Business of a Bank

January 1, 2011 By Leave a Comment

A bank’s success is due to the success of the community it serves. A bank’s willingness to help may be in its own interests primarily, but, whatever the motive, this help benefits the customer just the same. And the services a bank can render are manifold.

First of all, a bank is the safest depository for money, for cash in the form of bills and currency. A bank’s safe-deposit vault is a larger and stronger place for cash than anything the ordinary individual can afford to maintain. This is protection against fire as well as against robbery, and how many times are bank burglaries successful as compared with those in private residences or offices? No doubt there still exist some people who keep money in stockings, old teapots, or tucked away in bureau drawers, but these people are running big risks which might be almost entirely eliminated if they would avail themselves of the facilities offered free of charge by banks.

When money is placed in a bank, the depositor is thereupon entitled to draw against his account by means of checks. Payment by check is of inestimable benefit to the depositor, for it does away with the expense and inconvenience of paying by cash, and avoids the risks of loss or theft which are always present when cash is carried on the person or kept in the house. A bank makes no charge for this service, and, further, a bank almost always allows a depositor interest on his checking account, the usual condition being that he keep a minimum balance-that is, not allow the amount of money he has on deposit to fall below a certain agreed amount.

A depositor may also call upon his bank to collect checks for him that are drawn on other banks, and usually no charge is made for this service, which is a real one. For instance, if John Doe presents a check at his bank in New York drawn to his order by Richard Roe on a Chicago bank, the New York bank will collect the money from the bank in Chicago and credit it to Mr. Doe’s account. This is another service of great convenience to the depositor, and, like many of the other services rendered by banks, has become so commonplace that it is taken pretty much for granted and its full worth not always appreciated. If a man has a sum of money he knows he will not need for several months, he can arrange with his bank to deposit the money there; the bank will give him an instrument known as a Certificate of Deposit and agree to pay him a certain percentage for the use of his money for the duration of the time fixed upon. This is a very simple method of making a short-term investment, and, although the rate of interest paid is customarily low, it is far better to keep money working all the time, even if the return is low, than to let it be idle.

It is easier for a man to obtain a loan at a bank if he has an account there than is the case otherwise. A bank usually considers itself under certain obligations to its depositors, not only in the matter of making loans, but so far as terms are concerned. If a man is a stranger, a bank naturally requires security for any loan it may make him-stocks, bonds, mortgages, or other tangible property. In the case of a depositor, however, the bank is familiar with his affairs, knows his financial standing, and very possibly will consider his note ample security. In times of financial stress the loaning function of a bank is of most value to a depositor, for at such times banks will not customarily accommodate any one other than their own depositors. And often a ready loan may mean the difference between bankruptcy and solvency.

Bank deposits are repayable upon demand. That is to say, a depositor may withdraw the full amount of his deposit whenever he desires, and he may do this either by means of a check to his own order or to the order of whomsoever he may desire. It naturally follows from this that any part of his account may also be withdrawn upon demand. In other words, he may draw against his account in any amount or amounts up to the total sum deposited, and unless the bank pays these sums it lays itself open to a suit for damages.

In the modern business world the emphasis is continually upon short cuts and simplification. The practice of sending receipted bills is growing in dis-favor, and here a checking account is very handy. A check sent in payment of a bill must be endorsed-that is, signed-on its back by the person or firm to whom it is made payable, so that when the check is returned from the bank it is itself a valid receipt. Further, the person who draws the check may make a note on its face of the item being paid, and when this is done the check is a complete record of the transaction.

Bond coupons may be deposited in your bank and the bank will collect them for you and place the proceeds to the credit of your account. Many banks sell steamship tickets these days; travelers’ checks may be obtained at banks: banks will give advice and help on the income tax; they will act as brokers for the purchase and sale of securities. Many banks have trust departments for the administration and handling of estates. In fine, their business is so varied that in one short article it is impossible to do more than sketch the vague outlines.

For our purpose, however, perhaps the most important business of a bank is the service it can render investors. It is the duty of a banker to keep informed on this subject, and his knowledge and experience are always at the disposal of his depositors. A bank will not only buy and sell securities for you, but it will obtain information about investments, about the standing and reliability of brokers and investment concerns, and about business concerns as well. If you live in Richmond and want to and out about a firm in Cleveland, your bank will write to a bank in Cleveland and obtain the information you want. Banks are conducted so as to render service, and a man is foolish who does not avail himself of its facilities. Never hesitate to appeal to your banker for help and advice on all matters pertaining to investments. Remember, that is the business of a bank.

Source: The Outlook, 11 Oct 1922

Filed Under: Finance Tagged With: , ,

One Of Ours

December 31, 2010 By Leave a Comment

Miss Willa Cather’s “One of Ours” is centered on one person, Claude, the fine and lovable though not very articulate farm lad of Nebraska. As Dorothy Canfield puts it in a review of Miss Cather’s admirable book, it “is the whole purpose of the novel to make us see and feel and understand Claude and passionately long to open the doors to his living brothers all around us, imprisoned and baffled like Claude in a bare, neutral, machine-ridden world.”

The tone of the story is sympathetic rather than sarcastic, and the subsidiary characters are carefully built up, not merely sketched in. Moreover, we have here, as always in Miss Cather’s novels, the atmosphere and charm of outdoor life, realism touched with deep feeling for nature as well as man. Claude is unsatisfied rather than dissatisfied; his natural tendency toward expansion on the side of thoughtful idealism is hemmed in by his surroundings, by sordid necessities of heavy toil, by a facile and selfish brother, a jocose materialistic father, and finally a narrow, cold, and undomestic wife who insists on going to China to help the missionaries rather than care for home and husband.

The novel is, so to speak, broken apart in the middle by that which broke apart so many things-the World War. It is disappointing that Claude’s problems, so well set forth, should not be worked out to any conclusion. The war scenes are vivid; Claude’s experiences are in some respects singular and evidently based on authentic war knowledge, and the inevitable tragic end is moving. The two parts of the book are painfully disjoined; as Mr. Lewis has written of this book, Miss Cather might as well, so far as working out its theme is concerned, have pushed Claude down a well as have sent him to war.

There is a clear note of sincerity in all of Miss Cather’s writing. “My Antonia” remains her best book, but “One of Ours” is in impressionistic effect far above the average novel.

One of Ours. By Willa Cather. Alfred A. Knopf, New York. $2.50.

Source: The Outlook, 11 Oct 1922

Filed Under: Book Reviews Tagged With: ,

Platinum the Noblest of Metals – Part 2

December 30, 2010 By Leave a Comment

Platinum may be made into the hardest or the most ductile of metals. Combined with ten or twenty per cent of iridium it is the hardest. It is said that one cubic inch of platinum can be drawn to such fineness that a single web of the wire would extend twice around the earth! Platinum is one of the heaviest things in nature, being passed only by iridium, with which that metal is always associated, and by tungsten and molybdenum. Associated with platinum are nearly always found palladium, rhodium, and ruthenium, all precious metals, although the volume of platinum always predominates.

Platinum jewelry began to make its appearance about twenty-five or thirty years ago, when it was discovered that the color and luster of a diamond were materially improved when set in this white metal. As such settings grew in popular favor and as jewelers and refiners learned the art of handling platinum and of hardening it by an alloy of iridium, its use began to spread into the broader field of jewelry of all kinds and designs and into the manufacture of small ornaments and trinkets.

