336 



THE IKEIGATION AGE. 



BUSINESS DISREGARDS POLITICS 



By C. C. Bowsfield. 



Two of the most turbulent political conventions ever 

 witnessed, with an aftermath of controversy and un- 

 certainty, have failed to disturb business. Such a dis- 

 ruption of affairs as occurred in the national party gather- 

 ings would have been sufficient a dozen years ago to shake 

 the country to its foundations. A steady improvement in 

 trade during- the last two weeks shows how completely 

 financial interests are disregarding politics. 



Whether it is a mistake or not, this nation is com- 

 mitted to a material reduction of the tariff, and business 

 men who are directly concerned with imports and chang- 

 ing schedules have discounted the possible effects of a 

 general revision. But while we may feel sure that a re- 

 duction of duties is coming, the country is still a long 

 way from free trade. Even Democratic success in No- 

 vember would not insure a removal of the entire pro- 

 tective tariff. Changes will be made along conservative 

 lines, no matter what the platforms demand and the cam- 

 paign orators promise. 



Therefore a feeling of confidence has been main- 

 tained in business circles despite the political agitation 

 and unrest. At the same time a cautious spirit is mani- 

 fest, which reflects increased sagacity and wisdom on the 

 part of investors. There is ample evidence of under- 

 lying soundness in trade conditions, and this is kept in 

 mind by financial houses in the face of extraordinary 

 political excitement. 



ging of a legitimate business merely because it has 

 dominating size and strength is unjust, and that the best 

 interests of the public will be conserved by encourag- 

 ing rather than hampering big industrial enterprises. 

 There is a plain change of sentiment in this regard, so 

 that demagogues and ultra-radical politicians are having 

 less opportunity than formerly to cause mischief. 



One of the most significant facts is that trade is ex- 

 panding steadily if not rapidly in the hands of people 

 who have become conservative through recent experience. 

 All investments are being more sharply scrutinized than 

 ever before, and this serves to curtail speculation in un- 

 improved land as well as in all property of uncertain 

 merit. Such a feeling and such a condition make for 

 commercial stability. 



The calmness which prevails among business men 

 as the national campaign develops intensity of feeling 

 will receive various explanations. It is reasonable to 

 assume that alterations in the tariff schedules which may 

 be looked for at the hands of which ever party has the 

 responsibility of government in the immediate future will 

 have comparatively little effect on business. This is ac- 

 counted for in part by the fact that manufacturers and 

 importers of merchandise have been operating close to 

 bed-rock in the last two or three years and have no ex- 

 tensive accumulations of goods which might be seriously 

 affected by changes in duties. There is a partial ex- 

 planation also in the fact that the cost in Europe of pro- 

 ducing all commodities is a little higher than it has been 

 and is somewhat nearer the American level than in the 

 past. By reason of improved facilities of manufacture 

 and easy money in this country, with unusual firmness 

 of interest rates abroad, many lines of our own mer- 

 chandise can be placed on the domestic market at lower 

 prices than were current a few years ago. 



In addition to this reasoning it is evident that the 

 United States as a nation is becoming less and less de- 

 pendent on the old world for such goods as the great 

 mass of our people consume. The time has arrived, seem- 

 ingly, when to a very great extent business men can be 

 indifferent as to possible tariff changes. Many of them 

 are disposed to accept as unavoidable certain reductions 

 which both of the leading political parties favor and 

 which it is thought can be adopted without injuring labor 

 or disturbing mercantile and manufacturing interests. 



There is a still more definite explanation of this 

 complacency with which financial concerns regard the 

 political situation. They firmly believe that the radical 

 element is not going to work as much mischief in the 

 future as it has in the past. The co-ordinate branches of 

 the law-making bodies are acting as a check on each 

 other, while the higher courts of the land are in a broad 

 measure standing as a safeguard against unfair prosecu- 

 tion of corporate interests. There is a growing sentiment 

 in this country that capital has its rights; that the nag- 



It has come to a time when thinking men who hope 

 for constructive legislation are more afraid that Con- 

 gress will not act at all than that it will act unwisely. 

 Action is imperatively demanded by the business element 

 for an improvement of the currency situation. The Mone- 

 tary Commission's plan for establishing a national reserve 

 association remains in status quo, while Congress pur- 

 sues investigations which are poorly founded and very 

 unpromising, to say the least. There has been ample 

 time for definite action since the currency measure was 

 introduced and the country at large would heartily sus- 

 tain Congress in the passage of this or a similar bill de- 

 signed to provide the nation with an adequate currency 

 system. 



Observing persons are impressed with the strength 

 of sentiment in this direction. The monetary campaign 

 has lasted much longer than a presidential contest lasts, 

 and the educational effect has been far-reaching and 

 beneficial. Business men of the interior, farmers, manu- 

 facturers, shippers, and small investors on the frontier 

 and in new states are among the most earnest and in- 

 telligent advocates of an elastic currency. These classes 

 have suffered long and patiently from monetary ills. 

 They realize the great fundamental truths of the present 

 financial propaganda, that there is not money enough 

 in this country for crop moving and development work 

 in times of prosperity and expansion, while there is too 

 much in periods of dullness. An elastic currency is the 

 crying demand of the age, so that there will be suf- 

 ficient money in the busier months and not too much 

 during the rest of the year. Bankers and all owners of 

 capital carry a heavy and unjust burden when the financial 

 market is dull and funds accumulate in an excessive way. 

 On the other hand, merchants, shippers, builders, farmers 

 and others are handicapped at times by a scarcity of 

 cash even when they have ample security to offer for 

 their loans. 



A Central Reserve Association, according to the 

 mature judgment of a majority of the American people, 

 would afford proper facilities for correcting the defects 

 which have been pointed out. If operated according to 

 the plan brought forward by the Monetary Commission, 

 this Reserve Association would be under federal control, 

 would share its profits with the government and %vould 

 at all times be in an absolutely safe condition because 

 it would not issue currency except on securities of un- 

 questionable character. 



Money rates are now advancing, the gain amounting 

 to one-half per cent or more since the first of this 

 month. The improvement is due to a general broadening 

 of trade and a large prospective demand in connection 

 with crop moving. It is a welcome change for financial 

 houses, for the fairly active commercial business all sum- 

 mer has not been sufficient to give full employment to 

 bank funds. There still is considerable available capital 

 for investment in the better grade of bonds and com- 

 mercial paper. This class of buying has been kept up 

 in large volume by the banks and their customers, al- 

 though there is keen discrimination in the matter. Tak- 

 ing this branch of business in the aggregate it is afford- 

 ing an outlet for a great deal of capital, in eastern as 

 well as western markets. The unusually free' borrowing 

 of money in London and Berlin, as well as in the Orient, 

 continues a helpful factor in steadying rates here. The 

 Chicago market is also receiving the customary support 

 from local real estate enterprises, which continue to use 

 capital at fair rates. , 



The advance in real estate values in Chicago and 

 throughout the West is notable. The rapid growth of the 

 city accounts for this situation. Inside business property 

 is paying well, and high-class residences almost equally 

 so. A somewhat rapid advance in farm values is noted. 

 This undoubtedly reflects an improved condition generally 

 in the agricultural districts. All kinds of produce hold 

 (Concluded on page 348.) 



