of capital had preyed upon, and killed off, weaker
ones, and individual traders, to an extent that made the injustice of it
a national scandal.
Owing to the inflamed state of the public mind, some of the laws enacted
to remedy the evils complained of may have been too drastic for the
purpose. But excesses of this kind correct themselves. Such laws are
either not enforced, or repealed after being enforced. As General Grant
once said to me,-“The surest way to repeal a bad law is to enforce it.”
We have fortunately always a safety valve in public opinion, which never
errs in the long run, and the public opinion of a nation is reflected in
its laws.
The immensity of corporate interests in the United States is suggested
by the fact that, including prominent city banks and Trust companies,
there are more than 20,000 corporations reported in the manuals devoted
to them. Of these 1,512 are active, operating railway companies, 1,129
electric traction companies, 1,158 gas, electric light and electric
power companies, 267 water companies, 259 telephone, telegraph and cable
companies, 1,510 active, operating and producing industrial and
miscellaneous companies, 880 active or operating mining companies, and
13,500 banking, insurance and other financial companies.
The railway companies cover 222,013 miles, and they had a capitalization
and bonded debt, on the 1st of January, 1908, of $13,908,456,846, at
par.
The industrial and miscellaneous companies had at the same date a
capitalization of $9,849,833,000, and the stocks of all the corporations
in the United States aggregated more than $33,600,000,000 at par,
exclusive of banks, Trust companies and other financial institutions.
In connection with the present enormous railway mileage of the country,
it is interesting to note that as recently as 1865 there were only 3,085
miles in operation; and in 1879—the year of specie resumption, after the
long civil war suspension from 1861—this total had only increased to
86,556 miles.
These figures remind us of the great rapidity with which new railway
corporations were subsequently organized, and laid their tracks, while
old ones extended their lines from Maine to California, and the St.
Lawrence to the Gulf of Mexico.
We can also remember the nation’s phenomenal progress simultaneously in
all other directions, and that, before 1880, Trust companies and
industrial corporations were few and far between in comparison with the
great multitude of those with which we have now to deal. The modern era
of these striking features of our business life, and the development of
the industrial Trusts which now cover the country, East, West, North and
South, had then hardly commenced.
Yet our great corporations, and our great railway systems are still
growing and multiplying, and will continue to grow and multiply to meet
the wants of our rapidly increasing population for generations to come,
till every part of our vast territory is thickly settled. Railways and
manufactories represent our largest corporations, and are next in
importance to our unlimited agricultural resources and mining interests.
They remind us too, that while these and all other corporations need
regulation by law, this regulation should never hamper, or interfere
with, their legitimate activities and expansion, however strict and
severe it may be in prohibiting and punishing wilful violations of law
and other abuses of power.
It is significant of the power and extent of our railway systems that
these—fifty-seven of them in all—operate, or control, six hundred and
eighty-eight subsidiaries, or jointly controlled railway companies,
embracing 196,425 miles of road, with an aggregate of outstanding stock
of $4,750,325,000, and $8,180,780,000 of bonds, a total for both, at
par, of $12,931,154,000. These figures are exclusive of stocks and bonds
held in the treasuries of the companies.
Thus nearly ninety per cent of the steam railway mileage of the United
States is operated, or controlled, by the fifty-seven systems. The
remaining ten per cent of the country’s railway mileage is composed
mainly of short, independent and disconnected lines, some of which are
run at a loss, and many without reporting any considerable profit.
Railway corporations in this country are therefore, except as to this
unimportant ten per cent, a great consolidated force, for the
fifty-seven systems that control ninety per cent of the mileage, are
equivalent to so many Trusts, and these can join hands in a solid
phalanx at any time for any lawful purpose, and practically form one
great railway Trust spanning the continent, a gigantic power that but
for law would be a monopoly.
So the National corporation problem is largely one of the railways, and
it involves the best way for the Federal Government to regulate these,
and all the corporations, in the interest of trade, commerce and the
people, and to do this without imposing unnecessary restrictions upon
their legitimate operations and development.
The corporation problem in this country is still new and unsolved, but
it has assumed immense national importance through the growth of the
large industrial Trusts during the last twenty years. Before that they
were unknown, and they have to a large extent revolutionized business
and business methods in the United States.
