ried along with the rising tide of prosperity.

As the profits increase, heavier orders are placed and large contracts for new construction are made. Again, these still further swell the physical volume of business and help to drive prices farther upward. The boom is on. And this prosperity contains within itself the seeds of future depression. As old contracts expire, new ones are made at higher costs-materials, interest, rents, salaries, all go up. Out-of-date equip ment and uneconomically located plants are called into use. Everybody bids for labor and wages mount, with overtime and bonuses common. Labor and management decline in efficiency, because undesirables are employed, and when jobs are easy to get men do not put forth their best efforts.

Finally comes the time when the supply of funds at the old rate of interest lags behind the volume of business. New bonds can be floated only at higher rates. Capital gradually grows scarcer. This reduces the prospective margin of profit, and here and there a new venture is postponed. So certain businesses which depend on industrial expansion for their own prosperity begin to feel a tightening of the lines. Buyers are starting to defer the execution of new plans. The demand for consumer goods is rapidly reaching its climax. With the restriction of those businesses which have to do with industrial expansion comes a lessening in the orders to enterprises that furnish them with materials.

High interest rates force the unloading of stocks previously held off the market to be sold at higher prices. Profits begin to waver; wary creditors conjure up imagined losses because of the shrinkage in the market value of the enterprises to which they have lent money. They begin to refuse renewals of old loans; they press for a settlement of outstanding accounts.

And so liquidation starts in and rapidly extends, because as one enterprise is called on to pay its maturing debts it makes similar demands of its own' creditors.

A new phase develops-industry is forgetting about profits and trying to forestall bankruptcy. Instead of trying to make sales, executives devote their energies to saving money. Expansion gives way to contraction, securities begin to fall and commodities follow the downward trend. Credit adjustment has created a crisis. In the old days, right here would we have had a money panic, but the Federal Reserve Bank Law has given us a safety-valve and the impending depression is industrial rather than financial.

It comes on fast; just as prosperity began cumulatively, so depression starts in the same way. The discharge of wage-earners lessens consumer demand. Savings go and family incomes fall. Investor demand diminishes, because people with money will not go into new terprises while business is depressed.

This causes further contraction, and every reduction of employment creates another reduction of consumer demand, which further depresses business demand and discourages investment. As prices fall, competition is keener for the remaining business. Every reduction in price is the progenitor of another reduction. Wholesale prices tumble first. Raw material falls faster than manufactured goods. Lessening profits spread discouragement and check enterprise; but right here when things are blackest are the germs of revival.

Costs of doing business are being reduced. Labor and management become more efficient as jobs grow scarcer. Economy is the watchword. Loosely organized concerns are reorganized to save them from disaster. Rents and salaries are pruned, old debts are written off, and inventories are revalued. Production sinks to lower levels and the demand for accumulated stocks slowly makes itself apparent. Articles used as long as possible wear out and must be replaced, and the first step towards revival is the fact that the demand for goods finally ceases to shrink.

With all these readjustments the crisis is gradually overcome and recedes into the past, and hoarded.capital held at low rates of interest seeks outlet at more attractive yields. A few bold ones put their money into new enterprises; business prospects brighten with the payment of old debts and the disappearance of accumulated stocks. Prices slowly stagger upwards; the banks have money to lend and want to lend it, and so revival starts in ever-widening circles and the business world is back where it began.

To attempt to blot out such an economic process would be futile. It simply cannot be done. Every period of "prosperity" has in itself the very forces which will eventually make for its undoing. Credit is at the bottom of the matter, and business cannot exist without credit.

But the business cycle, in part at least, can be controlled.

But how?

Last October the President's Conference on Unemployment, after adopting a series of recommendations for temporary measures of relief, suggested that an analytical study be prepared of the causes of the business cycle and an attempt be made to collect facts and statistics as to the best methods for offsetting bad results of the periods of expansion and depression which have been characteristic of our industries. Secretary Hoover, Chairman of the Conference, appointed a committee on the business cycle, namely: Owen D. Young, Chairman; Clarence Mott Woolley; Joseph H. Defrees; Matthew Woll; Miss Mary Van Kleeck; and Edward Eyre Hunt, Secretary.

