by Unknown
Now in estimating the quantitative importance of the factor to which I am calling attention, we have to consider what has been happening to the prices of various types of property. There are, first of all, the principal raw materials and food stuffs of international commerce. These are of great importance to the banks, because the stocks of these commodities, whether in warehouse or in transit or embodied in half-finished or unsold manufactured articles, are very largely financed through the banks. In the last eighteen months the prices of these commodities have fallen on the average by about 25 per cent. But this is an average, and banks cannot average the security of one customer with that of another. Many individual commodities of the greatest commercial importance have fallen in price by 40 to 50 per cent or even more.
Next come the common shares of the great companies and corporations which are the market leaders in the Stock Exchanges of the world. In most countries the average fall amounts to 40 to 50 per cent; and, this again, is an average which means that individual shares, even amongst those which would have been considered of good quality two years ago, have fallen enormously more. Then there are the bonds and the fixed interest securities. Those of the very highest grade have, indeed, risen slightly, or, at the worst, not fallen by more than 5 per cent, which has been of material assistance in some quarters. But many other fixed interest securities, which, while not of the highest grade, were, and are, good securities, have fallen from 10 to 15 per cent or more; whilst foreign government bonds have, as is well known, suffered prodigious falls. These declines, even where they are more moderate, may be scarcely less serious, because such bonds (though not in Great Britain) are often owned by the banks themselves outright, so that there is no “margin” to protect them from loss.
The declines in the prices of commodities and of securities have, broadly speaking, affected most countries alike. When we come to the next category of property—and one of great quantitative importance—namely real estate, the facts are more various as between one country and another. A great element of Stability in Great Britain, and, I believe, in France also, has been the continued comparative firmness in real estate values:—no slump has been experienced in this quarter, with the result that mortgage business is sound and the multitude of loans granted on the security of real estate are unimpaired. But in many other countries the slump has affected this class of property also; and particularly, perhaps, in the United States, where farm values have suffered a great decline, and also city property of modern construction, much of which would not fetch today more than 60 to 70 per cent of its original cost of construction, and not infrequently much less. This is an immense aggravation of the problem, where it has occurred, both because of the very large sums involved and because such property is ordinarily regarded as relatively free from risk. Thus a situation has been created in the United States, in which the mortgage banks and mortgage and loan associations and other real estate financing institutions are holding a great mass of “frozen” mortgages, the margins on which have been consumed by the fall of real estate values.
Finally, there are the loans and advances which banks have made to their customers for the purposes of their customers’ business. These are, in many cases, in the worst condition of all. The security in these cases is primarily the profit, actual and prospective, of the business which is being financed; and in present circumstances for many classes of producers of raw materials, of farmers and of manufacturers, there are no profits and every prospect of insolvencies, if matters do not soon take a turn for the better.
To sum up, there is scarcely any class of property, however useful and important to the welfare of the community, the current money-value of which has not suffered an enormous and scarcely precedented decline. This has happened in a community which is so organised that a veil of money is, as I have said, interposed over a wide field between the actual asset and the wealth owner. The ostensible proprietor of the actual asset has financed it by borrowing money from the actual owner of wealth. Furthermore, it is largely through the banking system that all this has been arranged. That is to say, the banks have, for a consideration, interposed their guarantee. They stand between the real borrower and the real lender. They have given their guarantee to the real lender; and this guarantee is only good if the money value of the asset belonging to the real borrower is worth the money which has been advanced on it.
It is for this reason that a decline in money-values so severe as that which we are now experiencing threatens the solidity of the whole financial structure. Banks and bankers are by nature blind. They have not seen what was coming. Some of them have even welcomed the fall of prices towards what, in their innocence, they have deemed the just and “natural” and inevitable level of pre-war, that is to say, to the level of prices to which their minds became accustomed in their formative years. In the United States some of them employ so-called “economists” who tell us even today that our troubles are due to the fact that the prices of some commodities and some services have not yet fallen enough, regardless of what should be the obvious fact that their cure, if it could be realized, would be a menace to the solvency of their institution. A “sound” banker, alas! is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him.
President Hoover’s plans to render some of the banks’ better assets more liquid may help to tide over an immediate emergency. But nothing on earth can put the banks in good shape or save them from ultimate default except a general recovery in prices and money-values. For there is a degree of deflation which no bank can stand. Thus over a great part of the world, and not least in the United States, the position of the banks, though partly concealed from the public eye, may be in fact the weakest element in the whole situation. It is obvious that the present trend of events cannot go much further without something breaking. If nothing is done it will be amongst the world’s banks that the critical breakages will occur.
