consumers are not under our care but under the care of their own governments. It seems reasonable, therefore, to let our manufacturers combine for export whether they take in every one in the trade or not. Particularly is this true since we are unable to protect our individual exporters from unfair competition from all combinations. All we can do is to prevent them from being subject to unfair competition from American combinations. For example, if all but one of our tire manufacturers were combined we could dissolve the combination if it cut prices in Australia to kill off the individual American firm; but we could not prevent English or French tire makers from combining against it.

When Congress reaches this subject it is to be hoped that it will do whatever is necessary to enable combinations to be formed for foreign trade, for restrictions against them are merely artificial barriers to trade with no compensating advantages.

A MISFIT IN LEADERSHIP

T

HE Democratic majority in the House of Representatives chose Mr. Claude Kitchin as its leader. The primary reason for this was that he had served longer than any other Democrat on the Ways and Means Committee. The other reason was that he is an honest man of considerable ability. Despite the fact that there are Democrats better fitted to lead than Mr. Kitchin, the fact that he has honesty and ability might on the surface seem a fair justification of his choice.

But no one would consider it a wise choice if the directors of a railroad chose as

inability to lead or even to follow will serve as a continuous piece of evidence against the Democratic Party's ability to run the country, for a really able organization would never sanction such a misfit.

Mr. Kitchin's opposition to the defense programme will properly hurt the Democratic Party. It would properly help the Republican Party if it could guarantee any better system of leadership. But it cannot. For instance, Mr. Mann, the minority leader, recently appeared as the "headliner" in a German propagandist paper. There is very little intelligent or responsible leadership in Congress in either party. Mr. Kitchin merely happens to be a Democratic example of the lack of leadership. So long as we acquiesce in the pork barrel we cannot hope that Congress will discuss questions from a national point of view; we cannot hope that the ablest legislators will have as much influence as the ablest pork hunters; we cannot hope to have Congress on the high plane it should be on.

And yet, curiously enough, while it is true that the pork barrel is chiefly to blame for the lack of responsible leadership in Congress, the man whom this vicious system has misplaced in the leadership of the House is one of the few Congressmen. whose record has no porcine flavor. Mr. Kitchin has not represented his district to the detriment of his country. Both his district and his country may be well satisfied with his services as a Representative. tive. But nothing but the irresponsible method by which Congress conducts its affairs could have resulted in the leadership of Mr. Kitchin at the present time.

had fair ability and a good character. Particularly would this be ridiculous if the majority of the directors believed in electrifying the road and this officer of long standing and good character opposed it.

Yet this is paralleled by the situation in Congress. The majority of the members of the House are in favor of national defense. Mr. Kitchin is opposed to it. This is the first great question that is before Congress. While this subject is being discussed Mr. Kitchin cannot lead the House. He cannot even follow. His

FINANCE

HERE is at present a remarkable buoyancy in the market for stocks and bonds, despite the predictions made when the war began that war would so frighten investors and so derange business that securities generally would lose much of their sale value. The war, by forcing governments to borrow, increases vastly the total of loans; and loans, under our modern system of banking, automatically become corresponding credits—in

other words, loans liberate capital; and when capital is easy to get, business is stimulated, prosperity abounds; and in the benign atmosphere of prosperity, confidence in investments naturally flourishes. This is the phenomenon that was observed by the historian Macaulay: namely, that Great Britain throve on debt-the bigger the national debt, the greater became the national prosperity.

In this connection, it is interesting to observe a device by which the British Government, in liberating large quantities of credit in the United States, has aided in maintaining the high price of stocks and bonds and has, besides, ingeniously contrived to make a profit on the transaction. Early in the war, British holders of American securities did dump them on the American market, and the prices of these securities dropped dangerously in consequence. The Argyll, it may be remembered, brought over millions of dollars' worth of them. But they are now no longer coming. What has happened is this:

The British Government's agents now go to the British investor who holds American railroad or industrial securities (they know who these investors are through income tax reports) and say to them:

"Let us have your securities, and we will give you in exchange British war loan bonds. You will make money on the transaction, because the war loan pays 5 per cent. interest, whereas your American investments yield you on an average only 41 per cent. At the end of two years you may trade your war bonds back for your American securities if you like."