Platinum jewelry carries on its face a guaranty of genuineness and that it has been hand-wrought in that it cannot readily be cast, like gold. This gives it a mark of distinction, and there is no known metal which imparts the appearance of quality as well as platinum. It carries the stamp of “class” on its face. Platinum jewelry will retain its chaste and virgin look indefinitely and it does not oxidize or discolor, like gold, which will tarnish in time. With the proper admixture of iridium platinum forms a metal of such intense hardness and toughness that gossamer webs, scarcely visible to the naked eye, can be drawn from it and subjected to rough usage without serious injury. For this reason the most intricate designs may be carried out in jewelry by the use of an astonishingly small amount of platinum, which fact largely overcomes its high cost per weight.

The statement has frequently been made that the use of platinum in jewelry is a fad-a fad because it is high in price-and it has been pointed out that so long as it was cheap the beau monde had little use for it. This statement is vehemently denied by most jewelers. Almost with one voice they declare that the platinum fashion is here on its merits and not because the metal is rare or expensive, strongly asserting that it will stay and increase In popularity. One jeweler was heard to say when discussing the relative merits of the two “noble” metals: “Recall the parade of nurses in their spotless white gowns and hats as they marched down Fifth Avenue when the war was on; then visualize, if you can, the effect had all these women been gowned and hatted in yellow, and you will have the difference between platinum and gold.”

Among other uses to which platinum has been put in the past, it has served as a basis for money. It has also figured conspicuously as a base for counterfeit gold coins of various denominations and values in many lands. This was at times when the price was below that of the yellow metal. Some of these counterfeit coins are still extant in museums.

A hundred years ago rubles of platinum were coined and circulated in Russia, but when the intrinsic worth of the metal in the ruble became more valuable than the face value of the coin itself these pieces were gradually retired to the melting-pot.

In view of the varied uses to which platinum now lends itself, it is to be wondered at that the chemists and metallurgists of Europe were so slow in appreciating its value, for it was not until the eighteenth century that it seems to have attracted any attention. This was when de Ulloa visited what is now Colombia. Ages ago, so the archaeologists tell us, the aborigines of South America-the Incas and their predecessors-worked the metal into ornaments for their priests and kings. In the Museum of Natural History in New York there is a collection of platinum jewels and ornaments taken from tombs in Ecuador supposed to be not less than two thousand years old. But the art of working the metal was lost and not rediscovered till three hundred years after Pizarro’s time, and another hundred years elapsed before it was recognized as having unusual qualities, and not until the World War descended upon us did scientists become fully acquainted with it.

What is the future of this remarkable metal? Nobody has any exact knowledge of what is going on inside the domain of Lenine and Trotsky. There may, and there may not, be large quantities of platinum stored in that country awaiting a favorable opportunity to strengthen its position with the outside world by using it as a trading base; in deed, it has been recently stated on a semblance of authority that Soviet Russia is about to begin again the coinage of platinum rubles and to adopt that metal as its money standard. The fact remains, however, that the world produces to-day but about twenty per cent of the platinum of pre-war times, and it is pointed out that under the best of conditions Russia cannot again enter the field in a large way for several years -indeed, it was well known even before the war that the existing Ural deposits were becoming depleted.

So long as fashion demands platinum and until some adequate substitute is discovered for its use in the arts a supply must be found “somewhere,” and the situation clearly points to Colombia-known before the war to be the second largest producer, now the largest.

Source: The Outlook, 11 Oct 1922

Filed Under: Mining Tagged With: , , ,

Development of the St Lawrence Valley – Part 2

December 29, 2010 By Leave a Comment

By reason of the shorter and cheaper haul down the St. Lawrence there was a greater volume of grain shipped out of Montreal last season than the combined grain shipments out of all other Atlantic ports.

The locks of the New Welland Canal, now being constructed and well advanced towards completion, are seven in number and capable of locking vessels of very much greater capacity than the present lake vessels of 15,000 tons over the difference of elevation of 330 feet between Lake Erie and Lake Ontario at Niagara Palls. When this canal becomes operative, there will remain but 110 miles separating the deep-water navigation of the lakes from ocean navigation at Montreal. Within this distance there remains to be enlarged and deepened from fourteen feet to thirty feet but 45 miles of canal, a simple and straightforward process along lines familiar to engineers on the St. Lawrence for more than one generation. This undertaking, in its engineering features and in the volume of excavation, when compared to that of Panama, is a minor project. The average width of the Panama Canal is three times as great, and some of the cuts, as in excavating through the continental divide at Culebra, are more than 300 feet deep. New York is about one thousand miles south of Central Europe, our main foreign market. The St. Lawrence River and Gulf are in the direction of the shortest possible sea lane to Central Europe.

The average rate of travel of an ocean or lake freighter is 250 miles a day. The average travel of a freight car is 30 miles a day. The average cost of ocean freights is but one-tenth of the charge for rail haul. The rates of freighting the bulk cargoes, for which lake vessels are especially designed, are less than seventy per cent of the cost of ocean carriage.

In modern water carriage size means cheapness, the transport of a given weight of cargo in a single vessel being cheaper than in two vessels of half the size. The concentration of carrying power affects economies in officers and crews, their wages, provisions, and accommodation space, and size makes for economy in ship-building. If two steamers of 2,500 tons each were to cost for both, say, $500,000, one vessel of 6,000 tons could be built for that price, and for double of the cost of a 6,000-ton vessel a 14,000-ton to 15,000-ton vessel could be built.

It is the navigable depths of channels that is the controlling factor in the employment of the most economical and efficient vessels.

The market will always select the cheapest route for trade; the ports themselves are but the points of collection and distribution of the markets or industrial centers, and their position is determined by this economic relation.

There are but two States having ports on the lakes and on the Atlantic: New York, though not a great producer of raw materials, is the greatest manufacturing State in the Union; and Pennsylvania, the second in volume of manufactures, whose main industry is the conversion of the iron ore of Lake Superior into steel, made commercially practicable by the economies of water carriage. Montreal is the head of ocean navigation on the St. Lawrence and is the Canadian metropolis.

New York is the greatest port in America, and is the port of distribution for more than half of the sea-borne commerce of the United States; Montreal is the second port in America. These two ports are the main points for the collection and distribution abroad of the products from the region of the Great Lakes.

In the fall of 1919 the Canadian Government accepted the invitation of the United States Government to undertake a joint investigation of the improvement of the St. Lawrence River with a view to the development of a channel way that would afford through passageway for ocean-going vessels from the Atlantic to the Great Lakes. An international joint commission was formed and engineers appointed to investigate and to formulate plans and estimate the cost of an international development of the St. Lawrence. The plans and estimates have been made.

Two hundred and seventy million dollars is the estimated cost of a thirty-foot channel way from Lake Ontario to ocean navigation at Montreal, a distance of 182 miles, and the development of 1,500,000 hydroelectric horse-power at the Longue Saulte Rapids.

From the head of the Galops, the first rapid on the St. Lawrence, to Montreal is about 110 miles; the proposed works are virtually all within this distance. The general scheme is, starting from Montreal and going up the river, to deepen the present Lachine Canal with some variation from the present line. This canal is 81/2 miles long and passes the forty-five feet of drop in the Lachine Rapids.