Modern capitalism is faced, in my belief, with the choice between finding some way to increase money-values towards their former figure, or seeing widespread insolvencies and defaults and the collapse of a large part of the financial structure;—after which we should all start again, not nearly so much poorer as we should expect, and much more cheerful perhaps, but having suffered a period of waste and disturbance and social injustice, and a general re-arrangement of private fortunes and the ownership of wealth. Individually, many of us would be “ruined”, even though collectively we were much as before. But under the pressure of hardship and excitement we might have found out better ways of managing our affairs.
The present signs suggest that the bankers of the world are bent on suicide. At every stage they have been unwilling to adopt a sufficiently drastic remedy. And by now matters have been allowed to go so far that it has become extraordinarily difficult to find any way out. In Great Britain we have gone some way towards solving our own problem by abandoning the Gold Standard, but, unfortunately, we have only made matters worse for countries still adhering to it.
It is necessarily part of the business of a banker to maintain appearances and to profess a conventional respectability which is more than human. Lifelong practices of this kind make them the most romantic and the least realistic of men. It is so much their stock-in-trade that their position should not be questioned, that they do not even question it themselves until it is too late. Like the honest citizens they are, they feel a proper indignation at the perils of the wicked world in which they live,—when the perils mature; but they do not foresee them. A Bankers’ Conspiracy! The idea is absurd! I only wish there were one! So if they are saved, it will be, I expect, in their own despite.
THE BABE
PAUL GALLICO
FROM MAY 1932
There is, in all Christendom, no other figure quite like the great, ugly baseball player, christened George Herman Erhardt, who is now known
as Babe Ruth; and there is no other nation on the face of the globe better fitted to harbor him, cultivate him, and for that matter, actually bring him into being, than these goofy United States of America.
In France they might call him something like Le Gros Bébé but, then, he never could exist in France, because the Gallic temperament is not suited to baseball. The Frenchman could never stomach a close decision around second or home plate without beating someone over the head with a gold headed cane. In Germany, he would be known as Der Starke Ruth, and his tremendous and overweening personality would be resented or misunderstood. In England, where nobody would ever call anybody Babe, he would probably he known unhumorously as Georgie Ruth.
The rise, the existence, the being of Ruth is purely an American phenomenon, like those other phenomena—crooners, Andy Volstead, the Valentino funeral, million dollar prizefight purses, skyscrapers, peanuts, chewing gum and the freedom of the press. Ruth’s nickname, “Babe”, is so much a part of our national consciousness that the strange message spelled out in letters six inches high across the top of any afternoon paper, “Babe Conks No. 36” or “Bam Busts Two”, is not, as an English or French cryptologist might imagine, a code for “Come home, all is forgiven”, but a very simple presentation of the news that Ruth has hit his 36th home run, and that he has made two homers in one game.
Americans called him Babe, because he looks like anything else but and the sports writers re-nicknamed him the Bambino—also for no good reason, as there is no Italian in him—and then characteristically they shortened it to Bam.
The Sultan of Swat, the Colossus of Clout, the Behemoth of Bust, the Bambino and the Slambino, all mean one and the same person, Ruth, a ball player owned by the New York Yankees, whose extraordinary coordination of eye, brain, and muscle, coupled with an enormous frame and the most powerful wrists in the game, enable him to hit more home runs than any other man in the world . . .
Ruth is an American Porthos, a swashbuckler built on gigantic and heroic lines, a great athlete, a Golem-like monster, a huge, vital, vulgar fellow in whose bosom surge all the well-known elementary emotions and whose tear ducts lie close to the surface. He lives—ye gods, how he lives!—wholeheartedly, with complete gusto. He is one of the most completely alive men I have ever known. He loves to eat, to sleep, to royster and horseplay, to drink beer and play cards with companions, to play ball, to play golf, to swear and shout and laugh. Everything about him is big—his frame, his enormous head surmounted by blue-black curly hair, his great blob of a nose spattered generously over his face, his mouth and his hands—only his ankles are strangely slim like a woman’s.
He talks in loud tones, he laughs uproariously, his voice is a basso-profundo and rumbles forth from the caverns of his chest like Kilauea. His greeting to all is “Hello kid”, and his conversation is ripe, rich and barroomy. He talks like a sailor whose every third word is an oath and to whom oaths are so completely idioms of conversation that they are no longer oaths.
