The Government felt that its duty required it to push forward the investigation of industrial corporations; and that the Nation so demanded. And it was in October that the chief of such corporations—the United States Steel Trust—had a Government suit for dissolution filed against it. The sturdy bell-wether of the corporation flock was attacked by the great United States Government. What would happen to the humbler members of the flock! Certain court decisions were reassuring to corporations in November and business brightened for the time being and during much of December in certain notable instances, for in that month the Interstate Commerce Commission report appeared and seemed less drastic in tone.
The year 1912 opened with an additional influence promising increased alarm and marking of time. I mean that candidates for the Presidential nomination began their canvasses, which, of course, implied new plans for making new laws to govern business conditions. Former President Roosevelt announced his candidacy in February. President Taft was already constructively in the field. Governor Harmon of Ohio was mentioned in many quarters as a successful reformer who wished soundly to guide but not unwittingly injure business, while Underwood was similarly praised in addition to his record on the recasting of the tariff into a further revenue measure. Champ Clark, Speaker of the House of Representatives, was a popular candidate. And Woodrow Wilson loomed up as though forecast by destiny. At first and in many important sections of the country considerably more delegates to the Republican National Presidential Convention were chosen for Mr. Taft than for Mr. Roosevelt. This and brisker business served to hearten conservative interests, and the general market revived despite the decidedly downward influence in our country of the gigantic strike among English coal operators, who thereby spread trouble throughout the British Empire, and, through the solidarity of the financial world to-day, affected every financial centre.
The remainder of the year was dominated by the Presidential canvass. Taft, called by many a "stand-patter"; Roosevelt, "the insurgent," who proposed to mend all the troubles of the political public by his usual brusque methods; and Woodrow Wilson, the "conservative with a move on," made their appeals for popular support. Until the verdict in November a see-saw market took place in the United States, while Europe and reflectedly the remainder of the world became alarmed lest the war declared in October by the Balkan States against Turkey should produce world-wide trouble.
The November Presidential election showed that Woodrow Wilson received 435 votes, Mr. Roosevelt 90, and Mr. Taft 8. However, the popular vote for Woodrow Wilson was more than 1,000,000 below that cast for Messrs. Roosevelt and Taft jointly, and about 2,000,000 short of a majority of all the votes cast for the Presidential nominees—Socialist, Republican, Democratic, and so on. But the vitally significant fact is that the popular vote for the "stand-pat" candidate—Mr. Taft—was very small in comparison with the joint vote of the three candidates whose platforms called for a drastic handling of National policies,—Debs, Roosevelt, and Wilson.
Drastic recasting of the rules of any game unsettles play. The market dropped. But fortunately for the country the ripe and balanced and active intellect and character of Woodrow Wilson, elected President, lent much re-assurance against the extensive political surgery he had been chosen to perform. All knew that he would be thorough and reasoning. All the grievous handicaps that business suffers from uncertainty of regulation, it was thought would be overcome as promptly as possible. But the pledged great change of the tariff was enough to induce retrenchment of business endeavor. With a major factor unusual in any proposition, how can stability, much less progress, be expected in any interest?
THE PANIC OF 19l3.—Retrogression in business began very early in 1913 and increased until mid-October, 1914. On October 3, 1913, the new Tariff had become a law; but other reforms still jostled business. However, by mid-October, 1914, the Interstate Commerce Commission seemed to have become less radical in its views, the Industrial Trade Commission was at work apparently studying the essentials of the industrial situation, the United States Supreme Court was delivering opinions in check of indeterminate statutory meddling with business and the splendid potential of the Reserve Bank system was offering for use.
It is hard not to overstate the vast re-assurance offered to business by linking together the banking power of the country through the Reserve Bank system. Just as an enormously large number of troops skilfully thrown into an endangered—a panicky—position will ensure success, so can the vast resources of the Reserve Bank system restore financial order when panic fear is declaring itself. During the past two years of threatening from the disturbances in Mexico, our country has learned to forecast the benefit that the Reserve Bank system predicates; but our stay and confidence has been the cool and far-seeing statesmanship of our great President, Woodrow Wilson.
The breaking out of the "World War" in August, 1914, had so flooded our market with securities held in Europe that the Stock Exchange, following the continental example, closed from July 31st till November 28th, when the New York Stock Exchange and other American stock exchanges opened for restricted business in bonds and on December 15th to unlimited trading in stocks and bonds. Other kinds of exchanges acted much the same. This checked business in every direction, despite the great issuance of temporary Clearing House certificates. In two months the latter tendency was changed in many quarters.
Then began the "war boom." Gradually it has spread, bringing such enormous profits in all our lines of business supplying the needs of the "Great War," that the first twelve months of it showed more than a billion dollars trade balance in our favor, and that balance then began increasing on a progressive scale. Money is yet plentiful. All business is stimulated. Our crops are unexampled in quantity and money value. Everything points to great prosperity unchecked until the "Great War" ceases and withdraws the stimulating demand for our supplies.
Then will come a readjustment of our trade. Money will have become actually or potentially scarce because of the previous vast expansion of our business, and all the banking power of our country will be requisite to prevent a crashing panic. The Reserve Banks will have gotten fully to work by then, it is to be hoped. They will be needed to lead in the life-saving operations. Such first aid to the injured will obviate such financial sufferings as the old-time panics presented. They can hardly be expected to reduce the casualties to the volume of the slow panic in securities in the year 1913, for the volume of business involved at present is vastly more swollen and the kind more circumscribed.