Obrázky stránek
PDF
ePub

stitutional history of the country. It contains the doctrine of direct responsibility.

A hundred and fifty years ago our forefathers had a very real dread of very real dread of tyranny and also a profound distrust of the dangers of graft and dishonesty in government. An even casual study of political events of that time will show that their distrust was well founded. To avoid tyranny and dishonesty they arranged our governmental machinery so that it did not give absolute power to any one man, or group of men. Two houses of Congress check one another and both check the President; the President, in turn, through the veto power, checks both branches of the legislature; the Senate, through its power of approving appointments and treaties, checks the President in civil administration and in the control of our foreign relations.

Since that time the danger of tyranny has largely passed and our political conditions have much improved. Moreover, the business of government is far greater than it used to be. As this strain grows efficiency becomes more and more necessary. And at last, somewhat reluctantly, we are forced to admit that efficiency is impossible under our old system of checks and balances, for under it no one can put a finger on the man responsible for success or failure.

To make our officials efficient they must have both power and responsibility. By withholding unchecked power from any one official, we possibly prevent that official from doing harm; on the other hand, we prevent him from doing good. Modern business proceeds on the directly opposite principle. It gives a responsible head absolute power to run the organization and then holds that head to a strict accountability for results.

If this idea is common sense as applied to private business, why should it not succeed as applied to public business? That is the question which the makers of the new constitution for New York asked themselves. Until the meeting of this convention, no state has attempted to introduce this conception of responsible government into its fundamental law. That is what makes this new New York constitution a document of the utmost importance. It

is the first constitution ever framed in this country containing a provision for a budget. It is the first to provide that some official shall assume definite responsibility for the administration expenditures of the

state.

Necessity produces most political reforms and necessity has produced this important one in New York.

Under the revised constitution the governor, on or before February 1st, must submit to the legislature a budget containing a complete plan of proposed expenditures. He must also submit details as to revenue, and a proposed legislative programme for raising the money required. He has the right to appear before the legislature and explain and defend his financial programme. The legislature can secure his presence for this purpose at any time. The law makers cannot increase the budget or any of its items: they can, however, reduce or wholly reject them. Under such a constitution no governor could take refuge for the wastes of his administration among the indistinguishable responsibilities of different legislators, and these legislators could not succeed in promoting wasteful projects, for the governor would know that whatever was passed would be held up against him.

Probably New York's proposed budget is not a perfect instrument; embodying a serious attempt, however the first ever made in our state and federal systemsto centre responsibility for expenditures and so enforce efficiency in government, it is the greatest step forward American constitutionalism has taken since the meeting of the great convention in 1787.

ANOTHER BANK FOR SOUTH

AMERICA

TA time when so much attention is naturally being directed toward the extraordinary chain of events that has ended in the half-billion-dollar Anglo-French loan, to the new and important rôle which this Nation is destined henceforth to play commercially and financially among the nations of Europe, it is satisfying to see that we are also making substantial progress toward the estab

lishment of closer business relations of the enduring kind with our Latin-American neighbors relations of which there has been so much talk since the war broke out.

Ever since we began to take serious account of our neglected opportunities in the enormously rich field of the countries immediately to the south of us, the provision of banking and credit facilities has been recognized as the necessary forerunner of trade development there. The important beginning made by the

manufacturer, the Mercantile Bank of the Americas will operate through control of an extensive chain of agencies. Such a system, the management of the new bank points out, is better adapted to the peculiar conditions prevailing in its field than that of directly operated branches, because the employment of native knowledge and talent is perhaps the first essential to successful trade.

National City THE SUCCESS OF WIRELESS TELEPHONY

Bank of New York-the first and so far the only institution to take advantage of the authority granted by the Federal Reserve Act for the establishment of branches of national banks in foreign countries is well known. It now has, in addition to a recently acquired branch in Havana, Cuba, five active branches in South America-three in the coffee region of Brazil at Rio de Janeiro, Santos, and São Paulo, one in the Argentine at Buenos Aires, and one in Uruguay at Montevideo.

To this same end of reciprocal trade relationship the National Shawmut Bank of Boston has lately established connections as agent and correspondent with the Banco de la Nación, Argentina, the government bank of that republic and the largest in South America.

A still more recent development, and one of as much economic significance, has been the opening in New York under the auspices of two large private banking houses-Messrs. Brown Brothers & Company, and J. & W. Seligman & Company of the Mercantile Bank of the Americas, Inc. This new institution, which is adequately capitalized at $5,000,000, has chosen for its field of operations Central America and the northern republics of South America, where there is now relatively small need for general banking facilities, but very great need for capital to use in producing and marketing coffee, cacao, and hides, the chief articles of export from those countries to the United States.