The work of making the survey of the business cycle has been undertaken by the National Bureau of Economic Research, Inc., 175 Ninth Avenue, New

York City, of which Dr. Wesley C. Mitchell, the American authority on the business cycle, is Director.

The Committee is to report in November. It will make certain definite recommendations. Some of them will

deal with the part which the Government is to play and some of them with industry's share in the new business life of the Nation. Statistics of course wil! have much to do with the solution of this problem of the business cycle, to which forehanded men are looking as a possible way out of their many troubles.

Taking this for granted, what are some of the proposals for controlling the business cycle? Various authorities have suggested certain possibilities. Government and railway purchases may be used as a balance-wheel to steady the business mechanism. Rolling stock might be ordered over the whole period of a business cycle, reducing the volume of orders in good years and increasing it in bad ones. The Government might hold back its great projects in years of intense activity and not bid against private enterprises for labor and materials, postponing its best efforts to seasons of dullness, and thus providing work for the workless and markets for those who have stocks of material to sell. It has been suggested also that roads be built in bad times and that colleges, schools, and Federal building projects be pushed when labor is idle and prices are low. In the aggregate this will be a very material help.

Mr. Hoover has outlined further remedies. He advocates the systematic forecast of business conditions. Present statistics are inadequate, because they do not cover the field and they do not bring to one business what is going on in another one. Such a knowledge is now possessed by the few, but if our plans work out it will be the property of the many.

This is not mere theorizing. Many industries have solved the problem for themselves already. It is the boast of some of them that they were able to forecast the acute depression of 1920 by fully six months, so that they were able to go through the crisis without discharging a man or clipping a dollar from their dividends. They did not buy in the boom, but they devoted all their energies to selling in the slump. They cut down production, they reduced prices, they paid their debts, they discounted their bills, they liquidated their inventories, and wrote off bad accounts ahead of hard times.

What the Committee hopes is to help many business men by informative statistics and their own business barometers to gird themselves against future depression. Thousands of American business men, by wise thought and careful planning, can largely control the cycles of depression by forecasting the course of their own particular business.

This is the first time that the problem has been resolutely attacked. It is a

real effort to deal fundamentally with a failure in our industrial and economic organization which is as old as industrialism. Mr. Hoover says:

There is a solution somewhere, and its working out will be the greatest

blessing yet given to our economic system.

This is a long-time job. It is an old and world-wide industrial problem which we can solve only by American ingenu

ity and sticktoitiveness. This dismal economic phenomenon has been endured too long by civilization without an organized attempt to combat it.

The time to begin an effective, vigorous, aggressive attempt is to-day-now.

E

VERY time the farmer touches the tariff he gets burned.

It was so in the 60's, when the farmers entered into a deal with the Eastern manufacturers to outvote the South and put through a programme of protective tariff and free Western lands.

It was so all through the years when the farmer's voice was strong in condemning the tariff, yet his vote was too weak to upset it.

It bids fair to prove true again to-day, when the farmer admittedly has the votes and the power in Congress to get just about anything he wants.

"If the present Tariff Bill goes through, it will impose a charge on the American people of between five and six billion dollars in excess of the actual amount necessary to offset the difference in wages here and abroad," says Gray Silver, head of the organized farmers' legislative activities at Washington.

The farmer seems to have been outtraded. He has come to the point where he needs some tariff protection against a few products, such as wool from Australia, frozen eggs from China, lemons from Italy, and hides from South America. Except for these products and a few others, tariff protection is practically useless to the farmer. Of what good, for instance, is a tariff on corn or most grades of wheat, when the American farmer must export these products and sell in competition with the producers of all the world? On our really important crops-the crops that bring in the money-tariff protection means little to the average farmer.

