herself on this memorable circumstance, the result of good banking and good business methods. She had, fortunately, no speculative capitalists with chains of important banks under their control, as New York had.

The crisis accomplished one good thing, and that was the sweeping away of this unsound banking, which had become a menace not only to New York, but to the whole nation.

The best banking authorities believe that actual business improvement is already making headway, although there is no uniformity in it, the recovery in some places, and some lines of business, being decided, while in others it is barely visible. Thus the Southwest, and its great distributing center, St. Louis, report a larger degree of betterment than any other section, while Chicago, like the Eastern and Middle States, reports comparatively little.

In the present stage of recuperation, the wage problem is forcing itself more and more upon public attention, and especially upon that of mill owners and the railway companies. The urgent necessity the railways are under of reducing them, to offset reduced earnings, is met by the unwillingness, or refusal, of the men to have them reduced. They have been encouraged in this situation by President ROOSEVELT'S action, and now the labor leaders are urging Congress to legislate in support of their position. But capital has its rights as well as labor.

The railway companies, as an alternative to reducing wages, have proposed an increase in freight rates, but shippers are up in arms against this, particularly manufacturers; and the authorities of the states, as well as the Interstate Commerce Commission, signified their opposition to it. The railways, meanwhile, have kept pace, as far as practicable, with the contraction of traffic, by discharging large numbers of their men. In this way they have materially reduced their expenses, while they report increased efficiency by the labor still employed, every man in these times being anxious to hold his place by doing good work.

That is to say, jobs being now scarce, men want to keep their

jobs, instead of being "laid off," as the phrase is. This of itself is a wholesome effect of hard times.

The labor problem is one of peculiar difficulty, and substantial, permanent improvement in trade and securities will not. be seen until there has been a complete re-adjustment of commodity prices and wages in accordance with the altered conditions. To insure a steady word for labor and a fair profit for employers why would it not be wisdom for the Union labor leaders to agree to a contract, to last for four months only, consenting to a reduction of 20 per cent. in wages if the times warrant it. Re-adjustment is a harmonizing process, and harmony promotes recovery and the full development of our powers and resources. This is what the business situation imperatively calls for now, and all business men should do their best to foster it, and so work together as a unit, for in unity there is strength. We have an example of it in these United States.

The cotton goods industry in New England has, I know, been much more severely depressed by the crisis than was, at first thought possible; but fortunately, the losses sustained will be the more easily borne because of the large profits of previous years. Notwithstanding the cuts made in standard goods, the demand for them is still abnormally light, and hence stocks are accummulating, in the face of the heavy decrease in production.

No wonder, therefore, that those most intimately concerned are more or less at sea as to how long this depression will continue, and what the results will be. They see certain grades of goods that were selling at 83% cents a yard just before the panic now being offered at 52 cents, and this is an object lesson that tends to make even the most optimistic of them a trifle blue for the time being. But this is precisely the time when courage and confidence in the situation are most needed. I give you all credit, however, for being equal to the occasion.

With eighty-five millions of our own people to clothe to say nothing of the rest of mankind — manufactured cotton products will before long be in demand again at rising prices, for civilization demands clothes in hot weather as well as cold.

Meanwhile, endurance is called for, and will doubtless not be found wanting, except where special circumstances impose limits to it, and we all know that patience is a virtue.

Recovery to normal conditions will, of course, be gradual, and it is better that it should be so, to ensure permanence. In the meantime, it will be a relief to the dry goods trade when sales are no longer extensively made by cutting under quoted prices more or less sharply.

The bold, and even aggressive, action of the American Federation of Labor in going to Washington and making demands upon Congress, and criticising not only the laws but the decisions of the Supreme Court of the United States, puts a new and serious face on the old contest between labor and capital. It arouses some apprehension as to the lengths to which labor will go, and how far its political influence may enable it to accomplish its purposes. Politicians are ever ready to show subserviency to labor, merely for the purpose of gaining votes for themselves.

