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At his office and library, he conferred day and night with the heads of all the banks, with the greatest private capitalists in the country, with the officials of the Government responsible for finance; and he personally made the policies, and put them into execution, which arrested the money crisis of 1907 and gave the business world a chance to get out of its troubles by a slow, if painful, process of liquidation of its resources.


It has often been said that this episode was the crown of Mr. Morgan's career; and perhaps he will be remembered more for this than for any other of his accomplishments. However that may be, it is agreed by all that no other man at that time could have assumed the financial leadership of the country as Mr. Morgan assumed it.

That panic made a policy which has been followed by the house of Morgan from that day to this. It seems to have shown a necessity for concentrated leadership of the banking world. Recognizing the fact that Mr. Morgan personally could not live forever, and that no other single man seemed likely to be able to fill his place, the Morgan house set to work so to concentrate the banking power of New York City that it would act as a unit in any great emergency, or on any great measure that might confront it. To that end, half a dozen of the largest banks and trust companies in the United States were brought either directly under the control of J. P. Morgan & Co., or into such close affiliation with that firm that they would undoubtedly act as a unit in any such emergency or task.

Thus was created that concentrated money power which has come to be popularly known as a money trust. It is hardly probable that it will be able to maintain itself hereafter in face of the loss of its leader and its presiding genius and in the face of a public clearly hostile to it. Be that as it may, the fact remains that here, without the usual corporate form and purely by virtue of his power, his wealth, and his integrity, Mr. Morgan created an aggregation of banking power

unequaled in the history of this country, though paralleled, possibly, in other lands. No other man in our financial history has left behind him so many tangible evidences of his creative power, or so many methods closely interwoven with the business life of a great nation. His death will probably lead to no sudden readjustment or disruption of any of the institutions or public functions with which he was connected. Yet the man is dead; and his power and personality in the business world cannot be passed down to syndicates, to firms, or to corporations. Therefore, the business world will suffer a great change.

The passing away of such leaders as Mr. Harriman and Mr. Morgan marks the end of an epoch; and the next era in American business life will be an era in which syndicates and organizations will be the most powerful agencies, and they will come under public control to a degree that would be simply incomprehensible to a man like Mr. Morgan.


For quite a time, Mr. Morgan had been practically a retired leader. He had taken little active part in the many activities and functions of the banking house which bears his name. Nevertheless, he remained to his death the undoubted leader of American business, so far as it is expressed in and represented by the operations of banking and finance. The confidence of the whole business community in the firm and in the great banks and trust companies which he had piled up around him since the panic of 1907 was based, to a striking extent, upon the confidence of that community in the integrity, courage, and ability of Mr. Morgan himself.

The continuance of that confidence depends hereafter not upon the power and prestige of a man but upon the acts and continuous policies of a firm and of a group of banks and bankers who have hitherto been held together and made one, as it were, by the name and association of Mr. Morgan. There is little doubt. that there will be in the financial community a shifting and moving about of

various men and various interests, such as followed the removal of Mr. Harriman from the railroad world. There may be, and there probably will be, personal ambitions developed within the Morgan groups which may find themselves too much hampered and restricted by the community of interest in which they dwell and which may seek new alliances or try to carve out individual destinies for themselves to the eventual disruption of their own power.

In spite of the constructive work and the masterful leadership of Mr. Morgan and of his great deeds in the era that we are now passing out of, a revision of the currency and banking laws, if a wise revision be made, will prevent any other such career, even if another such strong personality were to arise. The possession of such great power or the possibility or the possibility of its possession does not fit into the American scheme of life or business. Mr. Morgan's strict integrity, by the financial code of his time, and the confidence that this integrity inspired brought finance a very, very long way forward and upward from the era of Jay Gould. But the concentration of credit which was in some respects a fortunate result of his integrity, under our present bad financial laws, would in itself again be improper and immoral. Thus ends a financial dynasty and an economic epoch.



HE public has already begun to pay millions of dollars to repair railroad bridges and tracks and telephone lines that were washed away by the recent floods. Counties and townships are at work repairing roads; cities and towns are cleaning up their débris, counting their losses, and looking over the cost of emergency relief work. Factories and stores are counting the cost of damaged plants and ruined goods, and individuals are trying to rehabilitate wrecked homes and washed-out farms; and all this has to be done in the face of a month's interruption of business. Last year it was in the lower Mississippi Valley. This year it is in the Ohio Valley. Both

catastrophes are but reminders of other floods of the past and prophecies of those floods that are sure to come.