Yet Congress has liberally provided him with a nice, fat, new tariff on nearly all agricultural products. The farmer can't say that the tariff-makers in Congress never did anything for him. They have. They have been most generous with their tariffs-on farm products that do the farmer no good. And then, having done this, what could be fairer than to give everybody else high tariffs on their products too? Certainly the farmer should not object to that theory, the tariff-makers argue. So, as Mr. Silver points out, the farmer is placed in the position of paying billions more for the things he has to buy and receiving tariff benefit on a few comparatively insignificant products.

The farmer believes in protecting in

fant industries and in protecting against ruinous competition, but what raises his ire, and what should raise the ire of all consumers, is to see tariffs used merely for the purpose of raising prices in this country. For instance, a tariff of twelve dollars is asked on ammonium sulphate, a fertilizing material, at the very time the producers are selling large quantities abroad. Glove manufacturers are asking several hundred per cent duties on grades of gloves not even made or likely to be made abroad.

But how, you ask, has it been possible for the tariff-makers to put this across if the farmers hold the balance of power in Congress?

Well, in the first place, they haven't finished the job of putting it across yet. Not quite, but they very likely will.

The difficulty comes from the fact that the agricultural bloc is a bi-partisan organization. And the tariff is not a bipartisan matter. It has furnished the chief party issue during all these years when party issues were scarce. A lot of Democrats have come out in favor of protection of certain specific things, and some have even adopted the idea of sufficient protection to overcome the difference in labor costs here and abroad. But it is not quite possible yet to get the two parties to lie down together on the same tariff bed. Not even in the agricultural bloc.

You see, tariff isn't essentially an agricultural question, although it of course affects agriculture. So the bloc members and the Farm Bureau leaders very wisely agreed right at the start not to touch the tariff problem as a bloc. Tariff has never been discussed at a single meeting of the agricultural bloc.

Now a new bloc has arisen in the Senate a so-called agricultural tariff bloc. It includes some twenty-five Senators, all Republicans, and mostly from the mountain States and the Pacific coast, but for some unexplained reason including Senator New of Indiana, Senator Willis of Ohio, and Senator Keyes of New Hampshire. Its chairman is Senator Gooding of Idaho, and it includes several members of the regular agricultural bloc, notably Senators Capper and Ladd. It holds regular meetings and works on the Senate tariff-making comImittee with considerable effect.

But this is not an agricultural organization. Certain agricultural groups, like

But

the poultrymen, the wool men, and the butter producers, who want high tariffs on their products are glad enough to accept the help of the tariff bloc. the big and powerful agricultural organizations like the Farm Bureau and the Grange take little notice of and have very little to do with the tariff bloc as such. The reason is that all the bloc's efforts are to increase tariffs; they are doing nothing to get schedules cut down on the products the farmer and the consumer have to buy.

The opportunity for this unsatisfactory situation arose when certain farm organization leaders, with more vehemence than logic, asserted last fall, “We are going to ask for the same tariff protection the manufacturer gets." This statement was later corrected to read, "We insist that tariffs be such only as are necessary to overcome the difference in the cost of production in this country as compared with costs in foreign countries." But the damage had been done. The manufacturer said: "All right; we are perfectly willing to give you the same kind of tariffs we take. We want high tariffs; you may have high tariffs, too, on your farm products."

Right there the farmer was out-traded. Whether or not he can improve his position before the Tariff Bill is finally passed remains to be seen.

What the farmers' organizations are working for now is to take the tariff out of politics.

They want a non-partisan tariff board that will make scientific determinations as to just what duties must be laid to make up the difference between labor costs here and abroad, investigate special exceptions to this general rule, and then present a Tariff Bill to Congress to enact with but brief discussion and few modifications. The American Farm Bureau Federation has indorsed and is working for the Frelinghuysen Bill designed to accomplish this purpose. Can it be enacted?

Senator Gooding says: "Not until the South is educated away from the freetrade idea."

Senator Ladd says: "Tariff can and must be taken out of politics. It will only be a little while longer now until this is accomplished."

Give the farmer a little more time, and he may yet learn how to handle the tariff without getting burned.

