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Che World Co-Day
In Days of Hesitation
T is now several months since Wall Street undertook to cure a case
of financial Grip with remedies that all but produced heart-failure.
Since then the country has been promising itself a speedy recovery of normal conditions. Convalescence has indeed begun, but it is not as rapid as some of the optimists expected.
Banks have been retiring their clearing-house certificates, mills and factories have reopened, country banks have begun to release the cash they drew from city banks; but the great currents of trade have not yet acquired the momentum of the past.
In so far as this relates merely to the transactions of the Stock Exchange, there is little complaint to be heard. But we may as well face the fact that our troubles are not merely those of currency, and, however much they may be alleviated, are not to be cured by increasing the volume of currency. Financial difficulties were the acute symptom of a worldwide economic reorganization.
Prosperity always begets a new debtor class, just as it makes new recruits for the lending class. A few years ago, for instance, there was small opportunity for placing farm loans. Now many farmers have sold their farms and have gone to live in the small towns, while the new owners are borrowing both to pay for the farms and to purchase machinery
(Copyright, 1908, by THE WORLD TO-Day COMPANY.)
We can hardly expect that the business world will return to normal conditions until there is a readjustment throughout its entire extent. For the man who was forced to expand against his will, this period of readjustment is not likely to bring serious results. His very objection to exploiting prosperity will have proved a blessing.
But it will take time for the reckless expansionists to readjust themselves.
There will be more or less distress on the part of those who have been living as if the feverish prosperity of the last few years was excessive health. The penalties of extravagance must be met by the world at large, whether that extravagance took the form of rebuilding factories that did not need rebuilding, mortgaging one's house to buy an automobile, or buying unneeded furniture on installments.
But after a man has thus adjusted himself to these unattractive facts there remains another duty-confident hope. In those sections of the country where the raw material of wealth is produced, there is, and there will be no serious distress. We can see to-day as never before how true have been those prophets who have declared that to the farmers the country is to look for financial stability.
Fifteen years ago a situation such as we see to-day would have given rise to a new populist movement. So far as can be seen there is no evidence of radicalism. We face a presidential year with no great issue before us except that of whether we shall maintain the policy of President Roosevelt-a policy that meets with the approval of practically every man in the country except those who have overexploited their borrowing power.
It is a moment of hesitation, but not a moment of despondency. It is a moment that suggests reaction, but only to those who are the manipulators rather than the actual purchasers of wealth, whether they be farmers or manufacturers.
Reasonable consideration, caution that does not border on timidity, sensible rather than extravagant expenditures, a decrease in our financial self-consciousness, will inevitably bring about the reëstablishment of normal conditions.
In a word, “Sit tight and trust the horse!”