• • •
Ruth is a beloved figure and the greatest single attraction in the entire world of sport. Dempsey simply isn’t in it with him, a statement that will disturb the cult of Dempsey worshippers no end, but the fact is too patent to call for proof. In one baseball season, Ruth draws more people through the turnstiles of the ball-parks than Dempsey has drawn in his lifetime. The Yankees play steadily to fifteen and twenty thousand patrons a day during the week, and over Saturday and Sunday, against opponents high in the League standing, to crowds of sixty and seventy thousand. When Ruth is removed from the line-up for one reason or other, the crowds are cut in half.
The Babe is the only man I have ever known as spectacular in failure as he is in success. His home run is a magnificent thing, a poem of rhythm and timing. The bat meets the ball with a distinctive and peculiar sound all of its own—veterans will say “There she goes,” just from the sound, and the ball, a diminishing speck, soars from the inclosures over the top tier of the farthest stands. A strike-out is just as impressive. Ruth is not constituted to do anything unimpressively. When he misses the ball, the force of his swing whirls him around until his legs are twisted like a German pretzel. Sometimes he swings himself clear off his feet. Every miss is its own guarantee of honest effort.
Nobody ever strikes the Babe out with his bat on his shoulder. He takes three healthies at the ball, andante furioso, each one more vicious and murderous than the last. Each miss draws a delighted roar from the crowd, or rather a grand and public shudder at the might of this man, and a sigh for what would have happened if he had connected.
• • •
The effect of a home run upon an immediate cross-section of any part of the audience is curious and inexplicable. The ball has fled the park. The Babe trots around the base paths with his arms close to his sides, taking little mincing steps on his small feet, and occasionally tipping the peak of his cap to acknowledge the roar of approbation and the patter of applauding hands. Look at your nearest neighbor. You find him acting in a manner that under any other circumstances would call for a spell at Bellevue under close observation. He is grinning from ear to ear, shaking his head from side to side, making strange noises, and thumping the nearest person to him on the back. He is acting like a man who has just been told by the nurse that it’s a boy. He looks into his neighbor’s face to make sure that there is equal appreciation registered thereon. He lights a fresh cigar and settles back in utter contentment.
There are some men to whom has been given the faculty of living all of their lives in newsprint. They have a natural attraction for headlines. These are very apt to become our heroes. Sometimes, like Lindbergh or Tunney they object to the hot spotlight we turn upon them night and day, upon their private lives, their ills, their triumphs, their personal and domestic problems, an illumination which does not even spare the obstetrical chamber. Then we are liable to be impatient with a modesty which we feel is obtuse and selfish, and which denies satisfaction to our besetting sin—curiosity—not minding our own business.
There has never been any complaint about Ruth’s modesty. The only walls he has ever known have been the parallel columns of the newspapers. Even his sins are public and certainly his expiations have been notably so. In 1925 at Asheville, North Carolina, he fell victim to the gluttony that has beset him for years—the gluttony one is liable to find in a poor boy who has never had enough good things to eat and suddenly finds himself with money to eat all he wants. Now gluttony with Ruth is not your stuffy napkin-in-collar, bring-me-a-steak-smothered-in-pork-chops kind. The beginning of the tummyache that was felt around the world was engendered by a wayside collation consisting of nine or ten greasy railroad-station frankfurters mounted on papier-mâché rolls, and washed down with some eight bottles of green, red, and yellow soda pop. Anyway, they shipped him up North on a stretcher, and the whole nation trembled with every turn of the wheels that brought him home. He was tucked into a cot in St. Vincent’s Hospital, in grave danger of relinquishing his hold upon his great, mortal body, and hung between life and death for many days—on Page One. Bulletins were issued from the sickroom. Little boys brought nosegays, or congregated outside the high walls of the hospital, and looked up at the window of the room wherein lay the stricken hero. The presses lay in wait with pages of obituaries, and editorials announced the impending catastrophe as a national calamity. Even in England, the penny papers watched at his bedside. That IS fame. He recovered, he convalesced, and the nation sent a great sigh of honest relief up into the ether.
Back in 1922 Babe had a bad year. He was untractable, he drank, he fought with Judge Landis, the high priest of baseball, he abused umpires, he committed the gravest sin in baseball, that of chasing a fan up the stands. Also, he played poor baseball, although he had just signed a contract for five years at $52,000 a year, the largest salary ever paid a player up to that time.
At the annual dinner of the Baseball Writers Association, Ruth met Senator Jim
my Walker. The Senator was a baseball lover and an admirer of the Babe. He told Ruth that he owed it to the boys of the nation to behave himself. Later when Ruth was called upon to speak, he arose, gulped, and then with tears rolling down his enormous face he solemnly promised the kids of America that he would reform. He swore off drinking (in large quantities). He reformed.