I

T was with a shock of deep personal grief that I received, a few days ago, the announcement of the death of I had been Alexander Graham Bell. closely associated with him for more than thirty years, and had come to know him intimately, not only as a scientist, but as a comrade and friend who was interested in all the things that I most cared for, and who shared with me the happiness that he himself derived from the study of science, the love of nature, and the pleasures of outdoor life. For twenty-five years I sailed with him, hunted with him, and camped out with him in a country which was then little known, but which afterward attracted wide public attention on account of his love for it and long association with it. In the close intimacy of camp, log cabin, sailboat, and wilderness I came to know him well and to feel for him the deepest affection and respect. I never made any notes of my association with him, and I have doubtless forgotten many incidents that would throw light on his character and life; but I still remember a few, which may have interest for those who did not know him personally.

I made his acquaintance in the city of Washington nearly forty years ago; but I did not come to know him well until 1889, when we began to spend our summers together in eastern Nova Scotia. There, on the island of Cape Breton, where we both had summer homes, we were very closely associated, and there I first became interested in his scientific work. His house and laboratory were situated on the southeastern side of Baddeck Bay, nearly opposite our cottage, and, as all his more spectacular experiments were tried either on the bay or on the side of the promontory beyond it, they were in plain view from our ve randa. Soon after he made Baddeck his summer home he became interested in the problems of aeronautics, and after studying the action of the wind on movable planes he took up the development and improvement of the cellular or box kite. This seemed to have great lifting power, and he hoped that by increasing the number of cells and making them tetrahedral in form he could create a structure that when forced through the air by a powerful motor would actually fly. Scores of times, in the first years of our life in Baddeck, we rushed out on the veranda, glasses in hand, to watch one of Mr. Bell's kites as it rose, like a huge empty honeycomb of red silk, into the upper air. These kites, which were made in Mr. Bell's laboratory under his direct supervision, were carefully built structures of bamboo, silk, and piano wire, and were as perfect in workman

BY GEORGE KENNAN

1 Killed September 17, 1908, by an accident. while he was flying with Orville Wright at Fort Myers, Virginia.

active brain was amazingly fertile in ideas and expedients; the range of his interests was very wide, and he thought of and constructed all sorts of things, from the induction balance and the telephonic probe to the graphophone and a machine for the resuscitation of the apparently drowned. A series of experiments that interested him for a long time-in fact, almost up to the day of his death-had for its object an improvement of the Nova Scotian breed of sheep by means of artificial selection and mating. He gave a great deal of thought to questions of heredity and eugenics, and long before he discontinued his kite experiments he was engaged in an attempt to create a variety of sheep that would bear twins regularly and triplets frequently, and thus reproduce itself with great rapidity. These experiments were completely successful so far as the establishment of the desired breed was concerned, but whether the gain in fertility was not counterbalanced by a deterioration in flesh and wool I do not know.

Any matter that happened to interest Mr. Bell he studied with patient care and investigated by means of original and often highly ingenious experiments. At one time, I remember, his attention was drawn to the waste of heat that results from the burning of fuel in open fireplaces. He at once began a series of experiments to show how great this waste is and to prove that most of the lost heat might be conserved. One afternoon he took me up into the attic of his house to show me a wool-packed tank holding a hundred gallons or more of water whose temperature had been raised to 168° by the conserved heat of an ordinary kerosene lamp burning in a room two or three stories below.

At another time he became interested in the distillation of salt water for drinking purposes. Off the coast of Nova Scotia fishing dories frequently get lost from their ships in fog, and their occupants suffer greatly from thirst before they can reach the land. To Mr. Bell this seemed unnecessary, and he invented a compact and portable still, which occupied very little room, but which could turn salt water into fresh fast enough to sustain the life and miti gate the suffering of two or three men who might happen to get adrift in an open boat. When the miniature yacht Typhoon sailed from Baddeck for England, two or three years ago, it was provided with one of these stills for use in case of accident or emergency.

At one time Mr. Bell was greatly interested in astronomy and meteorology, and in the fall of 1897 I was present at