They resulted from the enormous and rapid increase of our population,
industrial activity, industrial development and wealth, and the
consequent increase of competition in all branches of trade.
Corporations, good, bad and indifferent, sprang up like mushrooms, and
then combinations of corporations into larger ones took place, and we
had Trusts.
These were organized ostensibly to secure economies in management which,
in conjunction with their large capital, would enable them to compete
advantageously with smaller concerns in the same lines of business, and
give them more or less control of their markets.
But in doing this they of course threw many out of employment, and
forced many of their smaller competitors out of business. Consequently
the popular sentiment against them at first was very strong and the cry
of “Monopoly” was often heard.
It was found however that the rise in prices that had been generally
apprehended as a result of the formation of Trusts did not occur, at
least not to any disturbing extent. So public hostility to them quieted
down, although their struggling and ruined competitors still felt sore
over their rivals’ success, all the more so when it was discovered that
most of them were making far larger profits than had ever before been
made in the same industries. If this had always been done honestly there
would have been no reason to complain.
The great industries dominated by Trusts included, besides petroleum and
sugar refining, iron and steel working, copper and other metal and
mineral mining, India rubber and tobacco manufacturing, distilling, and
also many miscellaneous manufactures, in addition to those in other
lines than manufacturing. The traders who had occupied these fields of
industry before them looked small indeed beside these new corporation
giants.
Discrimination in favor of one and against another by railway
corporations was an iniquity that built up large fortunes for a few and
starved and ruined many. But that, let us hope, has been effectually
stopped forever by its exposure and denunciation by President Roosevelt
and the Federal legislation which it provoked; and any revival of it
should be punished with the utmost rigor of the law, not by fines but by
imprisonment of both the giver and receiver of rebates.
Fines can be easily paid by large corporations, however much their
stockholders may suffer, but being placed behind iron bars is always
distasteful, if not terrible, to their officers; and it leaves a stigma
that they are anxious to avoid.
Their aversion to being disgraced in the eyes of their families and
friends by imprisonment as criminals will always tend to make them
extremely cautious not to incur this risk, however willing through lack
of moral scruples, some of them might be to violate the anti-rebate laws
if they could do so with impunity, and however much they might be aware
that lawlessness, apart from the question of dishonesty, is anarchy, and
therefore unpatriotic.
Corporation looting in its various forms, and political contributions of
corporation money, are, like rebating, equally wrong in principle, and
should be punished with equal severity and involve compulsory
restitution. That is really the only way to prevent the recurrence of
such wrongs by the unprincipled.
Judge Anderson, in charging the jury at the trial of John R. Walsh in
Chicago for bank frauds, said: “The law presumes that every man
understands and foresees the natural, legitimate and inevitable
consequences of his acts. The color of the act determines the complexion
of the intent. The intent to injure or defraud may be presumed when the
unlawful act which results in loss or injury is proved to have been
knowingly committed.”
Many of the irregularities, abuses and questionable methods of large
corporations resulted no doubt from the haphazard speculative manner in
which they were organized. Their promoters and organizers had always, or
nearly always, speculative objects in view in forming the combinations
we call Trusts. They looked for their first profit in the stock deals
involved in them, and were generally willing to give extravagant prices,
payable in stock, for properties that they wished to control and bring
into these new Trusts.
This, of course, caused overcapitalization, and in many cases this
overcapitalization was equivalent to several times the actual value of
the properties embraced in the Trusts created, and in some instances to
many times their value. Then too extravagantly high salaries were given
to the men in control of such organizations for their services as
officers. They were generally “on the make,” working for Number One—that
is for themselves—as well as the Trusts.
It often followed that, in their efforts to float their stock and pay
dividends, loose and none too scrupulous practices were resorted to, and
more or less false and exaggerated representations were made as to
actual values and conditions. So greed and graft dominated not a few of
them more than the interests of their outside stockholders.
They were in a position where they could help themselves to the cream,
and leave the skim milk for the investors, and not many of them
neglected their opportunity to skim the cream, and to feather their
nests more or less, in the last few years, before stricter laws were
passed by Congress and the States for the management of corporations.
The laxity of both the State and Federal laws with regard to
corporations, till recently, permitted much to be done in the dark,
which is now rendered impossible by the light of publicity that is
required by the new enactments, as well as by various prohibitions of
dishonest practices, besides that crowning evil, railway rebating, that
were before prevalent.
