Fifty years in Wall Street

by Henry Clews

At the same time that Wall Street is being riddled with hot shot, the railways are being harassed by State legislation, involving low rates, and projects are on foot that in effect would prevent their development to meet the wants of the people. All this is oppressive and inimical to the national welfare, and I advocate as a remedy removing the interstate railways from the control of the States, and placing them entirely under the control of the United States Government. This Congress can and should do promptly.

Another great difficulty the railways and other large employers of labor now have to contend with is the refusal or unwillingness of the Labor Unions to consent to a reduction of wages to meet reduced earnings. A lowering of wages has become absolutely necessary, for they are still at the high figures to which they were pushed during the long period of prosperity. They are at a boom level that railway and manufacturing corporations cannot afford to pay in these altered times. The Labor Unions should recognize this at once, and reduce their wage scales, and not wait until they are forced to yield. Moreover, they should see that with reduced wages a larger number of men could be profitably employed than is possible with wages as they are, and in this way the ranks of the unemployed would be reduced. This of itself would be of great benefit to both the working men and their employers, as well as to the country at large. It is a time when common sense should be brought into play in the adjustment of means to ends in wages as well as other matters, for the more it is the quicker will be recovery from the effects of the panic, and the less will be the suffering from industrial depression by labor as well as capital. This in the concrete means that it would result in there being fewer workmen in actual want, and fewer corporations going to the wall. It is one of the great remedies that the situation now calls for.

A general reduction of wages would to almost a certainty cause some mills that have closed to reopen, and cause others that are running on part time to run on full time. The advent of Spring will of course tend to stimulate recovery, so we shall have the help of Nature to repair damages. With Nature as an ally, we ought to rapidly overcome all obstacles in the way of complete recuperation.

Readjustment of existing conditions is the order of the day, and where there’s a will there’s a way, as we all know. The general reduction that has taken place in the price of commodities, and to some extent in rents, furnishes a very good reason of itself why wages should be reduced from the high points to which they climbed to meet high prices. As it is, the inequality between wages and prices is very conspicuous, and equality should be restored as quickly as possible. Equality is another name for justice. It is also the touchstone of taxation. Workmen should not forget that even half a loaf is better than no bread, and that by accepting reduced wages they are paving the way to better times for themselves as well as for the country. Then, too, they owe a duty to society at large. No one should be governed by the narrow, selfish policy of living for himself alone. This is a world in which we must give and take, and labor and capital have mutual interests.

The decline in commodity prices, that were before excessive, has been salutary and of vast benefit in bringing the necessaries of life within easier reach of the wage-earning masses, and in preventing many industries from going from bad to worse, through cheapening their supplies of raw material. The people generally, as consumers, benefit by this reduction in the cost of production, and in turn it tends to increase consumption and quicken trade and manufacturing enterprise. All these influences, too, toad to strengthen confidence in the situation and hope for the future. But the over-trading, extravagance and excessive speculation that primarily led to the panic should be carefully guarded against in the future.

The very severe and extensive liquidation that we have witnessed, not only in Wall Street but all over the country, has made the financial situation sounder and therefore safer than it has been for several years, for it must be confessed that many of our speculative captains of industry and finance passed far beyond the bounds of conservatism in their operations, and invited the crisis we experienced by their reckless assumption of inordinate risks and liabilities.

It was a fitting retribution when some of them were engulfed by it. Especially culpable and dangerous to the public were those speculative capitalists who sought and gained control of chains of important national banks, and then used their resources to extend their own hazardous speculative schemes. These men were really the immediate cause of the crisis, and they are now deservedly paying the penalty for it. But this is a small consideration in comparison with the enormous amount of havoc they created. One good thing, however, has come out of so much evil, and that is improvement in our banking condition, by the exposure and eradication of this unsound banking that prevailed in New York, and to some extent elsewhere.

We shall, in this generation at least, have no more such speculators stepping into control of large New York banks and using them pretty much as if they, their assets and deposits, were their own property. Those responsible for this unsound banking were public enemies, and we are still feeling the effects of their reckless and illegal proceedings. The fact that several of them are now under indictment for their offences is a reminder that the way of the transgressor is hard. Their elimination from the banking world removed a source of great danger, which might, if allowed to continue longer, have resulted in a far worse state of things than they actually created before their career was brought to a close.

A salutary effect of the panic is the check it has given to extravagance and waste in living expenses, and the practical lesson in economy that it has taught very many, for economy is wealth. To reduce expenses after business reverses is the best way to recuperate, and a little adversity is not without its uses among us, for we are beyond question the most extravagant people in the world. This extravagance in living has been the prime cause of much of the “graft” evil that has lowered the tone of our business and political life, to say nothing of abuses of power, embezzlements, corporation-looting, and other forms of dishonesty.

President Roosevelt in his war against illegal and dishonest corporate practices has certainly worked for the good of the country and to raise the standard of business morality; and the life insurance, railway and other corporate scandals that we are all familiar with have shown how much reform and purification were needed even in high places. Let us never forget, as the Bible tells us, that “Righteousness exalteth a nation” however great may be its material prosperity.