We all want to see justice done to labor, but we also want to guard against injustice being done to capital by labor, and labor's resistance to a reduction of wages to correspond in some degree with the decline in the earnings and profits of those employing it, is a practical injustice to all those outside the ranks of organized labor.

The re-adjustment of wages to existing conditions is, therefore, of the first importance and should be first to receive serious consideration, with a view to harmonizing both sides, and a prompt settlement. Half a loaf is better than no bread, for both labor and capital, and it is not to the interest of either to kill the goose that lays the golden egg. Their interests are mutual, but labor is posing as if they were antagonistic. It has often done this before, but never more conspicuously than now.

With respect to our foreign market for cotton goods, there is plenty of room to widen it, but our exports of these, in competition with England, Germany and other countries, are more or less checked by the high price of labor here, and its compara

tively low price there. Hence we ought constantly to endeavor to overcome this disadvantage by keeping ahead of the rest of the world in labor saving devices, and improvements in machinery and manufactures. We should try to surpass all Europe in the quality, as well as the cheapness, of our goods.

As we are the most inventive of all nations, and the quickest to adapt ourselves to new or altered conditions, we shall doubtless find this feasible, if not an easy task, whereas England, our greatest competitor in manufacturing, is proverbially slow in changing machinery.

I once asked Mr. ANDREW CARNEGIE what was the mainspring of his phenomenal success as a manufacturer of iron and. steel, and he replied:

"I always kept foremost in making improvements in my machinery and methods of manufacture. Whenever a new invention that I could use was patented, I secured it at any cost, and so kept in advance of all my competitors.

"At one time I had two million dollars worth of new machinery that I was about to install, but a man came to me with an improvement in it that he had just patented, and I bought his patent and adopted it. In doing this, I had to cast aside, as old material, the two million dollars worth of new machinery. But the improvement recompensed me many times. over for what I had sacrificed to make the change."

It is in promoting improvements in manufacturing processes and machinery that this Association, apart from its general utility, can be of great and permanent value to the cotton mill industry and kindred manufacturing enterprises. Ready adaptability of means to ends is as important in manufacturing cotton sheetings, and the other products of the loom, as in every other business and everything else.

I remember that in conversation with Admiral Sir CHARLES BERESFORD of the British navy, when he was visiting New York, he told me of an instance of American adaptability to circumstances, that he noticed while in China. The Chinese had been long complaining of the want of sufficient width in a certain.

grade of British cotton fabrics that they were using and they had asked the English agents from time to time if they would. increase the width. But nothing came of their expostulations and requests as the agents, after writing home, told them the Manchester manufacturers said they would have to alter their machinery in order to give them the desired width, and this could not be done.

But the agent of a large American dry goods house, with extensive cotton mill interests, arrived at Shanghai, and hearing the complaint of the Chinese, he said, "Give me your order and you can have whatever width you want," and he got the order. Sir CHARLES added: " So, you see, you people are smart and give them what they want; besides, you make your cotton goods heavier than we do and the Chinese like them better. because they wear longer, for when the Chinese put on such clothes they never come off until they rot off." [Laughter.] Here was an instance of ready adaptability to the occasion and market needs by an American which the English lacked. [Laughter.]

An illustration of the importance of scientific investigation with a view to the discovery of new elements and processes in manufacturing, is found in silkine, a fabric closely resembling silk, which has come into popular use. It resulted from the discovery that the mulberry, and other trees on which silk worms feed, possess properties that could be extracted and utilized, to a certain extent, in the production of a silky fibrous material which in combination with fine Egyptian cotton, made a cloth so closely resembling silk as to be possibly mistaken except by experts, for the silk of the silk worm. Here theoretical and practical science were happily combined with mechanical skill to produce an entirely new material, and doubtless there. are many similar opportunities awaiting discovery. This Association by stimulating such investigation in mechanical science may achieve even greater results than it anticipates.

The world's markets offer a most magnificent opportunity for the enterprise of American cotton manufacturers. We grow four-sixths of the world's crop of cotton but manufacture only