Campaign contributions by corporations were wrong, morally and legally,
not because political contributions are wrong, but because they were a
wrongful and illegal use of corporate money. But the controlling
officers of many large corporations, particularly the New York City
Railways and large life insurance companies, were woefully blind to
this, so accustomed had they been to handling corporate funds in their
charge as if they owned them, and could do as they pleased.
These transactions were almost on a par with some of those connected
with the purchase at a fictitious price of a certain Street Railway—a
practically non-existent line—in which large capitalists were concerned.
Here was a flagrant instance—involving a diversion of half a million
dollars—of the doings of men controlling a great street railway system,
at the expense of the stockholders whom it was their duty to faithfully
serve and protect.
That many dishonest acts by men controlling corporations have gone
unpunished is greatly to be regretted, and looks very much like a
miscarriage of justice. But let us believe that dishonesty was
exceptional and honesty the rule in corporate management.
Where punishment is inflicted for infractions of the law involving
larceny, it should be the same as for giving or receiving railway
rebates. Fines have no terrors for wealthy evildoers who violate the law
for their own sinister ends at the expense of others.
The popular hostility to the Trusts however, was often too
indiscriminate. It made little or no distinction between the good and
the bad. The Trusts were, as enlarged corporations with large capital, a
national trade development of our time.
Aiming at greater production, economy and efficiency, through their
large means and modern improvements, than had been possible with small
concerns, they marked a forward step in that progressive industrial,
commercial and financial march which has created our vast national
wealth and made this country the Wonder of the World.
But of course it was inevitable that these Trusts, with their large
capital, and new and improved methods and machinery, should supersede to
a great extent the old order of things, and take away from them the
business of others that they competed with. It is only natural that the
stronger competitors should more or less dominate or destroy the weaker,
and the success of the Trusts was merely another illustration of the
survival of the fittest. This is a law of Nature which it is useless to
resist.
It is therefore not against the creation of Trusts, but against
injustice, lawlessness, misrepresentation, looting and other evil
practices in the management of Trusts that we have a good right to
complain, and against which the strong arm of the law should be always
raised. A well and honestly managed Trust can do business as
legitimately, and with as much or more, advantage to the public, as any
individual, any firm, or any small corporation can.
But there is constantly greater temptation to wrongdoing by those in
control of large corporations than is the case in small ones. We have
seen many instances of the abuse of power in these, not only in forcing
the allowance of rebates from the railways, but in other unjustifiable
ways calculated to get the upper hand of competitors, or kill them off
entirely, as well as in the misuse of corporate funds for speculative
purposes, to say nothing of appropriations through that too common form
of dishonesty called graft.
Men in high positions in corporations have often done in secret, in the
way of chicanery what they would have been both ashamed and afraid to do
openly. But now that the old practices have been exposed and the new
laws require publicity of accounts, and have closed the door to the many
opportunities for fraud and graft that were before open, through severe
penalties, we have a purer business atmosphere and a higher moral tone
in our business life. So some good has come out of our corporation
scandals, and public sentiment has been aroused against corporate
corruption and all abuses of power.
Corporations no less than individuals of course have rights which should
be scrupulously respected by both our Federal and State legislators. But
one defect in corporation legislation by Congress, as well as the
States, has often been that it failed to make a sufficient distinction
between what may be called private and public corporations. It stands to
reason that railway and industrial corporations, and all public utility
companies, that have sold their stocks and bonds to the public, and had
them admitted to dealings on the stock exchanges should have their
condition subjected to stated periodical examinations and publicity
which would be uncalled for in the case of smaller corporations that had
not marketed any of their securities, and whose earnings and affairs had
no interest for the general public.
The railway companies are now required by law to keep their books and
accounts in a certain prescribed form under the supervision of the
Interstate Commerce Commissioners, and this is the right kind of
publicity, for it permits of no cheating, nor of any neglect to comply
with the law. The record of each day’s business tells the story and
these books and accounts are all the time open to Government inspection.
But such regulations would be unreasonable if applied to the small
private industrial corporations.
Honestly managed and solvent corporations have nothing to fear from
publicity as to their financial condition, although they have a perfect
right to guard their trade secrets from publicity, provided they are
free from any dishonest or illegal taint. Well and honestly managed
public utility corporations are our best protection against municipal
ownership, which in this country would be sure to involve political
corruption, and probably poor service.
