gold standard doubtful. The principal cause of the panic, however, was the appreciation of gold. The persistent fall of prices increased the burden of debts and imposed an unmerited hardship upon large numbers of producers. The free coinage of silver was demanded as a measure of relief. The remarkable increase in the world's output of gold relieved the country from the menace of the silver movement. If prices had continued downward, if wheat had fallen to twenty-five cents per bushel, as Mr. Bryan wrongly predicted, the silver agitation would probably have continued unabated. Likewise, the discontent due to the present era of rising prices promises to continue until the cause is removed, or until the depreciation of gold is offset by some monetary device. Economists are at present discussing the practicability of a "compensating dollar."
Too much is made of the extent to which industry is occasionally disturbed by proposed reforms. Human nature is prone to make a scapegoat of others for failures which belong at home, and this tendency seldom appears in a poorer light than when some man of large affairs blames a leading politician for results due to his own cupidity, lack of judgment or dishonesty. If political discussion did not arouse the unwary and keep the investing public on its guard, there is no telling to what lengths the issue of fraudulent prospectuses, the excessive capitalization of good will, the merging of properties at fictitious valuations and other methods of high finance would be carried. Neither is it possible to foresee how much mutual confidence and good faith would be undermined and business disturbed if the politician did not stay the use of these methods. The ordinary man often owes the politician a vote of thanks for saving him from the wiles of the manipulator of securities. The dishonest promoter is less in the public eye than the dishonest politician and is therefore more of a menace to the community. The security market needs more, rather than less, political airing. There is too much parrot-like imitation in making investments, too strong a disposition to accept off-hand opinions as authoritative, too little proneness to analyze reports and to form independent judgments. The result is that the only dollar many people feel sure of is the one they have spent. A leading Chicago daily remarks editorially:
Neither legislatures nor state commissions are responsible for the troubles of the New Haven system. Yet those who have complained and demanded investigation have been denounced as enemies of railroads and their security holders. What would happen if we had a vast twilight zone in the railroad world; what speculators, would-be monopolists, experts in the art of running railroads from Wall street would do in that zone may be left to the imagination of intelligent men.[1]
Modern industry is so organized that it alternates between excessive activity and stagnation, and if it were possible to divorce business from politics there is little reason to suppose that trade fluctuations would be less marked. On the contrary, the reverse would probably prove true.
- ↑ The Record-Herald, July 10, 1913.