From the head of these rapids Lake St. Louis runs eighteen miles to the entrance of the Soulanges Canal. This canal passes in the fourteen miles of its length the Cascades, Cedars, Split Rock, and Coteau Rapids; the difference in elevation over this series of rapids is 84 feet, and it has the greatest potential horse-power on the river. It is proposed to build an entirely new canal past these rapids.

The foregoing data on shipping are from the Encyclopedia Britannica.

Lake St. Francis runs from the head of these rapids to the foot of the Cornwall Canal, a distance of 30 miles. The Cornwall Canal is 11 miles long and passes the 48 feet of drop in the Longue Saulte. It is proposed to develop about 1,500,000 horse-power through the construction of great dams at and above these rapids. These dams will back the water of the river up for about twenty miles to the Rapide Plat, where it is proposed to build another series of great dams, to back the river up above it to about the level of Lake Ontario, and to serve as regulating works to govern the level of that lake.

The impression in the public mind is that this international power and navigation development will flood out all the rapids of the river and leave great placid pools between the dams. This is far from the conditions that will obtain. The main rapids of the St. Lawrence are the Lachine, the Coteau-Cascade series, and the Longue Saulte; the proposed development will not lessen the turbulence of these rapids or shorten the length of canals required, about 34 miles, to carry navigation past these rapids. The effect will be to drown out the two minor rapids, the Rapide Plat and the Galops, and the canals around them and to develop 1,500,000 horsepower.

If the present canals were deepened to 30 feet and no dams built or power developed, the cost would probably be less than half of that of the more elaborate scheme with its great struc-tures and the great cost of their installation.

The urgent need is a means of transporting the great volume of Western products to the markets of the world and the substitution of the economies of water carriage for the tenfold cost of transportation by rail.

The development of water power is not an urgent need in Canada. There is more water power available on the St. Lawrence, the Ottawa, and from the runoff of the Laurentians than there are industries to use it; the population is less than ten per cent of the population of the United States.

In connection with the negotiation relative to a treaty governing the international aspect of the proposed deep waterway and power development, the Canadian Government, in response to a communication from the Secretary of State, replied: “It would not appear to be expedient to deal with the matter at the present time.”

The proponents of the project state that the present high cost of transportation of Western products is an avoidable and unnecessary tax and bounty exacted from the producer.

The opponents of the project state that the whole scheme is chimerical and impracticable by reason of the short season of navigation, ice in the Gulf, and fog, and that the cost will run into prohibitive figures; and they also put forward other deep-water way projects that will maintain commerce in its present channels.

The climatic conditions pertaining to the lower St. Lawrence are not more severe than the conditions about Lake Superior, where over 100,000,000 tons are passed through the Saulte Ste. Marie Canal each season; when the St. Lawrence deep-water way is developed, there will not be a more restricted or difficult section for navigation on the route than the present passageway between Lake Superior and Lake Huron. Any climatic restrictions that would apply to the proposed deep-water way apply with equal force to the present conditions on the lakes and to the barge canals and to the port of Montreal-the second port in America in volume of tonnage.

It is to be expected that those ports or States whose present commerce and trade may be deranged or diverted by the proposed trade route will be strenuously opposed to the project, and the seemingly great economic advantages that will accrue to the country as a whole should be weighed against these disadvantages.

Source: The Outlook, 11 Oct 1922

Filed Under: Transport Tagged With: , ,

Platinum the Noblest of Metals – Part 1

December 28, 2010 By Leave a Comment

FOR centuries gold has stood for value. From the beginnings of history to the present time, with the exception of food, the glittering yellow metal has been more sought after than any commodity in the entire category of human desire. Wars have been fought for its possession; innumerable lives have been lost in its pursuit; honor has been sacrificed for it; and the lure is still as compelling as in the days of Solomon, Pizarro, or Bret Harte.

But platinum is worth more than five times as much as gold, although Solomon, Pizarro, and the California Forty-niners and Klondike-rushers knew it not. Indeed, nobody knew it, for its value was negligible until modern metallurgy and chemistry discovered its usefulness in the arts, till the war demonstrated it to be indispensable in the manufacture of modern munitions, and until fashion set its stamp of approval on this metal in competition with gold as a perfect setting for precious stones. In the young days of the New World gold-crazed Spaniards, gold-crazed Portuguese, Hollanders, and Englishmen embarked on expedition after expedition in search of the “Golden One.” Their heroism and hardihood almost beggars description. Tradition had it that, deep in the Andean mountains, was the “Golden City”-the seat of the opulent Peruvian Government of the Incas. Fantastic and romantic stories fanned the flame of the imaginative mind of the gold-crazed men who were ready and willing to believe anything of the incredible gold hoard of the famous mythical city-this El Dorado.

Although the “Golden City” was never found, the Spaniards obtained much gold, and they found platinum also. Not knowing what else to do with the latter. they threw it away, calling it a nuisance. For centuries natives and aliens who have washed out the sands of the Atrato, the San Juan, and other Colombian and Peruvian rivers for gold have thrown back the platinum as worthless. They, too, called it a nuisance.

The modern picture thrown upon the screen shows bands of explorers in the valleys and beds of the same rivers where once the Spaniards sought in vain for the source of all gold; but they are searching for platinum now, and the gold which is always found in connection with its associate is of secondary consequence. Other remote parts of the earth also are being intensively searched for platinum-Alaska; the beds of the rivers flowing into the Pacific in Oregon and northern California; in Borneo, Sumatra, Java, Tasmania, New South Wales, and Canada. But the laborious placer pan-washing methods of olden days have been supplanted and the precious metal is now mined by big steel dredges with immense buckets that scoop up the bottoms of the rivers known to contain platinum-virgin platinum nuggets that have been swept down from the “mother lode” that is “somewhere” up in the mountains. Unlike the case of gold, however, no “mother lode” of platinum has yet been found and worked.

What is it that started these big dredges at work digging up the bottoms of the Colombian and other rivers for platinum? It is this. The world’s supply is threatened. Russia, up to the beginning of the war, furnished ninety-five per cent of it from deposits in the beds of the rivers flowing down from the Ural Mountains. The war and the anarchy which followed closed this source of supply. Colombia came next as a producer of platinum, and big speculation turned its attention to this premier source.

A short generation has seen platinum emerge from the neglected class of metals of lesser value into the lime-light of prominence. One of the two “noblest of metals” it is now called by Dr. George F. Kunz, of Tiffany’s, who is an authority on the subject. It has supplanted its consort, gold, on the throne of popularity in some respects because of its high intrinsic value as a metal. Gold, however, for the mere reason of its being the money standard of the world will continue to dispute the aspirations of its new rival and will do so successfully so long as gold and money are inseparably associated.

A hundred years ago platinum was worth but half the present price of silver. By the beginning of the present century the price had advanced by very slow degrees to $14 an ounce, and it is within the last decade that it has reached the level of its associate, gold, in price-$20.67 an ounce. Since that time, however, its price advance has been spectacular, mounting as high as $170 an ounce during the war. At the present time it is worth about $115. The uses of platinum are innumerable. It is valuable in making sulphuric acid and is an essential in the manufacture of explosives-indeed, modern warfare would be impossible without a certain amount of this metal in making guns, nitrogen, pyrometers, and other war material. This is why Uncle Sam found it necessary to call upon his patriotic citizens during the war to turn in their platinum jewelry and other ornaments -a call to which enthusiastic response was made. Lightning-rod tips are made of platinum, and for the coloring of pottery and in the manufacture of certain photographic papers and for the preservation of standards of measurements it is the only metal usable and reliable. In the archives of France there is a carefully guarded standard meter preserved in a bar of platinum. A meter is just one-ten-millionth part of the earth’s quadrant measured at the equator, and its determination was made with the greatest of care by Don Antonio de Ulloa in Ecuador early in the eighteenth century. The meter, according to this standard, is that universally adopted. It matters not, so the story goes, that it has long since been found out that senor de Ulloa made a mistake in his calculations-his meter stands, just the same.