It would be a step towards socialism, and socialism in this country
would be antagonistic to our government, our institutions and our
national progress, and should be resolutely resisted and frowned upon by
all Americans. It is a weed transplanted from the hotbeds of European
despotism that can never flourish here, for our soil is entirely
unsuited to it.
Publicity at regular intervals of earnings and conditions by railway,
industrial and other corporations creates confidence where confidence is
merited, while exposing weakness where weakness exists. By eliminating
that which is unsound and dangerous, it benefits the sound and the safe,
and removes grounds of suspicion injurious to all.
Secrecy is the defense of the weak, and they naturally shirk the light;
but the public interests demand that all the large corporations submit
to it, and stand or fall according to their merits. This applies to
banking and insurance as well as manufacturing, trading and
transportation corporations, all, in this respect being in the same
class.
To facilitate this publicity and ensure simplicity and accuracy the
books and statistics of corporations should be kept in a clear and
systematic manner that any examiner could easily understand. I say this
because in some large corporation failures that have occurred much
irregularity and confusion of accounts was found.
This not only delayed the receivers in ascertaining the amount of the
assets and liabilities, but showed that the officers of the failed
concerns could not have been very closely conversant with their precise
condition when they suspended. Bad, or careless book keeping, accounting
and office management has led to many important corporation failures
that good work in that department might have averted.
Corporations should therefore, be careful to supervise their clerical
forces closely, and also employ accountants to make periodical
examinations and audits of their books, for accounting and statistics in
these days have been raised to the importance of a science.
Old fogyism, wherever it still exists, should be made to give place to
improved and time saving modern methods. These may be small matters to
dwell upon, but a close observance of them is necessary to good
corporate management in this age of close competition and aggressive
enterprise. All that is out of date, or needless, or a drag upon
progress, or which handicaps business development should be promptly
discarded.
The political influence of large corporations has so far not received as
much consideration as it deserves. But it is a factor in our State and
national business life that is more and more making itself felt in an
unobtrusive but none the less effective way.
We have seen this manifested in the strong and numerous protests,
emanating from this source, against the national government and the
interstate commerce commission consenting to the general rise of freight
rates conditionally agreed upon by the Eastern and other railways. In
making these protests to President Roosevelt the corporations are well
aware that he can control the action of the interstate commissioners in
the matter, and by a word cause them to either give or refuse permission
to raise railway rates. They know too that his keen political
observation and insight will cause him to weigh and consider with the
greatest care the effect of the administration’s course in consenting,
or refusing to consent, to this inconsistent proposal to raise railway
freight rates in such a period of trade depression as this, when more
than 413,000 cars are idle. In view of the Presidential Campaign, and
the issue to be decided at the polls next November, not merely by the
politicians, but by the people, he will not underrate the importance of
the railway corporation question as a political factor.
We saw that the President’s communication to the interstate
commissioners a short time ago directing an investigation by them in
relation to the need of the proposal of the Southern railways to reduce
wages, resulted in an immediate abandonment of their announced plan to
reduce them, and in fact all the railways were similarly influenced by
that act of his. He knew that the reduction in one section would be the
entering wedge for a general reduction, and perhaps a strike.
So the railways switched off the reduced wages line to the increased
freight line, thinking that the President, from what he had said, as he
surveyed the situation from his political observatory, would prefer the
alternative of higher freight rates to lower wages. Here comes the rub.
It is a two-edged political sword that President Roosevelt, above all
others, will see requires to be very cautiously handled.
Without great care in this difficulty the administration might find
itself between the upper and the nether millstone of a very ugly
question, and in active antagonism with either the large corporations
and the whole mercantile community, on the one hand, or the railways, on
the other, with both sides bringing all their political influence and
artillery into play.
Here would be an acrimonious contest that could not fail to affect
political results in November. The President would very naturally be
anxious to avert it, but how to reconcile the two opposite courses of
saying yea or nay to the railways, and secure harmony between them and
Labor, is a problem hard to solve.
In connection with the proposition agreed to by the officers of the
Eastern trunk railways to advance freight rates from ten to fourteen per
cent, it is well to consider that the gross earnings of all reporting
lines in February showed a decrease of twelve and one half per cent from
those of last year, and that in March the decrease was 14⅜ per cent, the
result of the prevailing industrial depression, particularly in the
iron, steel and coal trade and the New England cotton and woolen milling
industry.
