ADDRESS OF MR. WILLIAM WHITMAN.

Mr. President and Gentlemen of The National Association of Cotton Manufacturers :

I feel abashed after such an introduction, Mr. President, as you have given me.

It was with great diffidence that I accepted the invitation to be your guest this evening and deliver an address. I distrusted my ability under existing conditions to speak words that would be either useful, helpful, or encouraging. I feel equally diffident now, but obligations to this Association, with which my business is closely affiliated, and of which I have been a member for many years, the desire to meet so large a number of your members, and my personal friendship with many of them, inspire me with courage to express very briefly some thoughts regarding existing trade conditions and relations which affect us all alike.

The subject of my address is:

THE INVIOLABILITY OF MERCANTILE OBLIGATIONS.

Unquestionably the present depressed and disrupted condition of business and industry in this country is to be ascribed to the recent financial panic. In my judgment the disastrous effects of that panic are more widespread and lasting than those resulting from any other panic during the last half century. They would have been incalculably more ruinous had not industrial, agricultural and commercial conditions for a long time previous been unusually healthy and the country more prosperous than ever before in its history. Because of these there have been comparatively few failures.

While the process of restoration appears to be slow, there is every reason to cherish the hope that normal conditions will prevail at a comparatively early day. Money which was almost unobtainable for several months is now offered at lower rates of interest than for many years. Stocks of merchandise are

depleted. The shrinkage of values has apparently ceased. This shrinkage has been so great — greater than I have ever experienced that prices now ruling are so low as to offer extraordinary inducements to buyers. Purchases can be made with greater safely as to change of value at the prices of to-day than they could have been made at any time for several years. It seems to be a good time to buy. I think it is always good business to buy when prices are abnormally low. I do not look for cheaper cotton or wool, which are the raw materials we are more especially interested in. Once buying sets in, prices cannot but advance. Confidence is being gradually restored. When we consider the long period of depression through which we have passed, with its attendant results, in connection with the high promise that our agricultural products will afford a large surplus for shipment to foreign countries, how can we held being inspired with confidence in the early return of prosperity to our various industries? There are more people to be fed and clothed to-day than at any previous period. There is not only an increase in the population, but there will be an increase in the wants, if not the needs, of our people. Time will accentuate such wants. As an indication of the confidence of myself and associates in an early restoration of business activity, let me say that we are now erecting and will soon have in operation a new cotton spinning mill that will cost $1,500,000.

By newspapers, magazine articles, public addressse, expressions of commercial organizations and sermons from the pulpit we have been told of the very many causes for the late panic, of the many lessons supposed to be taught by it, and of many remedial measures alleged to be necessary to prevent future panics. Most of these will soon be forgotten. It is not my present purpose either to discuss or even enumerate them. Permit me, however, in availing myself of the opportunity now afforded me to speak very briefly of but one of the chief causes of panics and business disorders, and to impress upon you the vital importance of advocating, enforcing and acting upon the fundamental principle that mercantile obligations should be held.

inviolable. The time is opportunity for such action. It is in harmony with the great moral awakening of the entire country with which his excellency, Governor HUGHES, is so prominently identified.

I do not question the business honor of our people, but recent experience has forced me to the conclusion that business methods. are loose, if not vicious, and that too large a proportion of business men do not recognize the binding nature of the obligations imposed by contracts. It seems to me that this is especially so in the business in which we are mutually engaged, and I think that it should not be so. In my opinion, a true regard for the inviolability of mercantile obligations furnishes the best safeguard against unnaturally rapid expansion of credit or of business. If that regard existed, financial institutions would be more careful in making engagements for the loaning of money, and surely one of the greatest losses to the business community during the recent panic resulted from the sudden withdrawal of bank accommodation. Commission houses would not arbitrarily withhold. customary advances upon the merchandise of their consignors. Nor would they easily permit returns and cancellations which are so detrimental to the interests of consignors.

When our merchandise is disposed of we should have the assurance that the sales are bona fide and that payment can be depended upon. If every man who sold mercandise would insist that the buyer live up to the terms of the sale; if buyers would feel that they must not buy beyond the needs of their business or beyong their capacity for paying; if both buyers and sellers would recognize their mutual obligations to the full extent, and neither one would expect the other to bear any part of his losses or burdens, it would surely lead to more conservative and sounder business transactions.

The maintenance of a high standard of business honor depends upon a thorough understanding of the character, scope and binding nature of business obligations. It behooves every man to insist that his business transactions shall be based upon the faithful performance of all contracts. Most business contro

versies arise from loose, if not improper ways in which contracts are made. Such contracts have the effect of lowering the regard in which obligations should be held. Honor is the foundation. of credit. Character and honor are synonymous. Character has been described as the power to make talent trusted. Wealth or property without honor is an insecure basis for credit. Our country's vast volume of business, so immense that it cannot be comprehended in its entirety, nor conveyed to the mind by statistical exhibits, has been built up by, and is now conducted upon, credit. A very large part of this immense business is transacted without written contracts, and a larger part under written but not legally binding contracts. The spirit, not the letter, of the contract is, after all, the essential thing. Business men must trust each other, and this trust or confidence is to be based upon the character. We must look rather to the man who makes the contract than to the contract itself.

We are often told that the standard of business honor is not so high as it used to be, but years of experience convince me that this is not true. No one can consistently deny the existence of the evils to which I have referred; nor of many trade abuses, fraudulent transactions, prevalence of speculative mania, unreasoning haste to get rich, and the overestimation of wealth among life's blessings. But all these and kindred evils have ever existed and probably will exist in a greater or less degree to the end of time.

The fundamental principles of permanently successful business, however, are the same now as yesterday and will remain the same forever. Business based on wrong principles cannot be permanently successful. Fortunately the results of wrongdoing are in themselves the preventatives of wrongdoing. Failure to live up to the terms of a contract is only excusable on account of inability to perform, and inability is, after all, only a partial excuse, for obligations should not be incurred without. reasonable certainty of ability to meet them. Any attempt to evade the terms of a contract on a technicality is to be condemned. The magnitude of our business is so great that it

could not be transacted if contracts had to be surrounded with every possible legal safeguard. The oral should be equally as binding as the written contract, but the latter is needed to prevent misunderstanding of terms or conditions, as well as lapses of memory. Sellers of merchandise only too frequently refrain from demanding what is justly due them from buyers for fear of losing what they term the buyer's patronage or good will, but neither buyer nor seller can afford to do business with those who either cannot or will not meet their obligations.

It has been said that competition is the life of trade. While this may be true, there is a kind of competition that is ruinous to trade. The records of the past are filled with business wrecks resulting from unfair competition. Such competition as comes from underselling the products of one's own or others' labor is destructive. Underselling is to be condemned, not approved. No man should be excused from the performance of a contract because of a loss arising from changed market conditions. The burdens of mistakes or errors of judgment should be borne by those who make them. Burdens of the community can be more widely and evenly distributed by each man accepting and bearing his own burdens. The man who cheerfully and manfully bears his own burdens cannot but command the respect of his fellows. Generosity, liberality or philanthropy cannot honorably be indulged in at the expense of others. The first obligation of the debtor is to pay his own debts rather than to release from payment the debts that may be due to him. One should be just before he is generous. He who would intentionally evade obligations is not entitled to credit. I am unable to distinguish between the obligation expressed in a note and the obligation of a maturing debt on open account. There should be no preference in payment of the obligations in ordinary business transactions.

During the trying period through which we have been passing we have been common sufferers from trade evils. As you know, there have been demands for cancellation of orders, refusals to accept shipments, requests for delayed deliveries,