Fifty years in Wall Street

by Henry Clews

This conservatism and consequent contraction of the overwhelming volume of business, will, it is believed, prove the strongest force in averting further trouble and disaster. I have for some time been urging the application of this brake, or safety valve, of conservatism, and it is really imperative.

In an effort to meet the demands of the enormous business offered them, the great railway and industrial corporations sought to enlarge their equipment at vast expense. In this they acted unwisely. They overtraded. To use a common saying, “they bit off more than they could chew.” It was, perhaps, excusable, not very long ago, when confidence was in its zenith and credit superabundant, to attempt the financing of mammoth undertakings. But unexpectedly and like a bolt out of a clear sky, came the startling insurance and other exposures, and gradually timidity took the place of confidence. Then capital, which is always more timid than usual at such times, began to contract, and many railway and industrial corporations found themselves unable to borrow the large sums needed to meet their extraordinary expenditures.

The banks in many instances, having already over-extended credits, were unable to provide the necessary funds, and new securities, owing to excessive supplies and other causes, ceased to find the ready market that they had enjoyed for so long a period. Investors took wing. Curtailment, therefore, in every direction became a necessity, so President Roosevelt can no more be blamed for the existing depression and panicky disturbance than he can be credited with all the great prosperity that preceded the crisis.

That this reaction, culminating in a panic so severe, came just at the time it did, is largely if not wholly coincidental. It cannot be denied, however, that the startling disclosures of wholesale wrongdoing on the part of many of the great railway and industrial corporations disturbed the confidence of the public to the core and paved the way to it.

The indictment and prosecution of the rich and powerful corporations that had been violators of the law were but the necessary and legal consequences of their own guilty conduct.

Article II, Section 1, of the Constitution of the United States requires that before he enters on the execution of his office the President shall take the following oath: “I do solemnly swear that I will faithfully execute the office of the President of the United States, and will to the best of my ability preserve, protect and defend the Constitution of the United States.”

Section 3 of the same Article of the Constitution, in enumerating the duties of the President, says: “That he shall take care that the laws shall be faithfully executed.”

As at the time of his inauguration as President of the United States, Theodore Roosevelt solemnly swore that he would faithfully execute its laws, all of you, I know, will agree with me when I assert that he was bound to loyally and fearlessly keep that oath.

As an honest man, he has only tried to do his duty. He has attacked the law-breaking corporations, and those in control who have amassed large fortunes out of them dishonestly, and these only. Not to have prosecuted and to have let these corporations, and their officers, go on, unchecked and unpunished, would have been to violate his oath of office and to neglect the duty imposed upon him.

It would certainly make a farce of this great republic, and cast a stigma upon our integrity, if the laws of the land were not enforced against the rich and the poor alike! No such reflection as that upon our national honor will ever be tolerated by Theodore Roosevelt! He has been ready at all times to uphold the national honor. It has been well said that the honor of the nation is the soul of the nation.