The proposed increase would, of course, have to be added to the cost of
the commodities carried, and saddled upon the consumers. It was
therefore to be expected that a flood of indignant protests would come
from these, as well as from large shippers and the rank and file of the
mercantile community. They have urged the injustice of such an advance
in these hard times, and in the teeth of an average contraction of fully
twenty-five per cent in the demand for goods. But the railways in reply
point to the refusal of the U. S. Steel Corporation and other large
trade combinations to lower their prices for railway materials, as well
as to the political and other work of the Labor Unions, at Washington
and elsewhere, in support of their determination to keep wages up to the
highest figures of prosperous times, refusing meanwhile to listen to any
terms of wage readjustment to the situation as it is. These are
extenuating circumstances, but two wrongs do not make a right; and the
best way of adjusting these differences is a difficult corporation and
labor problem of itself.
It may surprise some to learn that the great power concentrated in the
President’s hands by Congress has made the great corporations, including
the railway companies and banking institutions, ambitious and eager to
control the Federal Government itself, and they are resolutely working
to control it as far as they can by the force of capital, but as
unobtrusively as possible. They know that their designs to make the
money power supreme would arouse popular indignation, so they are
engaged in a still hunt, and Samuel J. Tilden used to say that this is
what wins in politics and a political campaign.
The Government control of the Trusts, the railways and other
corporations has become so great that it is hardly to be wondered at
that the great object that they have now in view should be to control
the government’s policy, and already they are _sub rosa_ powerful
political machines. In this connection it is significant that some large
railway and banking interests have identified themselves with the
Presidential movement. Every fresh extension by Congress of the
President’s power over corporate interests has made the large
corporations—industrial, railway and financial—with their enormous
capital and resources, more and more bold and determined in their
efforts to control the Presidency, if indeed that is possible; and this
motive underlies a great and growing amount of corruption in our
National politics.
We can therefore see in the attitude and views of the great
corporations, with their wealth and political influence, a possible
menace to our Republic and its free institutions.
This is a matter of vast and vital concern to our citizens, and it is
high time that their serious attention should be called to the fact that
the powers with which the President is invested over the business of all
classes of corporations have become so extended and far reaching that
the Trusts and their railway and financial allies, are ready to
sacrifice any moral principle, and pay any price within their power, to
control the policy of the Federal Government.
So the greatest of all the National corporation problems we have now to
deal with is how to curb and regulate, without injustice, the increasing
political power and pernicious political activity of these and other
corporations, and prevent them from accomplishing their great object,
Government control, for this indeed would be a National calamity.
To President Roosevelt we are almost entirely indebted for the
development we have witnessed in the National control of corporations
under the authority of that provision of the Constitution which invests
Congress with the power to regulate commerce between the States. This
was a great task well performed, and only second to it in importance has
been his activity in promoting Congressional legislation for the
investigation, conservation and increase of the country’s National
resources, including the irrigation of arid regions, the establishment
in the public domain of forest reserves, which had been too long
neglected, and the extension and increased efficiency of the geological
survey.
Closely allied to those National interests and the Federal management
and control of corporations has been the President’s direction of the
work of the Department of Commerce and Labor, the act creating which
provides that it shall be its duty “to foster, promote and develop the
foreign and domestic commerce, the mining, manufacturing and fishing
industries, the labor interests and the transportation interests of the
United States.”
As all the business of the country outside of banking and finance, is
practically covered by this Department, its importance can hardly be
overestimated, especially in relation to the great corporations; and it
is in co-operation between these and the commercial organizations of the
United States, in common with all the other designated business
interests of the country, and this branch of the Federal Government,
that harmony and good corporate management can be best promoted, and the
political power and aspirations of the Trusts, the railways and the
other corporations be effectually regulated and permanently curbed. To
this result that Department’s energies should steadily tend, for the
political domination of this country by Trusts and the money power would
be an intolerable evil, however much it might be hidden and disguised.
It would be inimical to our form of government, and the spirit of all
American institutions, and to ward off this threatened danger, by
nipping it in the bud, is a public duty that the government owes to the
people.