Source: The Outlook, 11 Oct 1922

Filed Under: Mining Tagged With: , , ,

WU PEI-FU A Single Minded Chinese

December 27, 2010 By Leave a Comment

CHINA’S GREATEST SOLDIER, WHO NEVERTHELESS BELIEVES IN REUNION OF HIS COUNTRY BY TALKING RATHER THAN FIGHTING

SOMETHING is known outside of China of Chang Tso-lin, variously called the “Satrap of Manchuria,’ “First War Lord of China,” and Super-Tuchun, but little has been heard about Wu Pei-fu, the chief obstacle to Chang Tso-lin’s ambition to control China south of the Great Wall.

Two years ago thousands of students from middle schools, colleges, and universities throughout China converted agitation into action and flocked to the camp of Wu Pei-fu to enlist in the almost holy crusade against the Anfu clique traitors who were selling their country’s sovereignty to Japan. Wu, then a division commander unknown outside of military circles, suddenly sprang into prominence in the summer of 1920, when he executed a strategic withdrawal from Hunan, whither he had been sent to conquer the “rebellious South.”

By what foreign military attaches pronounced to be the most brilliant military tactics ever executed by a Chinese general, Wu sent the opposing forces rolling back against Peking, defeated, disorganized, and fighting each other. Wu Pei-fu’s well-disciplined force by slow and careful stages made its way to Peking, disarmed the defeated troops, and relieved the capital, which was ready to do him honor. Then Chang Tso-lin, ex-bandit and uncrowned King of Manchuria, swooped down with his divisions, and, with a slur at “the subordinate military officer,” appropriated the fruits of Wu’s victory. At the same time he adopted the defeated soldiers into his own ranks. After all, Wu was but a division commander turned popular hero overnight. He had not the prestige nor the numbers to face the Manchurian war lord.

Wu withdrew with his loyal Third Division to the barracks built by Yuan Shih-kai, as the nucleus of his monarchical establishment, in the out-of-the-way loess hills of western Honan, there to bide his time.

Wu spent the autumn, winter, and spring training his model army. Visitors, among whom was American Minister Charles R. Crane, to his camp in Honanfu (or Loyang, the ancient capital of the Chow dynasty, 1000 B.C.), found him very hospitable-inclined to drink a bit to excess in honor of his guests-and very busy.

In the spring of 1921, through the agency of an American newspaper man, he discovered that a secret pact directed against him had been concluded between Tuchun Chen Shu-fan at Shensi, the province at his rear, and Chang Tso-lin of Mukden. He refused to submit to this threat, and, having made a public oath that this world was too small to hold both Chen and himself, began immediate operations against the Shensi Tuchun.

In the course of this action Wu despatched to Shensi his subordinate. Brigade Commander Feng Yu-hsiang, popularly known as the “Christian general.”

Feng is a man of the same ideals as Wu, and this demarcation of a distinct field of effort for Feng has ended the slight jealousy over popular idolism ex-isting between them, and has united them in a common purpose.

Wu had no sooner established his influence in northwest China than the call came to him to take a hand in the Middle Yangtze situation. Hupeh, the most important province of central China and the one which contains the three “Wuhan” cities (Hankow, Wuchang, and Hanyang) situated at the confluence of the Yangtze and Han Rivers, had suffered for four years under the misrule of Tuchun Wang Chan-yuan, the most reactionary of the militarists. His rule was characterized by extortion, opium trading, and every form of official corruption. Although all the Chinese armies were unpaid for months, Wang’s soldiers had even greater arrears due them than others.

Driven to desperation, and encouraged by a disaffected populace, his soldiers had repeatedly mutinied. In three of these mutinies foreign interests suffered heavily. Some Japanese lives were lost, and Japanese, British, and American consular and commercial property was destroyed.

Chang Tso-lin, fearing for the prestige of militarism, decreed that Wang should stay. Hupeh local leaders, however, bribed the military of the neighboring province, Hunan, to undertake an offensive against him.

Sun Yat-sen, whose Commander Chen Chung-ming had just added the province of Kweichow to his recent conquest of Kwangtung, immediately sent agents to Hunan in an attempt to enlarge the affair into a general Southern invasion of the North. The whole country was thrown into apprehension. The U. S. S. Albany and other foreign cruisers and gunboats cleared for action and lay in the Yangtze off the foreign concessions. Every one was asking: “What will Wu, whose forces, lying half-way between Peking and Hankow, are the key to the situation, do?” At this critical moment and while Wu’s troops were moving southward along the railway, not knowing which side they would support upon arrival in Hupeh, the writer visited General Wu, who had calmly remained in his Loyang headquarters.

“My foremost aim in regard to the Hunan-Hupeh situation,” said General Wu Pei-fu to me, “is to prevent the interprovincial squabble from becoming a general war between the North and South. Aside from the resultant needless suffering which reoutbreak of strife of this nature would cause the Chinese people and the foreigners in our midst, no possible benefit therefrom could come to the nation. The ultimate reunion of the provinces would be postponed rather than hastened thereby. Not force, but the convocation of a people’s constitutional assembly, is the solution of the problem of reunification.”

It was thus apparent that Wu Pei-fu was interested in wider issues than the suzerainty of the Wuhan region. When Wang Chan-yuan fled, and the advancing Hunanese (and Szechuanese, who also thought to capitalize the situation) were repulsed by Wu’s merciless strategy (for, like all good generals, he is ruthless in war), Wu found himself in possession of China’s richest section. But this did not, as politicians and militarists in the North hoped, satisfy and occupy him. Leaving Hupeh in the control of a henchman, Hsiao Yao-nan, he returned to Honan and resumed the training of a model army.

When I visited him there, General Wu assured me that he remained as enthusiastic regarding the convocation of the constitutional assembly as at the close of his campaign against the Anfu Government. “The country cannot be fought together,” he said, using a forceful Chinese idiom. “This method has been tried in vain for eleven years, and promises no more success in the future than in the past. The only hope lies in talking it together.”

Yet General Wu is not unaware of the necessity of a powerful armed force to guarantee freedom of action to the delegates who do the talking, as well as to the people in their selection. “My suggestion was ignored last summer,” he said, “because at that time I lacked the military prestige to protect it from the attacks of selfish chieftains whose advantage lay in other directions.” The Vice-Inspecting-General inferred that, if his plans did not miscarry, his military prestige would soon be sufficient to warrant his undertaking the guardianship of his constitutional scheme.

“But what about the inevitable opposition from Manchuria?” I questioned. General Wu’s face took on a wistful look. “Everything I have been for,” he said, “Chang Tso-lin seems to have been against. Still,” his face brightened, “Manchuria is not vital to the life of China proper. If Chang Tso-lin must have his little kingdom, the Chinese Republic can for the time being do without the territory of the Three Eastern Provinces. And there is no reason why the Three Eastern Provinces should any longer dictate to us of China proper regarding our political changes, or why our political aspirations should lie at the mercy of the Fengtien lord.”