In undertaking to meet the need for such capital and thereby not only to reduce the large toll which European bankers have heretofore exacted from this country for that service but also to facilitate the opening of these new markets to the American

P

ERHAPS the most striking aspect of the recent invention of longdistance wireless telephony is the coöperative endeavor among men of many callings that was involved in the production of it. According to Prof. Michael Pupin, of Columbia University, whose own work was one of the many elements that entered into the final result, credit must be given not only to the engineering staff of the American Telephone & Telegraph Company, headed by Mr. J. J. Carty, but also to Mr. Colpitts, the chief of the Western Electric Company's research laboratory and to Dr. Whitney, the head of the research work of the General Electric Company. Dr. Lee De Forest, the inventor of the De Forest system of wireless telegraphy, claims credit for one part of the mechanism. And of course, without the pioneer work of Mr. Guglielmo Marconi, the achievement would long have been deferred.

Thus, one of the dreams of speculative scientists has come into reality-in the guise of a few seemingly simple instruments -through the cooperative work of an Italian scientist and the scientific staffs of three American corporations. It is an admirable example of the fine helpfulness and long-visioned patience of enlightened business working with pure scientists to achieve results that gratify both equally and that serve the public as well.

Both of two problems were solved before success with either was announced. The first was the problem of aërial transmission of the human voice. The other was the problem of connecting the wireless system with the existing wire lines. Thus

it was made possible not only for naval officers at the Government wireless station near Washington City to talk to Mr. Carty at the Mare Island Navy Yard near San Francisco by wireless, but it was possible for President Vail of the telephone company to talk from New York to Arlington by wire and to have his voice at Arlington leap from the wire into the ether and span the continent. This means that ultimately a man in Cleveland, O., will be able to talk to a man in London, England, and that the conversation will travel by wire from Cleveland to Sayville, Long Island, by wireless from Sayville to some wireless station near London, and from that wireless station to London by wire.

PRESENT BUSINESS OPPORTUNITIES

T

HE New York Central, the Pennsylvania, and other railroads are reporting better business than last Judge Gary reports the steel mills. running at full capacity and fair prices and with satisfactory orders ahead.

The reports from the Federal Reserve Districts show a hopeful tendency. There

no great general improvement but there seems to be a little more activity almost everywhere, and with that activity a stimulating confidence. Crops are good in the West, and cotton prices are up again, and the producing of war supplies keeps many manufacturers and others busy who would otherwise be idle.

So much for the physical conditions of business. The stock market barometer of business is temporarily deranged. Speculation in the so-called war stocks has created a "boom" in Wall Street. Some people have made fortunes in the speculation, many people have made money, a few have lost, and many more can assuredly look forward to losses, for the public never vet participated in a boom of this nature without being left holding the bag when the boom was over.

But though as investors and workers at one trade of another in this great land we need give little heed to the gyrations of the war stocks, there is ample reason for us to pursue our accustomed

activities with reasoned confidence. Those of us who sell our services or our products here at home have no reason to hesitate. The public here has money to buy. Those of us who sell our products to the Allied nations can work with a renewed confidence now that the loan has strengthened their credit here. Those of us who sell in South America and in the East must do so with confidence, for this is our opportunity to make friends and markets to increase our prosperity in the future.

The last year and a half has been a time of opportunity for men of courage and ability, for the shock of changing circumstances takes many of the timid out of the

The foundations of most large successes are made in times of disturbance. In such times men develop a stride that carries them far in the easier times that follow. In those easier times when almost every one can succeed are bred the germs of disaster. But now is the time to build courageously and well for the future.

PLAYING WITH THE TARIFF

HERE is again being revised the old and commendable project for a non-political tariff commission to which, after the manner of the times, the word "scientific" is attached.

It is admitted on all sides that the committees of Congress which frame the tariff schedules do not have time to find out the facts on which to base their recommendations. It seems wise, therefore, to have a permanent tariff commission to find out the facts.

Under the present system Congress makes up its mind whether it wants a revenue tariff or a protective tariff, and then tries itself to write a bill that will carry out the policy wanted. Congress is and must remain the body that decides on what kind of a tariff we are to have. But that being decided, Congress can come much nearer getting what it wants by having experts translate its general programme into a specific bill. These experts might form a permanent tariff commission or they might form a part of the Department of Commerce, or they might be the members of the Trade Com

mission. Any of these agencies could do the work for Congress better than Congress can do it for itself.

If Congress would use any of these agencies tariff legislation would be greatly improved. But whichever agency were used would have to follow Congressional instructions and at one time devise rates for revenue only and at other times for protection. Our tariff policy would change just as often as it does now, but each change would be the intelligent working out of whatever policy was for the moment being pursued.

This plan could work as well for a low tariff as it would for a high tariff. As a matter of fact, however, there is good reason to believe that the tariff commission plan is being agitated chiefly by believers in high protection. The evils of the protective tariff as passed by Congress received such wholesale public condemnation that the protectionists are looking for another way to get their measures adopted.

This fact ought not to drive any low tariff advocate to oppose the idea of relieving Congress of the details of schedule-making. It ought, however, to make them particularly wary of the wording of any bill ostensibly designed for this purpose.