As the security is greater and the interest higher, few British investors hesitate to accept the Government's offer. The Government accumulates American securities until it has, say, 50 million dollars' worth of them. It then sends them to the United States on a British warship and puts them up as collateral for loans from American bankers. These American bankers are perfectly willing to lend at 4 per cent. on giltedged American securities, especially since "call" loans now yield less than 2 per cent. A simple calculation shows that the British Government makes money on the transaction. It pays 5 per cent. interest to

the British investor and 4 per cent. to the American banker; total, 9 per cent. The American securities in its possession yield it 43 per cent. Thus it pays the difference, or 4 per cent., as the net cost of the money it borrows on these securities. But on all other money that it borrows on its bonds it pays 5 per cent. or more. Hence a saving of one half of one per cent. on this money. The plan is doubly economical because the loans are made directly from the bankers so that no underwriting fees are deducted as they are when bonds are sold to the public. Great Britain has borrowed at least 50 million dollars by this method, and it is believed in Wall Street that it will borrow very much more in the same way.

From the American point of view, this method has two virtues: first, it stops the sacrifice of American securities by British investors, and so tends to maintain the stable and high price of those securities; and, second, it liberates that much more credit, to stimulate American industry.

THE MADNESS FOR PEACE

M

ISS JANE ADDAMS conducted a most successful settlement house in Chicago and she became a national character. Then she left her special field and played a brief and not particularly glorious part in national politics. From this she went to a meddlesome and entirely ineffective peace mission. Her reputation for sound judgment and useful service is much damaged, and one of our cherished national characters is lost to its former high estate.

Nevertheless, with this plainly before him Mr. Henry Ford deserts the fields that are familiar to him to enter those he knows not of. As a maker of cheap automobiles Mr. Ford was one of the wonders of the world. His success as a manufacturer and his daring experiments in the solution of labor problems made him a national character. The country had just become fully cognizant and proud of Henry Ford when he, too, planned a private peace mission-and another of our idols is shattered! He advertises his limitations to the world with even more success than his product advertised his abilities.

War seems to produce a kind of madness not only in those who practice it but also in those who oppose it. Unfortunately for us this madness seems to have struck at least two of our most esteemed citizens.

Mr. Ford's idea of stopping war is the simple one of persuading the belligerents to lay down their arms at present. As paradoxical as it may seem, this is one of the best ways of insuring wars for the future, for if the war stopped now the German Government, which started the war, could make out a fair case to prove that starting a war is a profitable business. Up to the present time the German people have had every reason to believe this. Prussia and Austria started a little war against Denmark in 1864. The Germans were ready and the Danes were not, so Prussia and Austria got two very valuable provinces at small cost. Two years later Prussia carried out a short, cheap, and highly profitable military venture against Austria. Four years later Prussia engineered a similar undertaking against France. It was comparatively cheap and it, too, was highly profitable.

If the Teutonic allies could bring the present struggle to a successful close now before the expense of the undertaking becomes prohibitive, they would furnish conclusive proof that planning and fighting wars is a profitable national industry.

Mr. Ford has unwittingly set out with the best motives in the world to do his little part to help the Germans in this undertaking.

Most of the rest of the civilized world is doing its best to demonstrate to the Germans that starting war is a losing business, and incidentally that it does not pay to indulge in emperors with inordinate ambition and a privileged military caste.

The case of civilization can be won only when the German people (and incidentally any others that may need convincing) are convinced that fighting for the world is not the way to get it. The cost of conducting this case is the most frightful account against mankind in all history, yet despite this it is better to finish the case at all hazards, now that it is begun, rather than give it up and have it tried anew at some future time.

But even if the case for civilization is proved and the Germans are convinced that making war (even if one does it better than any one else) is not profitable or wise, it does not follow that there will be no more wars. It means only that the particular menace of the Kaiser's belief in war and the German people's belief in the Kaiser is over. It might mean that the forces of democracy in other autocratic countries would be so strengthened as to make preparations for aggression harder and, therefore, war less likely.

But even if the whole world were democratized, history seems to indicate that there would still be wars, less calculated and cold-blooded perhaps, probably fewer and less far-reaching, but still almost certainly wars.

And because wars are almost certain to continue, it seems wise for us to keep fit so that we shall not be such a combination of riches and impotence, as France was in 1870, to encourage some piratical-minded nation to try making its fortune by attacking us. Mr. Kitchin, the new leader of the House, has intimated that he thinks that much of the desire for adequate defense is stirred up by the munition makers. Presumably they believe in preparedness not only because it is to their advantage to do so but also because they are in a position to know something about the subject. But the great wave of demand for national preparation is an honest expression of public opinion-more honest, perhaps, than are the majority of its opponents. If Mr. Kitchin will scrutinize the people who oppose preparedness he will find that a very large percentage of them are the pro-Germans who set Germany above the United States. Mr. Kitchin is in very bad company in which to raise the always more or less unprofitable question of the honesty of your opponent's motives.

work. That was his solution of the socalled Negro problem. His doctrine could well have been applied to many white people, but he never applied it to them. His business was helping the Negro and he minded his business. That was another of his chief characteristics.