This policy clashed directly with the ambition of Chang Tso-lin, who, from his Manchurian seat, hoped to spread his dominion over the intramural provinces.

Wu Pei-fu is a man of one idea-of one scheme. It is founded upon the one bit of American history which he has studied carefully. That idea is the redrafting of the Constitution and the reunion of the nation through a national convention, such as that which sat at Philadelphia and created the American Nation in 1787. Wu Pei-fu is obsessed with the idea that a new national convention can produce as much improvement over the Nanking Provisional Constitution of 1911 as the Convention which created the United States and its constitution in 1787 produced over the Confederation of six years earlier. With this ambition for his country has undoubtedly become mixed a personal ambition bred by conceptions in Wu’s imagination as to the part he himself is to play in the new regime.

What comprise his motives and whether or not they lead in the direction of a constructive, or even definite, plan is of prime importance to the Chinese nation to-day, inasmuch as upon Wu now rests the burden of political action involving the territory south as well as north of the Yangtze.

Although a sympathetic understanding exists between Sun Yat-sen’s military commander. General Chen Chung-ming, and Wu Pei-fu, it will be seen that for the time being the theories of Wu Pei-fu are in direct conflict with those of Dr. Sun. The Cantonese agitator’s fundamental doctrine is that the Chinese revolution has never been completed; that the overthrow of the men who are the heirs of the Manchu autocracy must, and can, be accomplished only by violence. Wu Pei-fu’s position, on the other hand, is that violent methods can-not be decisive, and that the only hope is in a convocation of provincial leaders under the protection and, we might infer, spur of a benevolent military force. History seems to be with Sun Yat-sen.

China’s frequent past periods of disruption have been brought to their close not by talking but by the ruthless military conquest of one individual or faction. At least according to the records. But, knowing Chinese traits, we are prone to suspect that there was much compromise and palaver mixed with the fighting. In comparing the present with past periods of disruption we find also many new elements affecting the situation. It has often been said that the foreign settlements and Legations, providing oases for political- refugees, are the greatest obstacle in the way of political stability.

Foreign interests in China refuse to undergo the loss occasioned by prolonged internecine strife. Again, there are no definite lines along which an issue can be fought out. Wu Pei-fu may just as truly claim to be the exponent of progressivism as Sun Yat-sen-yet the two may easily find themselves in armed conflict. As Wu Pei-fu sees it, there are too many chieftains and too many factions to allow of “fighting the revolution out to its finish.” The only real issue upon which any chieftain or faction could push a pan-China campaign would be that of individual supremacy. And democracy in China, although still an infant in mind, is too strong in body to allow the career of the uncamouflaged conqueror to culminate. Yuan Shih-kai’s failure is conclusive evidence of this.

Under such circumstances, Wu Pei-fu is justified in his statement that the prospect of fighting China into unity is not hopeful. His trustfulness in palaver may appear ingenuous, but let him be given credit for maintaining some degree of faith in his country’s political future. There are too many Chinese who, when they turn occasional attention from private ambition to their nation’s predicament, are prone to shake their heads in utter helplessness, and, let it also be said, unhelpfulness.

General Wu, although uttering no word which might be interpreted as treason against Peking, has shown a true conception of the inconsequence of Peking in the life of the people of the provinces. If his suggestions of last year remain unchanged, his constitutional assembly would invite the recognition of the present de facto Government at Peking, but would not be discouraged by refusal. It would take upon itself the liberty of reshaping the entire administration of the nation, from the Constitution to the seat of Government. All present arrangements and precedents would simply be swept aside. Wu realizes that he would require a tremendous military prestige to enforce the decisions of such a conference. If his own views and the decisions of the assembly should coincide, the results might be really democratic in trend. If the assembly could agree, as the writer fears, only under coercion from him, the resultant Government would be a camouflaged military dictatorship. This is, indeed, the form of government which those familiar with inland China consider the most practical. That it would be far superior in progressivism and benevolence to the score of dictatorships existing in China to-day is undoubted. The danger is that it would contain within itself the seeds of re-disunion.

Strangely enough, the national assembly has been a favorite idea of Dr. Sun. Some discouragins experiences have, however, inclined the pioneer of republican ideas to rely upon the imposition of new ideas through military force. Paradoxically, Wu Pei-fu, a man of purely military antecedents, concludes that nothing decisive can be accomplished by military force, and turns with hope to the Chinese aptitude for discussion and compromise. In the opinion of the writer, Wu’s hope comes to this: If a group of men who can dominate their respective provinces can be brought together and protected in the course of their discussion from outside threat and in a measure from bribe, they should be able to determine the lines of some sort of interprovincial confederacy taking the place of a central government, and entrust to their powerful patron their execution and perpetuation.

The first requisite of a unified and peaceful China under this scheme must be the absolute prohibition of interprovincial alliance outside of the confederation and the abolition of nationally supported provincial armies. Wu Pei-fu has set the precedent for the immediate squelching of interprovincial strife. The plan, following the precedent of the selection of provincial delegates, would allow a great deal of freedom within the provinces themselves. The important thing is to get a hold upon those factors which can dominate in their respective provinces, whether for the time being they be democratic or not. If the dominating factor in a particular province be military, it must be accepted as the representative of that province in the confederation, being at the same time well curbed within the lines of its own province. When capitalistic or democratic elements within the province become able to overawe the military, they should succeed to the national representation. The fact that military power is curbed within provincial lines will militate against its downfall. There is hardly a Tuchun to-day who holds his position without the aid of outside-province troops. Again, a military chief dependent for revenues upon his own province will become gradually subservient to the powerful guilds and growing financial interests. General Wu realizes that he is working against time-that outside nations whose industries demand China’s natural resources will not indefinitely let China alone to work out her own salvation.

“Is the idea of foreign intervention virile?” he asked. “It is dormant, but will not remain so if China continues to disappoint the world,” I replied. “Then we must hasten,” the little General concluded.

That Wu Pei-fu will prove a positive factor in the establishment of stable and popular government in China is open to doubt. Although unquestionably the greatest soldier which his country has produced in modern times, he has little political and diplomatic ability.

It is of course well-nigh impossible for a leader in China to do anything for his country, and this is one reason why salvation must come through a general leavening of the people rather than through leadership. The Chinese people, possibly in part as a result of some thousands of years of disappointing experience, but more because of their intense individualism, do not want leadership. Nothing has been more evident in the past ten years of chaos in China than the tendency of the crowd to combine to lop off any head which gets itself above the others. Not only do the tactics of the rising figure’s political enemies force him into the traditional paths of Tuchunism, but the very attitude of the common people, who psychologically mistrust any lord of the ascendant and regard power as synonymous with corruptness, bears in the same direction. After all, the Tuchun is the product of his people.

Source: The Outlook, 11 Oct 1922

Filed Under: China Tagged With: , , , , ,

Political Skirmishes of the Middle West

December 26, 2010 By Leave a Comment

MISSOURI is politically still a raw State. Rural Missouri is honest and narrow, and I am told that Governor Hyde, who is a progressive Republican and ran on the Bull Moose ticket for Attorney-General in 1912, has had Satan’s own time with the farmers in seeking to provide even a reasonably adequate system of education for their own children. But they are learning.