Probably the greatest task in the physical upbuilding of the Nation is the proper use of the rain and snow that falls in the Mississippi drainage basin and the safe guiding of that water to the sea.

If the Mississippi River and its tributaries, were once effectively controlled, the saving in flood damage alone would much more than pay the interest on any conceivable sum that could be spent on the controlling works, for every year the infinitely powerful streams of the Mississippi Valley run wild somewhere, usually in many places. So common is this that it is not "news" unless the catastrophe is tremendous and dramatic. Merely the negative advantage of escaping the damage from flood calls aloud for the control of the river.

But this is not the greatest of its advantages. There are vast undeveloped regions of rich lands, unborn towns, and non-existent centres of trade that would be flourishing, helpful units if it were not for the fear of the river. For men and money do not settle and build homes and industries within the probable reach of unbridled waters.

How much the Ohio, the Missouri, and the Mississippi can be economically used for transportation is an unsettled point. As they flow now, building bars of débris, cutting their banks, flooding the countryside at highwater and running low in droughts, they are less and less useful. Kept within their banks, relieved of some of their débris, and with a more even flow, they would at least have a better chance of regaining their old usefulness as common carriers.

Above the fall line of the rivers, where the possibilities of navigation usually cease, the sites for water power development are found. For this use, also, an even flow is one of the greatest assets.

The control of the great river means an incalculable increase in wealth to the Nation. The United States Engineer Corps and the river commissions have brought the lower river under partial control. By the Eads jetties and related works the passes at its mouth have been

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Whenever a new piece of land is drained and reclaimed (as is being done in Arkansas) some other section is forced to receive the extra pressure of the river. And these intimate inter-relations go back up from the Mississippi where it empties into the Gulf to the veriest little streamlet that begins in a plowed field on the western slopes of the Appalachians or in the forests. on the eastern slopes of the Rockies.

There have probably always been floods in this country, but the cutting of the forests and the careless tillage of the soil



A silt-carrying river when flowing fast acts like a great file, scouring out its bottom and cutting its banks. The lower Mississippi is gradually building its bottom up higher and higher during the months of sluggish flow, so that the levees have to be built higher and higher to control the water at flood time. If straightened and confined enough to accelerate its flow sufficiently to keep it from building up its bottom during the low stages, it would be too powerful for any kind of control during its high stages. The vast sections that used to be overflowed took enough water to relieve the pressure elsewhere.

have increased their size and frequency. Nearly all the rain that falls, as explained by Professor T. W. Chamberlain, of Chicago, should go into the soil and thence into the underdrainage, coming out slowly and steadily by seepage and by springs into the streams clear and pure. Being fed thus fairly uniformly, these streams should be the least destructive and the most adaptable for power and navigation, and these virtues would be felt all the way from their small sources to the Gulf. But where the rain falls upon denuded forest slopes, or upon farm land left in such condition that it will not absorb the rain

fall, it does not seep in but rushes away as foul erosive floods on the surface, wasting soil and plant food, gullying the surface, flooding the valleys, silting the pools, washing away reservoirs and dams, barring the streams, and carrying its multifarious influences of destruction through the long course to the ocean.

The most obvious method of control, the building of levees, we already practise on a tremendous scale, but not on a scale commensurate with our needs, nor upon a comprehensive enough plan; the building of storage reservoirs to catch flood waters is still chiefly in the plan stage; forestry and proper tillage are still, in spite of the progress of the last few years, generally unobserved.

The proper control of this one great drainage system, beginning in the forests and on the farms, including storage reservoirs, power plants, dredging, levees, and revetments, and extending through nearly half the states of the Union - this is probably the most pressing physical problem confronting the Nation. The political difficulty is to keep the vast engineering problem out of politics, as the construction of the Panama Canal has been kept out, only it is a much harder task. Panama is not in any Congressional district.

There is no local interest to bring pressure in favor of one particular scheme or another. In the great interior basin are thousands of local interests which, if permitted to do so, would wreck any comprehensive scheme to treat the problem as a whole. The question comes also of who should pay the bills, the National Government, the states, or the smaller units of government; or, if they share the expense, in what ratio should they share it. The problem of the Mississippi is the problem of the other drainage systems of the country, but they are, of course, on a much smaller scale. If it can be successfully solved they can be handled also. To formulate a plan comprehensive enough to solve this great problem in its engineering, political, and financial aspects is a task worthy of any administration of economic statesmen. It is an imperative duty before the Nation, the next great task of conservation.



