situation. I am doing everything I have power to do; but the fundamental fact is that the public is suffering from a spasm of lack of confidence. Most of this lack of confidence is absolutely unreasonable and therefore we can do nothing with it. There is a part for which there is a substantial basis however. There has been so much trickery and dishonesty in high places; the exposures about Harriman, Rockefeller, Heinze, Barney, Morse, Ryan, the insurance men and others have caused such a genuine shock to people that they have begun to be afraid that every bank really has something rotten in it. In other words they have passed through the period of unreasoning trust and optimism into unreasoning distrust and pessimism. I shall do everything I can up to the very verge of my power to restore confidence, to give the banks a chance to get currency into circulation." 1

Roosevelt was especially severe in his criticism of Rockefeller whom I have already considered; but Rockefeller would have been astonished to know that he was classed with men of evil intent; on the contrary he was at this time working at the back of Morgan and with the same purpose in view as that of the President "to restore confidence." It was, it is true, a selfish purpose, as to disturb the complex arrangements of business and of finance was worse, so far as the amount of loss is concerned, for the large financiers than for the wage-earner and small shop-keeper.

By February 1, 1908, confidence was practically restored. On the last day of 1907 the premium on cur

1 Bishop, ii. 48.

rency was only of one per cent. But the strain had been great. One week during November the deficit in the legal reserve was 54 millions; this was when the weekly statements were made on the old basis before the passing of the Federal Reserve Act. One hundred million dollars of gold were imported from Europe. At the close of the year the Bank of England rate was the highest for thirty-four years. So far as New York City was concerned the panic according to Alexander D. Noyes was not approached in 1893 and hardly paralleled in 1873; although the remark would hardly hold true of the West.1

In the West was a large amount of so-called desert land. But "the very condition of aridity," wrote George Wharton James in his useful book, "is an assurance of great fertility when water is applied. . . . The most fertile countries are the arid ones, and not the humid and

1 An excellent authority is Alex. D. Noyes whose articles in the Forum for July, Oct. 1907, and Jan., April, 1908, give a true and exact account of the panic. I have also consulted The Nation for Oct. and Nov. 1907, the financial articles in which were probably written by Noyes; also the N. Y. Tribune for Oct. 21, 22, 23, 24 and Nov. 5.

"During the panic of 1893 no bank failure of any consequence occurred in New York City. In October, 1907, one national bank, four trust companies and six state banks closed their doors in that locality and in the closing week of January the suspension was announced of four banks doing business in Manhattan Island. These were not institutions of the first importance but at the start they threatened complications to the general situation. . . . All of these January bank failures represented the cleaning up process which followed an experiment in reckless and unusual banking undertaken during the recent boom. These banks, directly or indirectly, had been involved in the process known as 'chain banking.'" Noyes. The Forum, April, 498.

In July, 1893, in New York City only one national bank suspended with assets of $800,000 and one state bank with assets $400,000. During August, 1893, two more state banks and during December another state bank closed their doors.

well watered ones." And water was plenty but it came from the mountains, partly from the melting of snow, and during the late winter and spring rushed down the river-beds in torrents, frequently overflowing the plains and sometimes carrying destruction to farms, villages and towns. The rain descended and the floods came and the winds blew. The problem was to chain this force, to store the water when it was plenty and let it loose during the intense heat of the summer and whenever wanted. The method to be applied was well known; the money and the ability properly to spend it were necessary factors. Something had been done by private companies and by State and other official organizations but they could not furnish the means to operate irrigation on a large scale. Soon after Roosevelt became President, Gifford Pinchot and Frederick H. Newell called upon him and presented "their plans for National irrigation of the arid lands of the West." They found in Roosevelt a ready listener and one thoroughly comprehending. As a young man he had passed much time on a ranch 2 and understood the marvels of irrigation, so that no argument was needed to convert him to the scheme which he advocated in his first Message to Congress. "The forest and water problems," he declared, "are perhaps the most vital internal problems of the United States." On June 17, 1902, he had the satisfaction of signing the bill which provided for the work being done by the Nation. This is known as the Newlands Act from its author, Senator Newlands, who had wrought strenuously to effect its passage.

1 Reclaiming the Arid West, 25, 26.

See My Brother, T. Roosevelt, Mrs. Robinson, chap. vi. 8 Autobiography, 431.

Part of James's book reads like a magical romance. "For a life-time," he wrote, "I have sung the majestic chorus of Mendelssohn from Elijah, 'Thanks be to God; he laveth the thirsty land.' Again and again have I thrilled to its passionate power, but never did I dream of its full significance until I saw water pouring through the irrigation canals of our thirsty West; the gentle murmuring of the flowing waters suggesting the music made by the land as it soaked up, absorbed, drew into every thirsty pore, the life-giving, stimulating, seedgrowing fluid." 1

2

When one thinks that the United States is, according to European opinions, a loosely administered country, one reads with satisfaction James's tribute to the "knowledge, skill, ingenuity, tact, patience and equanimity of the officials, engineers and managers of the Reclamation Service"; and one cannot help thinking that nowhere else could so large an undertaking have been more efficiently conducted. James is not a Californian, possessed with the idea that his is the greatest country on earth and full of blind enthusiasm for the Western States, as he is fully conversant with the English work in Egypt and India and the irrigation system of Argentina. Roosevelt, on the completion of the Roosevelt Dam in Arizona, thanked the engineers present "for their admirable work, as efficient as it was honest and conducted according to the highest standards of the public service. As I looked," he said, "at the fine, strong, eager faces of those of the

1 Reclaiming the Arid West, 34.

2 James dedicates his book to John W. Powell, Francis G. Newlands, Charles D. Walcott, Frederick H. Newell, William E. Smyth, George H. Maxwell, Arthur P. Davis, Franklin K. Lane.

'Reclaiming the Arid West, 11, 37, 390.

force who were present and thought of the similar men in the service, in the higher positions, who were absent and who were no less responsible for the work done, I felt a foreboding that they would never receive any real recognition for their achievement." 1

Roosevelt had a clear comprehension of what was needed when he became President. "The idea that our natural resources were inexhaustible," he wrote, "still obtained, and there was as yet no real knowledge of their extent and condition. . . . Our magnificent river system with its superb possibilities for public usefulness was dealt with by the National Government not as a unit but as a disconnected series of pork-barrel problems. On June 17, 1902, the Reclamation Act was passed. It set aside the proceeds of the disposal of public lands for the purpose of reclaiming the waste areas of the arid West by irrigating lands otherwise worthless and thus creating new homes upon the land. The money so appropriated was to be repaid to the Government by the settlers, and to be used again as a revolving fund continuously available for the work.” 2

The storage dam, called after Roosevelt, at the canyon of the Salt River "a wild, ragged and picturesque spot," is an excellent example of irrigation. "To create a dam here of sufficient power to stop and tame the Salt River, especially at flood time, meant a gigantic piece of solid engineering." 3 Such a one was constructed and the result is best told by a citation by Charles G. Washburn

1 Autobiography, 435. The men whom Roosevelt held up especially for honor were Gifford Pinchot, John W. Powell, F. H. Newell, Charles D. Walcott, Francis G. Newlands, G. H. Maxwell, Dr. J. W. McGee. 2 Autobiography, 430, 431.

'Reclaiming the West, James, 71. See that book for a fine account.