II

Along with the non-partisan "scientific" programme there is a constantly expressed dread of a flood of European goods that will swamp us and a cry for some protection against this menace.

The theory is that wasting a nation's capital, ruining its markets, and killing its men make it a more dangerous competitor, because in its reduced condition it will be willing to accept any profit however small and its labor will be willing to work for minimum wages.

On the other hand European labor may prefer emigration to starvation wages, so that labor may be increasingly scarce. Capital is likely to be scarce and taxes are certain to be high. Perhaps all the advantages are not with the warring nations. It is even reasonably probable that were we fighting and were Europe at peace those who now cry for protection against

the competition to come from the present belligerents would then be crying for protection against the competition of countries undisturbed by war.

Yet we should not let our discounting of the constant howl for help and protection blind us to a real and unfair hardship to which some of our industries are exposed We have laws in this country against monopolies and unfair practices. In certain other countries the governments encourage and enforce monopolies and unfair practices, and these foreign monopolies use unfair means against our producers and in the long run to the detriment of our consumers. We should stringently prevent these abuses by foreign companies which we will not tolerate in domestic corporations.

THE EARLY BUYER GETS THE BEST CHOICE

IN

IN THE next fifty-five days 95 per cent. of the Christmas presents in the country are bought. The pleasure of buying and the likelihood of buying what will give real pleasure grow progressively less the nearer to Christmas it gets.

The movement for earlier Christmas shopping originated several years ago in the humane desire to relieve in some measure the oftentimes cruel pressure of work on the girls who serve behind the counters during the week or two before the holiday. It has wisely received the support of the merchants, because they have realized the losses they have suffered through carelessness and haste in the confusion of their crowded stores. And many purchasers have coöperated because they have discovered the satisfaction that comes of unhurried selection from stocks of goods that have not been depleted of the choicest articles.

Nevertheless, there is still room for extensions of the efficient and gracious custom of early shopping. The wise thing to do is to buy between the first of November and the 15th, when the Christmas stocks are new and the salesmen and women untired and when the crowd of shoppers is not hampering. And this is a good year to buy Christmas presents generously and wisely.

DIVIDING THE RISKS IN INVESTMENT

Every month the WORLD'S WORK will publish in this part of the magazine an article on experiences with investment and the lessons to be drawn therefrom

A

MAN with whom the editor of this department has had occasion to discuss questions of many kinds pertaining to the employment of money in the security markets was talking the other day about "the inevitable percentage of the unforeseeable" in investment.

To illustrate, he drew upon his own wide personal experience, and related some instances involving several of what he called "preferred classes" of investments, in which the unforeseeable had come to pass in most unusual ways. His illustrations are given here for the benefit of those of more limited experience who are apt so frequently to become impatient, and even discouraged, upon finding competent authority invariably unwilling to put the stamp of absolute security on any single investment.

For his first illustration, this investor took the case of a certain street railroad bond, which he explained was one of an underlying issue of a company operating in one of the large cities of the country. It had originally been brought out by an investment banking house that is numbered among the most conservative and the most loyal to clients. The property on which the bonds were secured, he said, had for many years been a profitable one, earning a wide margin over its fixed charges. But trouble arose between the city and the company concerning the franchise, which was held by the company to be perpetual, but by the city to have expired, with the result that the company had been ordered to vacate the city streets. A legal fight, now being A legal fight, now being carried on in the United States courts, had, of course, ensued, and meanwhile the company had found it necessary to withhold the bond interest leaving the bondholders without any immediate prospect of redress.

In short, here was a bond, secured by a thoroughly tested and successful public

service property, brought out in good faith by one of the best firms of investment specialists and under the best legal advice, defaulting because of an element which could hardly be guarded against, absolutely, if the business were to be done all over again.

A bond secured by natural resources was taken for the second illustration. The security in this instance was a valuable coal property, appraised by experts at more than twice the total issue of bonds, and in active operation, with a comfortable margin of earnings at the time the bonds were issued and sold. The property was located, however, as the investor explained, on a railroad which had subsequently failed and passed into the hands of a road affiliated with coal mining interests hostile to the independent mines. This resulted in such poor railroad service to the mines of the company that issued the bonds in question that it failed to carry out its contracts and was forced to default. The property was in due time bought in by the bondholders at foreclosure sale, and had recently been sold for less than fifty cents on the dollar, payable in other bonds the value of which was problematical.

The reasons entering into this failure, the investor said, appeared to have been unavoidable, because no one could have foreseen the failure of the railroad and its effect upon the coal company's business. Nothing was wrong with the property itself.

The third illustration gave the following brief account of the history of a certain issue of bonds put out by a railroad that was a "feeder" to one of the great transcontinentals:

The smaller road had prospered from the beginning and had been extended until the bonds in question, being part of the first mortgage issue, represented only about $6,000 a mile, and there were junior to them about $34,000 per mile of refunding bonds,

« PředchozíPokračovat »