URTHER facts concerning the vast possibilities for trade that open in South America to the manufacturers and exporters of the United States appear in an analysis of "Latin American Foreign Trade in 1911" in a recent bulletin of the Pan-American Union. The total imports of the ten South American republics during 1911 were valued at $893,000,000. Nearly $130,000,000 worth of these imports came from the United States. But Great Britain supplied more than $261,000,000 worth of them, and Germany more than $165,000,000. France sent only about $78,000,000.

But when the net value of the goods sold to South America is figured, the United States probably makes the poorest showing of all. The reason is that the goods sent by this country are mostly raw materials or goods upon which the work of fabrication was so slight that their value was little increased by the skilled labor of American artisans. The goods from the other countries, however - and especially the imports from France the imports from France - were generally much more highly finished products, upon which the French people made not only the profit from the sale of raw materials but a larger profit from the application of brains, mechanical skill, and organized manufacturing industry. In other words, France and Germany and Great Britain made several profits upon every dollar's worth of goods against only one profit upon the American goods.

Nevertheless, American manufacturers are making headway in South America — especially manufacturers of farm implements, of windmills, of electrical supplies, and of railroad equipment. These products have been pushed successfully because they are manufactured by corporations of such gigantic size that they can overcome the great disadvantages of imperfect banking facilities and of the general lack of American salesmen who are trained in the languages and trade customs of the South. The United States should find in South America for many years to come a sufficient outlet for the products of the new era of export trade.

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RESIDENT WILSON will have no "dollar diplomacy" in China nor, inferentially, elsewhere. "Dollar diplomacy" meant the promise by the Government to use force, if need be, to collect the loan that American citizens would make to the Chinese Government, as the principal European governments were to use force, if need be, to collect loans made by their citizens. On these conditions money was to be lent to China. The whole plan, so far as we are concerned, originated with the preceding Administration, which asked American bankers to enter the syndicate. It did not originate with the bankers.

As an American policy, the plan would never bear analysis. For it meant first our prescribing the kind of taxes the Chinese Government should levy, and secondly, it meant the putting of our navy and army at the service of American bankers, if they should need it, for the collection of their debts in a word, to help them do their business safely. To state the case in this way is to make its impropriety obvious.

Yet as the policy of dollar diplomacy arose it was not so simple as this statement makes it appear. China needs money. It must borrow it from the great bankers of Europe. The great bankers of Europe know the land-hunger of their governments. The partition of China was an old dream that came near coming true a dozen years ago. May it not come true yet? No great European Power is willing for the other European Powers to gain a possible advantage in China to its exclusion. If one should guarantee a loan made by its citizens, the others would follow. Well, then, if the Powers of Europe are to have this hold on China, does not our hope of influence and of trade require that we should be in the "deal?"

This is plausible and insidious reasoning. We do not want Chinese territory. As for trade, it does not follow a loan, at least till after foreclosure. American bankers may make loans where they will. the American Government, that is. the

American people, cannot guarantee their collection, whatever other governments may guarantee to do.

Apply this same policy to Central America. If we guarantee American loans to those governments, we thereby guarantee also European loans to them. For we will not permit any European government to seize American territory; and, if we use force to collect debts due to our citizens, we must either permit other governments the same privilege or else collect their debts ourselves.

This incident admirably illustrates the difference between the conception of government as an ally of business and the conception of it as an agency of order and justice, "of the people, by the people, and for the people." The conception of it as an ally of business that is, of one class of men has had expression and exemplification in many ways for a long time in so many ways and for so long a time that it has become warp and woof of the thought of a large part of the American people. It is a fundamentally erroneous view of a republican government, apply it how you will, whether by protective. tariffs or by river-and-harbor bills or by any form of special legislation.

President Wilson is to be congratulated on having had presented to him so soon an opportunity to apply his conception of our Government's proper functions.


HE little postmasters, as other little public servants, cause much more trouble than they are worth. Mr. Taft put the whole army of the fourthclass in the classified service — a suspicious action, as the spoilsmen regarded it, because this fixed Republicans in office. But the Democratic Administration has met this situation very wisely. Let so many of them, it says, as can stand a fair civil service test remain; but let all be put to the test. That's fair. Several thousands of them have resigned because their offices were not worth the trouble standing an examination. These } at the first mention of merit, places are made vacant witho

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