The city politics of St. Louis and Kansas City is known of all men as disreputable and commercial. In no State of the Union, probably, is the poison squad, which deceives and lies to public opinion, so vigorous and successful. It seems sometimes, I am told, as if the people preferred to believe the worst of shining marks. The anti-machine fight in Kansas City, which proved unusually successful only yesteryear, has declined in vitality, and the sordid political commercialists are creeping back into power. The hope of the State is in progressive

Republicanism, which is reasonably strong. Old-Guard Republicanism is only another name for Bourbon Democracy. They help each other out. Those who think that the idealistic issue of the League of Nations played any particular part in the recent contest of Senator Reed for renomination in the Democratic primary would do well to bear the foregoing factors in mind.

Missouri is not at present a State to be violently moved by idealism, “super” or any other kind. At bottom it appears to be like most of this Middle Western country, unmoved by the League of Nations issue, pretty stolidly nationalistic and anxious to keep out of European embroilments. Probably that helped Reed, but it was not the issue. They like Reed in Missouri as a sporting proposition. He is a hard and brainy fighter, even though many call him unscrupulous. And the average plain Missnurian likes that. I fear that the Reed personality fits Missouri better than the President Wilson personality.

I have heard it much discussed in the East as to whether the Bourbon Republican vote helped Reed out in the primary. Of course the reader understands that some of these Western primaries are very free primaries into which the voter may go and line up with either party or any party. The opinion seems to be here that in St. Louis, for particular reasons, every effort was made by the Republican organization to keep their voters in line for the Republican part of the fight, but there appears to be no doubt that in the State at large many thousands of Republicans joined in renominating Reed-plenty of them to do the work. He actually won by only 6,000. And the serious and informed view here is that he will have much Republican support at the polls in November, and will probably win then.

In this country the League of Nations issue is thoroughly in eclipse. Except in spots, it appears that this is true of the whole United States, as completely true still as in the 1920 overwhelming election upon the issue. It certainly had little effect against Lodge in Massachusetts in the primary. It might be decisive at the general election in Massachusetts in a close fight, but in and of itself in Massachusetts it seems to have no vitality. In Nebraska, where United States Senator Hitchcock is running again on his record as a Wilson League supporter, the chances of the progressive Republican, Howell, are somewhat enhanced by the issue. Hitchcock, who is a shrewd politician and has made an able Senator, evidently senses it, as he has sought to counteract it by a clever and incisive speech recently in the Senate in which he denounced before the world the action of the French on the Rhine in employing savage Africans as armed forces and in setting up brothels for them. This propagandist antidote has been put to work in a multitude of German homes in Nebraska, although it is quite likely that it has come too late to be of effective political service. All the irreconcilables about the League-Reed, Johnson, Beveridge, La Follette-have come through with flying colors; on other issues, but their hostility to the League never flecked them, rather aided them.

The attitude of the Middle West on the tariff is interesting. They have not waked up to it yet at all. There is no mighty Dolliver to stir their hearts as the great Iowan did against the Payne-Aldrich Bill in 1909 and 1910. Furthermore, the tariff-makers in Washington have prepared in advance at least a temporary bulwark against a recurring Payne-Aldrich tragedy by high duties on lemons and almonds and wheat and other products dear to the heart and the pocketbook of the Western agriculturist. Besides, prices generally are so much higher on everything than they were in 1910 that the Western consumer seems numb to the addition of a mere tariff burden.

The wise ones have told me that they look for the Western consumer to wake up a little later on, if he begins to pay appreciably more for the things he buys. In the wheat country, for example in Kansas, the high tariff duty on wheat is a delusion. The world price of wheat in Liverpool is now so low that the cost of production in Kansas is higher than the Liverpool price. The State of Kansas is frankly worried about its underlying economic condition, which depends as certainly upon wheat as Cuba’s welfare depends upon sugar.

There is an agitation growing in Kansas for State-owned elevators, as in North Dakota. The great economic difficulty about wheat seems to be that under present conditions it has to be harvested and marketed within one hundred days. And the system of transportation and storage breaks down in the presence of so great a problem. Vast stores of wheat lie along the tracks at the stations, without cover, for days together exposed to the weather. These conditions contribute neither to sound quality nor to sound economic price. A counter-wail is going up from the Associated Industries, representing the employing interests, against the so-called Socialistic innovation, with North Dakota held up as a horrible example. But, strangely enough, many Kansas bankers and business men refuse to be stampeded by the display of the North Dakota bogie. They say, “Well, what are you going to do about it? Something must be done or the economic stability of Kansas is gone.”

I wonder if those are not right who refuse to foam at the mouth even at the radical experiments of North Dakota, and who say that it is a good thing that we have political laboratories in the Western States where experiments can be tried for the whole country and the mistakes of the original experiments provided against in the later imitation. Kansas may move in co-operative rather than in Socialistic directions in solving her problem, but, like North Dakota, she must get the thing done.

The reflective view of the Middle West is that some of the crucial rates in the current tariff bill are too high. The country doesn’t want to be flooded with low-cost German products and doesn’t intend to be. It has too great concern for the standard of living and the standard of advance of its own laboring population. The Middle West avers that it is no secret in Washington among the faithful who are supporting the bill that something was put over on them in the sugar and wool schedules, and some others, by the ruling leadership in Congress, and they are very sorry it happened on sugar and wool especially, be-cause they think it will soon show in every home after the measure gets into operation.

And the Middle West may be the first to kick the roof off. But not now. The Middle West doesn’t care three whoops about the tariff issue or the bonus issue or the ship subsidy issue. People here talk about strikes. These are much nearer to them and much more menacing. They are inclined to think that Washington has been wasting a lot of time on the other issues and was as slow as molasses in getting ready to do something about a greater matter. They share, I And, the parodied sentiments of the famed Lackawanna versifier:

How very slow, said Phoebe Snow, The coal negotiations go. Both words and might seem useless quite, When craniums are anthracite.

You may say that there is a measure of unreason in their attitude, and there undoubtedly is. The West has long combined reason and unreason in its political opinions, as everybody knows. But I am only writing of things as I find them. I am not weighing them in the balances of reason.

Kansas, of course, is in the throes of an experiment against strikes in the essential industries. This is so important that I think it worthy of a separate letter, but I may say here that the relations of the Kansas mines with the new Industrial Court were such that at least a fifty per cent production was kept up through all the period of the recent coal strike, and the railway situation in Kansas proper has been surer than in the surrounding States. One reason has been that the Topeka shops of the Santa Fe System were protected from the outset by the new Industrial Court Law; not by State troopers, but by previous experience with opposition to the provisions of the law itself. As go the Topeka shops, so goes the Santa Fe System. And the provisions of the new law with respect to picketing during strikes upon essential industries are such, and the pressure upon the local authorities under the law to preserve order is such, that, with Alexander Howat and five of his comrades at present in jail as an outstanding example, there was a freedom from intimidation and a freedom for strike-breakers to work which did not exist in the neighboring States or anywhere else in the Union. This may be a reason why the Santa Fe is not one of the roads in the West to come to terms with the striking shopmen under the Warfield agreement, but insists stalwartly upon the peace of unconditional surrender. There is much to be said on both sides about this compulsory experiment, and I will return to It in a later letter. It has its good and bad points, and is still distinctly in the laboratory stage.

But this I think can be said here. The Kansas agricultural population, which is the great majority element, is committed to the new law, and their belief in it will give the Republicans the victory in the fall campaign. If it were not for this issue, the unrest in Kansas might be as dangerous to the Republican party as the unrest in Michigan and Colorado. a point to accompany him on several of his hunting and fishing expeditions, which were taken not alone for pleasure but as health measures, for a change of air and the outdoor recreation.

On and off during those years also, when the family wanted a little change, they occupied “the little White House” of my brother’s at Lakewood. Cleveland liked its simplicity and because it was not unlike the parsonage at Caldwell, N. J., where he was born. Early in June, 1908, while the Clevelands were at Lakewood, the ex-President sent for my brother Isidor; he desired to have a talk with him. He seemed to wish to unburden his mind. This proved to be the last time he spoke to any one outside of his immediate family while still in the possession of all his faculties. That very night he had another attack of his malady, after which, as I was told, his faculties seemed to go under a cloud.

Two weeks later, on June 24, the country was shocked, though it was not unprepared, to learn that the ex-President had died that morning at his Princeton home.

On June 26 Grover Cleveland was laid to rest. The funeral was private; my brothers and I had received a note from Mrs. Cleveland asking us to be present. At his home we met about one hundred of his personal friends. It had been his express wish that there be no eulogy or funeral oration, and his friend. Dr. Henry van Dyke, conducted a simple service at which he read passages from Wordsworth’s “The Happy Warrior.” In a carriage with Chief Justice Fuller, Judge George Gray of Delaware, and Governor Fort of New Jersey, I accompanied the body to the cemetery. For him there were no longer enemies to traduce and vilify. Perhaps no President had ever been so reviled by a hostile press throughout the country as this great man, and, strong as he was, these attacks quite naturally pained him. Like all men who struggle against the tide for righteous things, appreciation is often deferred, sometimes until after death. In his case, happily, it came while he was yet among us in the constantly increasing manifestations – of admiration, love, and esteem by the people of the country.

Source: The Outlook, 11 Oct 1922

Filed Under: Politics Tagged With: , , , ,

Austria is Dying – Part 2

December 25, 2010 By Leave a Comment

Austria might last several months if the Government could pay its two hundred and sixty-odd thousand employees. It doesn’t seem able to print money fast enough to allow them to meet their living expenses.

Cost of living has gone up so that a taxi ride costs 50,000, a dinner 75,000, a pair of shoes 300,000 crowns. The Government issues index numbers on the cost of living and pays its employees accordingly. The increase of pay for September over August is estimated at one hundred and thirty-five per cent-for one month, mind you.

It is estimated also that the employees will each have to receive on the average about one and a half million crowns for the month of September.

Get out that pencil again and multiply two hundred and sixty thousand men by one and a half million crowns, and you will see how much new paper money must be printed just to provide the Government pay-roll for September-not to speak of the pay for Government supplies. Of course the Government receives taxes and other incomes, but they are a minor detail; they fall hopelessly behind the racing speed of expenditures.

Now comes the strangest part of the story. The people are better off than when I was there last March, and much better than a year ago last March. I took about three dozen pictures of the people in streets and in parks. They are all well dressed and look well fed. The theaters are crowded (I paid sixty-six cents for a seat)-the movies and restaurants also. I simply couldn’t get a seat at the Grand Opera.

Prices have gone up everywhere. When you take a taxi ride, you look at the meter and then multiply by 9,000. You’ve got to be quick at figures to live in Vienna.

A taxi ride costs nearly as much as in New York. Whenever the Government releases its control over prices, they go up to approximately gold values very soon.

Labor is better paid, but is still too low. The charge I made against Socialism and Labor Unionism a year and a half ago still stands. They have not taken care of labor. It is much worse off than in so-called capitalistic states like America, for instance. One reason the people are looking better is because they have cultivated on special ground allotments 80,000 gardens in the suburbs of Vienna. I saw the exhibition of the results in the City Hall. I was glad they had done so well, and sorry there were not other achievements to show for what Austria had been through.

I saw a good deal of firewood here and there inside and outside of Vienna, considerable coal also. I am told there is a fair supply of fats and meats for the winter.

If Italy could, by common consent, take over the government of Austria, stop the excess of expenditures, circulate Italian money, and discharge fully half of the public employees, the country would soon get on its feet. We would hear nothing more about their “terrible suffering.” The suffering has been real enough among those who had bank savings accounts, and old peopje living on incomes and rents. They found them-selves absolute paupers. Naturally, the bulk of these cases have been adjusted, some by death, some by work, and some by relief and by relatives.

If some political change is not made very soon (say in three months), Vienna will, I am afraid, be a howling mob because of confusion and political paralysis. This may be delayed by some loans to quicken the body of the almost dead government. Loans from England, France, and Italy are always imminent, and the League of Nations is gravely reconsidering Austria’s dilemma, as it sits in Geneva.

When McKinley was President, the question, “Shall we build a canal at Panama?” was much discussed. Mr. Dooley, writing an Annual Presidential Message for McKinley to send to Congress, said under the heading “Panemaw Canal:” “Something must be done about the Panemaw Canal, but what the divil it is I don’t know.”

I think the League of Nations feels the same way about Austria; something must be done, but what the divil it is they don’t know.

This article would be defective if I didn’t try to explain why Austria has lasted as long as this and why there is so much ease and comfort in spite of the financial ruin.

(1) The exports of merchandise have been considerable and balance a part of the imports of food, perhaps all the necessary food, because champagnes, liqueurs, silks, and furs have also been imported and sold to Austrians.

(2) Much good money has come into Austria for paintings, antiques, porcelains, etc.-all articles of real value if not art treasures.

Much of the former belongings of Archdukes Ferdinand and Ludwig Victor have been sold-perhaps a million dollars’ worth. The art stores always report a good foreign business, and there are hundreds of them.

(3) The American Relief has brought in about fifty million dollars of supplies and cash.

(4) It is reasonable to suppose that the Catholic Church has sent in large sums to assist Austria, which, until the Armistice, was the leading Catholic nation of the world.

(5) Austrians in foreign countries, America, England, and elsewhere, have sent, in the aggregate, huge sums to their relatives in Austria, and bought crowns on speculation.

(6) Foreign buying of Austrian industries, such as the Stinnes purchase of the leading steel industry of Austria, which is reported to be running prosperously.

(7) The ownership by Austrian capitalists of paying properties in Czechoslovakia, Hungary, and elsewhere has brought into Vienna a fairly steady flow of good money. It must be remembered that Vienna was the financial and banking center of Southern Europe before the War. Vast properties are still held outside of Austria.

(8) Space will not permit a further listing of the many supplies that have helped to take care of Austria; but the chief bladder that has kept them from sinking has been the use of the paper money issued all along as needed. Like a bladder, it will not support anything very long, but has great temporary possibilities. It has been a medium of exchange and has always represented some gold value, even as it does to-day. If Austria had been entirely self-supporting, no one can say how long she might have functioned on her paper currency.

It is my belief that the above-listed outside helps have kept her going, and account for the evidences of widespread comfort and even luxury. Most of these helps have been temporary, and they are, in any event, too uncertain to support a political state.

I found out why the trains are so crowded in Austria. A citizen of Vienna told me he and his wife had just returned from Germany, where they had been shopping. They bought linen, underwear, woolen goods, etc., at less than half what they paid in Vienna. Being Austrians, they were taxed only six per cent to export their purchases from Germany. I asked him how much his round-trip ticket cost him (a twenty-hour ride in an express train, third-class). He said. Thirty cents! You see, Austrian Socialists planned that cheap fare for the benefit and en-joyment of the Austrians, little thinking that it would be used by Austrians to make purchases in foreign countries, to the serious disadvantage of Austria. Successful statesmanship consists partly in thinking ahead. As I said in the beginning, it takes a great people to be self-governing, and the Austrians are not a great people.

With no reparations paid and no standing army supported; with double the agricultural land of Belgium and with no more population; with a railway and banking system radiating through all Southern Europe; with Vienna a tourist center second only to Paris; with vast wealth to be taxed, and a comparatively small war debt; with the Austrian crown worth as much as the French franc in 1919-they have made the minor after-war difficulties the excuse for failure-a failure ghastly enough, but resulting only from stupid and dishonest Socialism, and not from restricted area and tariff problems, difficulties which could have been surmounted by a stronger race.

Source: The Outlook, 11 Oct 1922

Filed Under: Finance Tagged With: , , , ,

Austria is Dying – Part 1

December 24, 2010 By Leave a Comment

NATIONS are not very different from individuals. If they are thrifty, they get along; if not, they don’t.

Austria was a monarchy for centuries. Vienna, the capital, grew in size with the growth of the population of Southern Europe.

It became a political, financial, commercial, musical, and artistic center for a hundred million people.

The “Viennese” have been known rather as an easy-going, pleasure-loving people than as a people prone to political domination. Yet the Hapsburg dynasty, which ruled Austria-Hungary, has been influenced and controlled by many of the most corrupt and cruel people that have been placed in power or allowed to grasp power in European history.

I am inclined to accept the statement that the Austrian people did not raise a finger to commence the war, yet they cheered their troops as they marched against Serbia, and thought not of the morrow of world chaos. They had never participated in plans, they had only shared results.

The Empire did grow and prosper; Vienna did increase in importance and wealth. What had been would continue to be, so “Hail to the old Emperor, his Ministers and Generals.” They also cheered the German Empire as it reached forward and took the reins from their hands (if they ever were in their hands), and they did not anticipate trouble to come.

The long struggle ended in defeat, and their Empire was cut up into pieces and handed to different foreign Powers.

When Vienna found itself one-third of a small democracy, it had neither natural gifts nor training to make itself function as a self-government.

Suppose it were left to the passengers, men and women, of a sinking ocean steamer to launch the lifeboats and save themselves. The story would be a sad one. The story of the attempt of Austria to launch a democratic government has also been sad. Fumbling, confusion. and beginning at the wrong end with the best intentions in the world, have marked their efforts.

When we come to think of it, self-government is no snap. It will not run itself except into the ground. The people must govern the state as they govern themselves, with industry, courage, and self-denial. None but a great people can become a democracy in the true sense of the word, and the Austrians are not a great people.

Let us drop the word “Democracy” and use “Socialism.” We will more quickly understand the cause of the present plight of Austria.

Socialism tries to give the “common man,” or the “average person,” or “the worker,” a good time in life. Socialism believes that if every one works, say, two hours a day, all necessities and proper luxuries can be provided and distributed, and that the balance of the time can be given up to recreation and the cultivation of arts and education. This is only a theory. I have never heard whether the theory went so far as to have the state function as a means of enforcing the theory or not; but the Austrian Socialists passed laws to enforce part of the theory, at least, and provide means to insure a trial for a while.

They said food must be cheap, so it was bought abroad or at home for what it could be obtained, and sold for a song. A loaf of bread was sold for two-thirds of a cent a pound, while the same loaf was being sold occasionally in the open market, when Government supplies couldn’t be obtained, for three cents. Meat was handled in the same way.

The railways were operated to give the Austrians a ride for almost nothing. Six cents for a hundred-mile ride, third-class, was the published rate in March, 1921.

They couldn’t control everything; but they did a lot, and ran behind as fast as their industry in buying high and selling low would let them.

They prohibited increase of rents-a fine thing in theory, but they made street beggars out of the landlords, for houses could not be sold that could not produce an income. Only last week a man with a handsome flat of eight or nine rooms in the center of Vienna told me his rent was $2 a year.

This Government ran against a deficit mighty soon; but they issued paper currency to meet their obligations. This increase of the paper money made the value fall somewhat in neighboring countries (the paper crown was worth from seven to nine cents at the Armistice), and therefore also in Austria. Right here is where Austria committed suicide; here is where any benefits of Socialism which might have been demonstrated were stupidly thrown away. They could have made a fairer distribution of the burdens and benefits of citizenship, they could have taken a few steps toward a final self-government, but they didn’t realize that the crowns they issued promised “to pay, on demand, one crown in metal currency;” they did not realize that a reserve and actual redemption of the crown were necessary to preserve its value; they failed to be honest, and redeem their word. Hence they failed in everything. The rest of the story is simply and easily told. They met every deficit with new issues of paper money. When I was in Vienna in March, 1921, I bought 700 crowns for $1- A year later I bought 7,000 crowns for the same $1. Now I am buying 75,000 for $1. It is a wonder the crown has any value at all. Austria up to September 9, 1922, had. according to official figures, 1,311,000,000,000 paper crowns outstanding.

Get out your pencil and write one trillion three hundred and eleven billion crowns; it will probably be the first time that you have ever written serious figures running into trillions. While you have your pencil out, just divide that huge sum by seventy-five thousand, the number of crowns I am buying for a dollar, and you will see that their entire paper money is worth only seventeen and a half million dollars. This shows why Austria must quit as at present constituted. In spite of the enormous amount of paper in circulation, it isn’t worth anything, or, as one of our funny-picture men would put it, “It doesn’t mean anything.”

They are actually using quite a little foreign currency in buying and selling merchandise.

Source: The Outlook, 11 Oct 1922

Filed Under: Finance Tagged With: , , , , ,

Millions

December 22, 2010 By Leave a Comment

Mr. Poole’s “Millions” is in one sense slight, for it is brief, involves few characters, and is centered on one situation. But its very simplicity is its strength. The theme interests one singularly, because it is that of a test of human nature-whether a woman’s honor and conscience will give way to the temptation of self-interest disguised as morality.

Madge, half-sister of a man reputed to be a millionaire, is summoned to what may probably be his death-bed. He has neglected her and allowed her to fight her own way, yet she knows that he has made a will in her favor. The brother is unconscious for days; other relatives cluster around, but the sister is legally and morally responsible; an actress appears who has been the brother’s mistress and thrusts herself into the foreground ; the relatives fear she may grasp the millions at the last minute. The brother comes to himself and demands to see the actress. To thwart him may be to kill him. What shall the sister do? In the end she does what her sense of honor and right dictate; she refuses to shift the responsibility to uncle, aunt, and cousin, who would be shocked to admit to themselves that they at heart hope that the man will die.

It would be unfair to tell just how the problem is settled; the result is the growth in this woman under severe trial of firm character, power of decision, and resolve to do what is just and right despite consequences. Madge emerges twice the woman she was, and we know that she will now grapple wisely with life’s problem, millions or no millions. Incidentally the corroding influence of expectant wealth on average people of perfect respectability is subtly shown. Problems aside, the book has reality and tensity.

Millions. By Ernest Poole. The Macmillan Company, New York. $1.75.

Source: The Outlook, 11 Oct 1922

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