OUR AMERICAN LETTER.

Otago Witness, Issue 3168, 2 December 1914, Page 10

OUR AMERICAN LETTER.

(From Our Own Correspondent.) NEW YORK CITY, August 14. This country docs not escape scot free of the burden of trouble inflicted by the European war. Food prices are going sky high, and there is no telling when tney are going to stop. This is ominous considering that it comes even before the warring countries have drawn upon us for any supplies, and indicates that when tiio rush ot exports to Europe docs begin, prices will bo much higher. Not only are lood prices bounding upward, but the prices of hats, rubber goods, .paper, woollens, and ahemicals. It is announced that clotn.ng is going to cost much move because of the isolation of Germany by the hostile fleets and allied armies. Germany is the principal manufacturer of chemicals and analme dyes, and for the past two weeks the dye and sheraical markets in this country have been in a panicky condition. There are only four manufacturers of analine dyes in this country, and they produce scarcely 20 per cent, ot the total quantity used by American clothing manufacturers. Moreover, German Juanufacturers hold the patent rights for the Jtianufacture of synthetic indigo, which is an important constituent of the dyes, as well as patents on other chemicals used in the trade. As for chemicals, it is truly astonishing the way the prices have been sky-rocketing. Carbolic acid, for example, has doubled in price during the last two days, and women whose complexions are artificial are paying truly fabulous sums for their cosmetics. Resolutions have been introduced in Congress calling for an investigation of whether food prices are being arbitrarily advanced on the pretext that they have been affected by the European war. Tho Secretary of Commerce has been asked,, to investigate the advance in prices, particularly in Hour. In New York and other large cities steps have been taken by the prosecuting officials to find out whether there is a conspiracy on the part of dealers to advance food prices. Champ Clark, Speaker of the House of Representatives, declares that men found guilty of conspiring ta raise the prices of foods and other necessities of life on the pretext that the war is responsible, ought to be put in prison. The president of the Housewives’ League of America has taken steps to start a food boycott as a protest against the high prices. She has issued an appeal to every housewife in the country to enlist in what she calls this “war for defence.”_ Many dealers in food supplies freely admit that the upward movement in prices is duo more to speculative buying than to the law of supply and demand. And surely this must be tho case considering there are practically no exports of foodstuffs. In the American harbours shipping has been tied up since the war was declared, only a very small percentage of tho ships of any country daring to take the risks of crossing the ocean under present conditions. It is not only the fear of capture bv warships that is responsible for this tie-up of shipping, but the deadlock of international exchange. So fa-: tho war has had a terribly depressing effect upon business all over this country. Everybody seems to be in a state of perplexity as to the effect of the startling news from Europe upon conditions here. The prevailing opinion seems to bo that after tho war is over the United States is going to profit : mmeasurably at the expense of the belligerent countries. But a great many people believe that in tho meantime we must face hard times—indeed, we are facing them already. Tho railroads especially are feeling the strain brought upon them by the unnatural conditions. An unprecedented falling off in traffic has followed the embargo placed on grain and other export freight, which runs unusually heavy at this time of the year. The complete tic-up of imports has also reduced the freight received from manufacturers dependent upon Europe for war materials. There are fean that a great many men arc going to be thrown out of work in some of our great industrial centres. Tho steel trade, for example, is in a state of utter perplexity as to whether tho war will help or hurt it, and there are some indications that its mills may have to be shut down for a time, which would moan no work for hundreds of thousands of men. Our Stock Exchanges have been closed since tho day when the general war became inevitable, and nobody knows when they will open. On July 50 prices of almost all stocks dropped from 8 to 20 points. Tho failure of several largo brokerage houses was announced. Early the following morning the loaders of Wall street met in J. P. Morgan’s office to discuss tho situation. They were alarmed by the rush of selling orders piling up in the brokerage houses. European investors were unloading to a truly startling extent. Just before the hour for tho New York Stock Exchange to open its doors, it was announced from the Morgan offices that the Exchange would be closed indefinitely, and the other Exchanges throughout tho country followed suit. This decision has aroused a good deal if criticism, it being argued that the American Exchanges should bo kept' open to show the world tho strength of our financial position, jjut the rush of selling orders convinced the

men in control of Wall street affairs that if the New York Exchange opened its doors a panic was certain to follow. It is not improbable that the Exchange will remain closed as long as the war lasts. If it was unsafe to open the doors on July 31, the same reason certainly holds just as good to-day, and it is hard to see why conditions should be altered in that respect until j eace is declared. Then, too, besides the war there have been several happenings within our own borders that' would; if the Exchanges had been open, surely have exerted a most depressing effect upon the markets—for example, the Inter-State Commerce Commission announced the other day a decision refusing the requests of Eastern railroads for advances in freight rates. This was a sad blow to the roads, which had expected that at least a part of the advance they requested would be granted. On top of that oomes the decision of the United States District Court in Minnesota that the International Harvester Company is a monopoly in restraint of interstate and foreign trade, and must bo dissolved. Unless this corporation submits a plan for the dissolution of the combination into at least throe independent concerns within 90 days, or in case of appeal within 90 days of the issuance of an appeal mandate, from the Supreme Court, a receiver will bo appointed for all the properties of this 140,000,000d0l corporation. The people of this country of all parties, cannot help but admire the way in which the national administration has handled the cxceedinglv complicated situation produced by the outbreak in Europe. President Woodrow Wilson is proving himself to he a statesman indeed. We are witnessing in this country a readiness to rise.above partisanship and stand by the President in his efforts to take in all possible sail and render the ship of state as safe as may be in the hurricane that has burst upon it. The credit for all this belongs in largo part to the President alone. He has mot the national emergency with the same p-iiso and skill with which he has held Congress to its work from the very beginning o? his administration. Says the New York Times, which is perhaps the most influential independent newspaper in the country; —“The sneered-at college professor has shown again not only what it means to have communed with the world’s philosophers, but has demonstrated the supreme value of rigid mental discipline as well. His hand on the helm has never wavered; his own coolness and steadiness under conditions which might have snapped many a physically stronger man have won him the unbounded admiration of the corps of newspapermen who have daily found him about the only outwardly unruffled man in the intense heat and fearful strain of Washington. They will not soon forget the oloeiuent words with which he outlined to them the gravity of the war or 'sis and the duty of the press—words spoken primarily for them, but which they demanded for publication. And the public will not forget that his message tendering the good offices of this Government to the warring nations of Europe was written at the bedside of his dying wife. In every wayin this great emergency h© has given fresh proof of his marked fitness for the headship of the nation.” That the President’s course has '•been appreciated by the public is obvious from the changing political atmosphere in Washington. So far from being impatient to return homo, Congressmen are ready now to stay on as long as their leader in the White House demands it. The Senate has speeded un its own business so that its deck may bo cleared of the Trust Bills by the end of this month, and that it may bo ready for any action the nation’s situation may then warrant. That so keen a politician as Mr Roosevelt ha® called off his proposed criticisms of the amateur in the White House is clear proof of_ the changed situation in Washington. It is no longer the thing to talk about the Democrats’ certain loss of the House of Representatives. If a financial depression is impending, the Democrats are not likely to suffer from it. No Republicans would have the face to lay this at thenrivals’ door. If such a thing should bo attempted during the Congressional campaigns throughout the country this fall, the Democrats will bo able to point to Mr Wilson’s handling of the war situation and to ask whether at anv period in our history wo have ever had smoother working governmental machinery in a grave national crisis. One of the most serious problems to bo solved at Washington is how to make up for the great loss of Government revenues due to the situation in Europe. It is estimated that the deficit in Customs revenues for the balance of the fiscal v©ar will no between 100 million and 200 million dollars. The Treasury Department and members of Congress are figuring the amount of revenue that may he derived from various forms of taxation to meet this deficit. Among the means that are being considered are the imposition of a stamp tax including a tax on stock transfers, an increase in the tax on beer and liquors, and an increase in the income tax. At least 100,000 American tourists, many of them without money, are unable to get out of Europe. Some of the wealthiest of them have been glad to accept steerage accommodation in the wery few homewardbound vessels. Authority has just been given to the American Embassies and Legations

throughout Europe to charter ships in vhich to bring- the stranded Americans homo. An effort will bo made to concentrate the Americans at open ports, where neutral ships will bo chartered at once. All thought of sending vessels over from the United States to bring the Americans back has been abandoned. Plans for the international naval parade through the Panama Canal next April, which was to mark the official opening of the canal and Panama-Pacific Exposition at San Francisco, have been laid aside temporarily. Warships of every nation were to have been invited to take part in this parade, wntil the European war is settled it is concluded that it is useless to proceed with the programme. Whether the war will be ended by next April is, of course, a matter of conjecture, but the officials hope that the canal parade will prove to be the first international event participated in by the present belligerents, thereby making it even a more notable event than has been anticipated. San Francisco is still confident that : ts Panama-Pacific Exposition will take place, and will be a success. Although, with the exception of France, none of the great nations of Europe will send exhibits, it is believed that the fact that in case the war continues until that time no Americans will be able to go upon their annual European tours will greatly increase the attendance at the fair. Responsibilities of American business men towards South America are set forth by John Barrett, Director-general of the Pan-Ameri-can Union, who emphasises the financial and business crisis which confronts Brazil and .Spanish America. South America is an enormous purchaser of the manufactured products of Europe. A large portion of this supply will be shut off as long as the war continues. The 10 South American countries annually import products from Europe valued at 650,000,000 dollars. Great Britain supplies products to the value of 273,000,000 dollars; Germany, 180,000,000 dollars; France, 84,000,000 dollars; Italy, 54,000,000 dollars; Belgium, 47,000,000 dollars. Exports from the United States to South America amount to 155,000,000 dollars. South .-America annually exports 700,000,000 dollars to Europe. Of these products, Great Britain takes 220,000,000 dollars; Germany, 157,000,000 dollars; France, 104,000,000; Belgium, 60,000,000 dollars. South America annually exports to the United States products valued at 250.000,000 dollars. These South American countries are looking for a place to dispose of their accumulating stores, and, if the importing interests of the United States can relieve the situation by increasing their purchases, they may save the South American business interests from c financial crisis. Incidentally, it may be remarked that certain business interests in the United States hope, as a result of the war, to get control of certain South American markets that have hitherto been entirely in the hands of the Germans.