He tried to teach the people of his race that if they lived decently and worked hard they would gradually overcome the handicaps under which they suffered. He warned them against the allurements of politics, of trying to gain enough political power to legislate themselves into positions which they could not hold. To those who demand social equality he answered that when the best Negro society was as advanced as the best white society there would be no incentive to mix the two; and that until that time it was obviously impossible.

His philosophy left every proper door of hope open to the Negro and yet asked for him no special favors. He did protest against unfair treatment, and his protests received more recognition than those of any other man of his race for the very reason that he asked that the Negro be given his due and did not ask for more than that.

His philosophy did not spend itself so much upon the rights of the Negro as upon his duties and opportunities.

The measure of the man's strength was that he could become the leader of his race upon so homely a programme as the doctrine of hard work and right living.

He was not liked by those Negroes who wished to achieve progress by the short cuts of agitation and legislation. He was not liked by white people who have never admitted that the Negro and the white man are different. But to the great majority of the sensible men of both races his doctrine appealed. They aided his efforts and they deeply regret his loss.

that only a short time previous a representative of one of the prominent banking houses had tried to interest him in the bonds of the principal public utility company in Bangor.

He had not bought the bonds, largely because of a long-standing preference for railroad securities and a feeling that in no other category of investment could he safely trust his own judgment of values. But he liked a bargain, and now he imagined he scented one.

He asked his broker to get a quotation on the Bangor utility bonds. The broker

called up the bankers who had brought out the issue originally. They appeared to They appeared to have heard of the fire, but that was about all. The quotation on the bonds, they said, was "98 bid, 99 asked." The broker tried elsewhere; but he found that no bargains were offered.

The manufacturer was surprised, but when he came to study precedent his surprise disappeared. He found that the great fires of Baltimore and San Francisco, for examples, had been followed by weakness in the stocks and junior bonds of local utilities, but that the bonds secured by strong, direct mortgages had been practically unaffected.

So favorably was he impressed with this information that he bought a number of the Bangor bonds, and has since become rather partial to utility issues, especially for the investment of personal funds.

The manufacturer told this story not long ago to a friend-a doctor who had asked him for advice about the use of some money that was coming to him from the settlement of a deceased relative's estate. The doctor was readily convinced of the soundness of his friend's advice to "put the money into good utilities for safety and ease of mind." But before trying to appraise the merits of particular offerings, he decided to follow up the lesson of the manufacturer's experience to see what else was worth knowing about such bonds as a class.

In a recent issue of the WORLD'S WORK, the doctor had seen a comparison of the relative stability and income possibilities of representative railroad and public utility bonds. He wrote to this magazine, therefore, to ask for further information which he needed to complete his research.

The comparison he had seen in the WORLD'S WORK showed that ten railroad bonds, yielding an average of about 4.60 per cent. (at the prices then prevailing), were more than two points below the high

prices of the current year, and more than seven points below the high for 1914; whereas ten public utility bonds, yielding an average of more than 5 per cent., were only about a point below the high prices for the current year, and one and a half points below the high prices for 1914. He wanted a similar record for a group of

representative industrial bonds; if possible, something to show the relative stability of utility and municipal bonds; and finally, figures to substantiate the assertion that utility securities as a class are less subject to the adverse influences periodically affecting domestic trade and industry.

A summary of the information given in reply to this inquiry is timely, because an increasing number of people have lately wanted to know where the utilities stand after a year of most unusual tests.

Taking the average prices of ten listed (and more or less active) industrial bonds, at dates corresponding to those in the preceding comparisons, it was found that they had fluctuated about four points both this year and last. The fluctuation in this class of bonds was thus considerably wider than the extreme fluctuation in the group of listed utilities. Nor was this compensated for by any advantage in yield, for the average for the industrial issues at prevailing prices was only about 4.75 per cent., against more than 5 per cent. for the utilities.

To show further the greater stability of public utility bonds, as compared with both railroad and municipal issues, the results of a study made by the Investment Bankers' Association's Committee on Public Service Corporations were taken. Two years ago, this committee had shown in its report that an investment of $1,500,000 in twenty-nine carefully selected utility bonds, purchased on a basis of $150,000 yearly from 1902 to 1911, could have been sold on July 1st of the latter year with the following result: