Knowledge that Transforms

It is a commonplace that European countries, and especially Germany, have in the last decade been striving with particular earnestness to make their schools perform a function in the training of business men. England, France, and Belgium have perhaps not been overenthusiastic n the attempt, but they have been by no means inactive; and while they have not kept pace with the strides of Germany, it is yet true that each country has made distinct progress. In England, owing to the comparatively backward state of the whole educational system, the problem is particularly difficult. And consequently, so far as day instruction isconcerned, only the merest beginnings of an adequate system can at present be discerned. In all of the Continental countries of importance, however, commercial education, both in quality and in quantity, has gone far beyond the elementary stages. Very naturally we look to Germany for the most significant ventures in this new field of educational endeavor, for enterprise in this direction is merely in harmony with the theory of German education. Those who have read Dr. Cooley's highly instructive report on foreign schools are familiar with the general plan and scope of commercial education in Germany. For my present purpose it is sufficient toemphasize one striking difference between the German system and our own. Relatively speaking, no great progress in commercial instruction has been made in the German secondary schools. Training of this kind is provided chiefly in the schools of continuation and of college grade. Of the former there are hundreds. They are everywhere, supplementing the business experience of the youth, as he gets it in actual employment, with thoroughgoing instruction in business affairs. The German continuation school has its counterpart in this country in our evening instruction but is far superior to anything we are able to do here, partly owing to the hold which the business school has on the German youth, and partly because to compel the attendance in day schools of pupils actually engaged in

The following tables are constructed from the statistics of the ninth census. The first able shows what per cent of the population over ten years of age, and what percentage of all persons in certain typical occupations, was composed of natives, what per cent was composed of the four leading races of European immigrants-that is, of British (including English, Scotch, and Welsh), Irish, German, and Scandinavian-and what percentage was composed of other immigrants. The second table shows what percentage of the natives and of each of the four European races entered the selected industries.

During the last year much attention has been given to the dominant position of New York City in our banking system. The extent of the control exercised by New York has been and is so great that several important changes that are taking place have escaped general notice. That the position of New York City as a banking center has undergone a change in the last few years is shown by the facts: (i) that a smaller amount of cash is being withdrawn from there each fall for crop-moving purposes; (2) that a relatively smaller amount of cash is held by the New York banks than in former years; (3) that New York holds relatively less of the reserve funds of the entire country than in the past; (4) that the total banking resources of New York have been growing less rapidly than those of other parts of the country; and (5) that strong banking centers are rapidly being developed in other sections. The rest of the United States is apparently becoming more and more independent of New York for cash and for the financing of relatively small enterprises. With the financing of large ventures and with the general question of extension of credit this paper does not deal. That the fall movement of cash out of New York is less than in former years is a fact which few people seem to have noticed. Probably very few indeed are aware that the net movement during the fall months is now in the other direction. Several years ago this movement was carefully analyzed, for the years I899-I9O8 inclusive, by Professor E. W. Kemmerer in his report to the National Monetary Commission.' He averaged the movement for this period and found a definite flow of money out from New York each fall-a movement averaging $3,434,000 in the thirty-eighth week of the year (the latter part of September) when it was at its maximum. The maximum movement into New York he found to be $6,895,000 and to occur in the latter part of January.

Business men measure prosperity by the demand for their products. Indeed, rising prosperity is nothing more nor less than an increased demand for goods. If we can determine the source of this extra demand we have put our finger on the source of prosperity. Conversely, industrial depression is a general shrinkage of demand for commodities. If we can discover why demand contracts, the cause of industrial depression is revealed. It is my contention that this extra demand for goods is primarily for promotion purposes. In other words, it is a demand for capital goods to enlarge industries and to establish new ones. The activity of promotion in England is best measured by the applications for capital in the London market.' Less satisfactory promotion data are available for the United States-listings of stocks and bonds on the New York Stock Exchange.2 For recent years, however, computations have been made of the new securities issued in the United States.3 Promotion moves in cycles. For example, promotion, as evidenced by the capital applications in the London market, increased from i867 to a maximum in i873, decreased from i874 to i876; increased from i877 to i88i, decreased from i882 to i885; increased from i886 to i889, decreased from i890 to i893; increased from i894 to i900, decreased from i90i to I903; increased from I904 to I905, decreased in i906. The cyclical movement is very apparent throughout this entire period. Because promotion takes the cyclical form there are corresponding movements in credit, prices, production, transportation, commerce, wages, employment, and so on. The combination of all these movements is recognized as a prosperity cycle. Unprogressive countries in which there is little promotion do not have these

Many and varied factors have been assigned as the cause of crises. Some writers, it seems, have mistaken effect for cause. Others have singled out one factor as the cause, ignoring others of equal or greater importance. Still others have recognized the com? plexity of a crisis situation and given recognition to many factors, but one places emphasis on one, another on another. Indeed it is probable that the problem in connection with crises now is not altogether the development of new theories. We have theories in abundance. Instead, it is to determine the degree of truth in each, for most theories of crises appear to have some scientific foundation, and then to determine the relative importance of each. After this has been done there remains the task of combining these theories into a harmonious whole. The situation would be less complicated if writers on the subject of crises avoided the use of vague or poorly defined terms.