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JANUARY 10, 1908
The Commoner.
3
SECRETARY TAFT OPENS CAMPAIGN
Secretary Taft delivered what his friends
called the opening speech of his campaign at
Boston on the evening of December 30. Because '
of the jjrominence of Mr. Taft in the contest
for the republican nomination, The Commoner
prints in full the Associated Press report of the
Taft meeting. That report follows:
Greeted with cheers as "the next president
of the United States," a topic which he carefully
avoided in his own remarks, however, Secretary
of War William H. Taft delivered his first public
speech since his world circling tour tonight at
the annual banquet of the Boston Merchants'
association at the Hotel Somerset. The ban
quet closed a long and strenuous day for the
secretary of war, during which he delivered a
brief address before four hundred ministers in
the morning and attended a reception and spoke
before a large gathering of Jews of the city at
the Elysium club in the afternoon. During his
visit to Boston, which ends tomorrow afternoon
Secretary Taft is the guest of Samuel Carr, a
Boston banker and relative of Mrs. Taft.
, A ,more notable gathering of prominent
and representative business men has seldom
been seen in Boston than that which greeted
the secretary tonight.
In the banquet hall beautiful decorations
adorned the tables, which provided for the seat
ing of over five hundred guests, while behind
the speaker's table were a great many American
flags. President Jerome Jones, of the Boston
Merchants' association, presided. Seated on
either side of him were the speakers and guests
of honor, who included Secretary of War William
H. Taft, Congressman Shereley of Kentucky,
Lieutenant Governor Bben S. Draper of Massa
chusetts, Mayor John F. Fitzgerald and Rt. Rev.
William Lawrence, bishop of Massachusetts.
In introducing Secretary Taft, President
Jones said:
"We are favored this evening by the pres
ence of a man from the middle west who has
impressed us all with his fitness for the most
important position that the great and powerful
nation can bestow, and, in brief, an official of
great . strength and wisdom. He has recently
put a girdle around the earth as an ambassador
of peace and good will, visiting the great rulers
of mighty nations, and we want to hear him talk
to us."
As the secretary arose to reply all the
guests stood up with him and filled the air with
long continued cheers.
Calls for "three cheers for Secretary Taft,
the next president of the United States," were
heartily acclaimed.
THE SECRETARY'S SPEECH
, Secretary Taft then delivered the following
speech, which he read from manuscript through
out, making no additions or comment relative
to his own candidacy for the presidency or other
topic:
"Gentlemen of the Merchants' and Manufac
turers Association of Boston: I am glad to be
here. For more than two years I have been try
ing to accept your kind invitation. I do not
feel strange in this New England company. My
father was born in Vermont, my mother was
born in Boston; my two grandfathers were born
in Mendon, Worcester county; much ofmy boy
hood was spent in Millbury and I was 'educated
at Yale. While I can not claim to be one of
you, I like to boast th,at I have enjoyed the good
influence and the same traditions,
"I had expected to talk to you about the
Philippines tonight. That was one of the, rea
sons why I Accepted the invitation so lightly, it
is a subject easy for me to talk about. It may
be it is getting a little stale. For instance, I
have found that one of the begt methods of dis
couraging my friends, the correspondents of the
press, in Washington from pursuing embarras
sing inquiries into other" matters is to Insist on
discussing with them for publication interesting
phases of .the Philippine situation. They leave
forthwith. But I had supposed that however,
dead the islands may be as a topic inviting dis
cussion and attracting attention elsewhere, one
could rouse some sentiment over it In Boston.
have been warned, however, that here, too,
there were subjects more absorbing, at least for
business men. So, when I was honored by an
invitation for this morning to address the minis
ters of Boston, whose profession carries them
naturally in a consideration of other worlds, I
said my say in respect to the Philippines, and
the, to me, very absorbing national problem
which I hope and bolievo we are working out
successfully. It follows that for this company,
I must find another subject.
THE MONETARY PANIC
"During the last throe months the country
has suffered from a severe monetary panic.
Even yet, tho clearing house certificates linger
In your bank exchanges as emphatic evidence of
its severity and of tho extreme measures which'
had to bo taken to avoid greater disaster.
Doubtless many of my hearers have not yet re
covered from tho Intonso nervous strain and
mental suffering to which they have been sub
jected since tho middle of October. Tho panic
has been given a certain political bearing and
importance. For this reason, I have selected for
my topic of tonight 'Tho Panic of 1907, Its
Causes, Its Probable Effects and (ho Relation
to It of tho Policies of tho National Administration.'-
"What did cause tho panic? Writers on
financial subjects who have given their lives
and constant attention to matters of this kind,
who are able to constitute a comparison of tho
present panic with previous panics, and who
are entirely familiar with the conditions preced
ing all of them substantially agree upon tho
cause. Panics and Industrial depressions are tho
result of tho characteristics of human nature,
which manifest themselves in business and oIko
where. Tho world generally has a certain
amount of loanable capital available for new en
terprises or the enlargement of old ones. In
periods of prosperity, this capital with tho In
strumentalities for enlarging it potentially by
credits Is put into now enterprises, which are
profitable and tho increase in free capital goes
on almost in arithmetical progression. After a
time, however, expenses of operation and waees
Increase and the profit from tho now enterprise
grows smaller. The loanable capital gradually
changes Its form Into investments less and less
convertible. Much of that which might be capi
tal Is wasted in unwise enterprises, in extrava
gant living, In wars and absolute destruction
of property, until the available free capital he
comes well nigh exhausted tho world over and
tho progress of new enterprises must await tho
savings of more. Men continue to embark In
new enterprises, however, the capital fails them
and disaster comes.