It is indeed likely to become our great National corporation problem;
all the other problems relating to the Trusts, the banks and the
railways being subordinate to this in importance, for it aims at
political power for Capital, which would undermine the very foundations
of our great and glorious republic—the government for which the patriots
of the American Revolution fought so bravely at Bunker Hill, and then,
crowned with victory, made 1776 glorious with the Declaration of
Independence.
But forewarned, forearmed, and public opinion the great court of appeal,
will always govern and keep the Trusts as well as all our other great
business interests in line for the advancement of our National welfare
and the prosperity of the people.
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CHAPTER XC.
WHY I AM AN AMERICAN.
I came to this country from England over fifty years ago, expecting to
stay for merely a short visit. I had barely learned the localities of
the public buildings and the principal streets, when I began to perceive
the possibilities that presented themselves to a young man, who had the
courage to push, to compete for a place in the race for wealth and
position. I liked the hustle and the bustle that contrasted so vividly
with the slow and easy style which prevailed in my native country. I
could not escape being drawn into the spirit which surrounded me, and I
made up my mind that I would make my stand in life in New York, and I
sought and found employment. Fortunately I had letters of introduction
to people of culture and refinement, so my social surroundings were both
attractive and beneficial. In a few years the Civil War broke out and
the leaven was thereby added to the liking I had for the flag which
floats for freedom, and I became a more ardent American than though this
had been my native soil. I had the good fortune to meet the great men of
those days and they whetted my appetite to rise to their level, and much
of my success is due to the quiet influence they exerted upon my young
mind. When I landed in New York, most o what is now the great West, was
boundless prairie or dense forest, but even then the indomitable spirit
of people around me yearned to subdue this wilderness and make it
blossom and bear fruit. Millionaires were few in those days and
truthfulness and honesty, combined with a willingness to work, were the
necessary requisites to enable a young fellow to succeed. The fact that
this was a government for the people, and by the people, did much to
determine me that here I had found the promised land. No aristocracy to
contend with but the aristocracy of brains and courage; no traditions of
centuries to hang between you and your right to toe the scratch with any
man. The country was growing beyond its population and immigration was
invited in such an attractive way that the desirable classes from all
over Europe were drawn to our shores. The fact that men born in humble
life had become some of the world’s leaders proved the possibilities
that might come to any one who cared to try and who had the courage not
to know when he was beaten. In this country Congress has always made,
and is still making, laws that benefit all kinds and conditions of men
who behave themselves. Before the law neither blue blood nor family tree
protects any man who violates the statutes, for all are free and equal.
This nation has never fought for conquest of territory and wherever our
flag floats it has a moral and undisputed right to do so.
The foregoing is but a summary of the volumes I might add to the reasons
why I am an American. One more is that I cannot help being an American
and I don’t want to.
HENRY CLEWS.
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CONCLUSION.
In conclusion I wish to ask public indulgence on account of omissions.
There are many brilliant financiers and skillful operators of the
younger generation in Wall Street who have thus far shown that they are
probably destined to a prosperous, and in some instances, an illustrious
career.
Again, there are others of various ages and long experience, whose
achievements have been of a quiet, unostentatious character and whose
business lives and operations have been conducted with great reserve,
yet with marked success.
Although these two classes have not yet done much to make their
existence conspicuous in the public eye, while some of them, through
excess of modesty, perhaps, have even shunned publicity, yet their lives
have been replete with noteworthy events and the acquisition of very
useful knowledge which, if preserved and recorded, would be highly
interesting in the present, and probably not unworthy of being
transmitted to the future.
I have a considerable number of these clever and worthy gentlemen in
“the volume of my brain,” for whom I have no space in this book, as it
has already exceeded the dimensions which I had originally designed, but
in an additional volume I intend that they shall be duly remembered
according to the best of my humble ability and my opportunities of
forming a just estimate of their deserts.
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● Transcriber’s Notes:
○ The page number of final chapter ("CONCLUSION") was added to the
Table of Contents.
○ A few illustrations were moved to be closer to the appropriate
text.
○ Missing or obscured punctuation was silently corrected.
○ Typographical errors were silently corrected.
○ Inconsistent spelling and hyphenation were made consistent only
when a predominant form was found in this book.
○ Text that:
was in italics is enclosed by underscores (_italics_);
was in bold by is enclosed by “equal” signs (=bold=).