SOME WASTE OF CAPITAL
For eight or nine months last past, there
were manv indications that the loanable capital
of the world was near exhaustion. This result
was brought about not only by the enormous ex
pansion of business plants and business Invest
ments which could be readily converted, but also
by the waste of capital in extravagance of living
and by tho Spanish war, the Boer war and tho
Russian-Japanese war and In such catastrophes
as Baltimore and San Francisco. It became im
possible for the soundest railroads and other
enterprises to borrow money for new construc
tion or reconstruction.
"The condition was not conflred to this
country, but extended the world over, and was
made manifest In the countries of Europe even
before It was felt here. Secondly, the conclusion
can not be avoided that the revelations of Irreg
ularity, breaches of trust, stock jobbing, over
Issues of stock, violations of law and lack of
rigid state or national supervision in the man
agement of some of our largest insurance com
panies, railroad companies, traction companies
and financial corporations, shocked Investors and
made them withhold what little loanable capital
remained available. Such disclosures had much
more effect, probably, abroad, than they had
here, because here we are able to make distinc
tions while there at a remote distance, the revel
ations created distrust in our whole business
fabric.
"When therefore two or three institutions,
banks and trust companies, supposed to be solid,
found their capital Impaired by stock jobbing
of their officers, the public was easily frightened
and the run upon banks began. The question
then became not one of loanable capital, but of
actual money to be used in the transactions of
the day, a very different question, though, of
course, closely related.
SYSTEM OF CURRENCY FAULTY
"It would seem that our syBtem of currency
is not arranged so as to permit its volume to
bo Increased temporarily to counteract the sud
den drain of money by the hoarding In a panic.
It Is probable that tho stringency which ronchod
ta height on that dark day of October 21 might,
in part, havo boon allovlatod, had wo had a
currency which could automatically onlarge Itself
to meet the tremendous demand of a day or a
week or a month whllo public confidence was
being restored. The national administration,
together with many of tho large capitals of
. ?rk. nncI 0,oworo, put their shoulders
under tho lead and by various devices of an un
usun, character havo brought about tho presont
condition of gradually Increasing confidence
I ho Injurious consuquonce to follow from
this panic are not Iikoly to bo so long drawn
out or to result In guch disastrous Industrial de-
Voo ,on ft8 lho mn,c of I893 or tho panic of
J 873, and this for tho reason that tho condition
of tho country makes It so much easier to re
sumo business gradually to accumulate capital
and then to renew tho enterprises which had to
ho abandoned for lack of It.
In the first placo wo havo a Bolid curroncy,
with no suggestion of & departuro from tho gold
standard. In 1893 tho pressure for froo silver
was on, and tho throat of national repudiation
had much to do with tho dolay in the return to
tho prosperous times. Our government finance
now aro In excellent condition and havo a largo
surplus. Our farming communities in tho west
today aro not under tho weight of mortgages
and of debt which distressed them in 1893 and
in 1873. They aro prosperous and woalthy.
"Again tho railroads, which make up a
largo part of tho wealth of this country aro on a
much solldor foundation than thoy woro in-1893.
Thon many of them had to bo taken Into hands
of recolvors and Immenso amount expended by
means of receivers' certificates displacing and
destroying tho valuo of vosted securities in order
to put roads in a safe and Income-earning condi
tion. The railroads today aro in a better physi
cal condition than they havo over boon In their
history. But few of them havo recently been
built Into now territory, In which business liar
to be created by Introducing a new population.
BALANCE OF THANK WITH US
"Again, tho balance of trade is with us.
Wo were about to settle for tho hundred millions
of gold that wo withdrew from Europo In order
to meet the demand for money In tho markets
In Now York, by tho excess of our exports over
our imports in the single month of October. All
these things point to tho probability of a restora
tion of confidence and after a proper liquidation
and an Industrial depression of some months, to
a resumption of business on a normal hauls.
"Modern business Is conducted on a system
of credit, which In normal times incroanes tho
facility with which tho work of manufacture,
production and sale can bo carried on a thou
sandfold beyond the limit of earlier days and
enables a total of many billions to root on a very
small percentage of actual money passed. Every
manufacturer, every merchant, Is under modern
conditions, dependent on the successful conduct
of his business upon bank credits extended at
regular seasons. These banks themselves In turn
acquire the means of granting those credit
largely from the money of their depositors. And
In loaning their deposits, the banks rely
upon the Improbability that more than a cortaln
part of the deposits will be called for at any
one time. A lack of public confidence in tho
banks created a common desire among deposi
tors to withdraw their money. The fright which
seizes the creditor the depositor and leads
him to hoard his money, spreads like wildfiro
and is as unreasoning and unreasonable as tho
spirit of a mob. A run on the bank ensues. Tho
banks then call on their debtors and the tre
mendous structure depending on credit tumbles.
Meantime men who properly count themselves
as millionaires, who are honest, conservative,
solid business men, always responding to their
obligations, find themselves as helpless under
such a financial cataclysm as they would bo ip
an earthquake.
ALWAYS LEAVES ITS MARK
"Gradually reason resumes its sway but
the injury to credit and the blow which has
beeriStruck at the normal business progress has
more or less permanence. Values have shrunk,
plans for new and Increased business enterprises
must be abandoned and liquidation and house
cleaning takes place. Tho business men who
havo had to stand the strain who have seep
(Continued on Page 12)
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