, 1873-09-29
THE 4HNINKAGE IN STOCKS.

the shrinkage IN value Of HtocAs and bonds,
mostly railroad securities, which has occurred
Hinco Sept. 4, or, practically, during tho pre-
vailing panic in Now York. Tho shrinkago on
active stocKs-that Is such Btocka aB Western
Union, Eric, Harlem, Northwestern, otc-is
placed at 9i,535,65i, which represents the
difference botweon thor curront or quoted
Valua on Sept. and TINT Of Sept. 90 The
ghrlnkage on stoclka not active, that ia not regu-
larly quoted on tho Now York Stock Exchange,
ia estimated to havo been s25, 900, GOO; and tho
sllrtlskago on bonds, not including State or
municipal bonds, ut a75,o00.oo0. Tho total
estimatod ahrinkage within two wooks is about
5000, ,000. 600.
The decline in the market value Of speculative
atocks and bonds is undoubtedly ono of tlc
main Causes Of The original furry in tho financial
circles Of Now York, which has nccdloss1y and
unreasonable infected business circlos through
cut tho country. Admitting that tho above osti-
mate is substantially correct, aud that tlero Inns
boon an actual shrnkago Of 1900, ,Oo0, 900 in tho
market vaucs Of railroad ntocka and bonds,
what real Significance has it for tho commercial
interests Of this country? How can 1t affect tho
actual values of material property? 1Ias thoro
boon any substantial losH to tho country through,
this Bhrinkngo7 4 littlo reflection will suggest
al answer in the negative. There aro just too
ways In Which tho shrinkagc can DO accounted
for, aid botl aro to q certain logrco responsible
forit. In tho first pace, all tho stocks aud bonds
on which there has boon naterial sIarinkaee
havo been quoted and exchanged Mt fictitious
value, lkoly to bo affected ono way or the other
by fluctuations in tho value OF tho currency, By
combinations of spectators, by political Mt
tacks such AZ the drangos Ind inauguratoi, and
by variety Of cauaos that stimulate or deprcss
fancy values Of MI kinds. a largo proportion of
tie stocks On tho market wore watored Btocka,-
that is, certificates Which represented no actual
property. lii my combination of circumstances
calculated to reduce stocks to tho actual value
Of tho property they represent, watcred stock
becomes absolutely worthless, and tho
stock with which it is associated Inns to
boar reduction corresponding to it's fictitious
valuo. 10 tho oxtont, then, TINT tho fictitious
value has been takon away from atooks thcro
has been 10 real loss for thore was nothing to
loao. Tho grcator part Of tho estimated shrink
ago is to bo accounted for in this way. Tho
residue has boon occasioncd by tho anxicty to
convert fancy stocks into something Of moro
substantial value When tho alarm Of O panic
waB sounded thcro WIS universal tendency to
nnload, and there is no doubt that aomo Of the
stocks woro sold much below tho actual yalue of
the property which they represent. Such trans
actions represent meroly an individual 1oss BUS
tainad by loldera Of stocks who preferred to
sacrifice como roal vauo rather tlan itlcur tho
risk Of moro serious depression, or impol1cl
thoreto by necessity for currency to
meet liabilities. But, eycn If the cortin-
catoB have deprociatod in aome caaeB below
the value Of tho property thoy represent,
thoro Is still uo losH Of tho property itself.
Mother the intrinsic val,,o Of railroad property
nor it's capacity for business LAS boon afroctod
by n depreciation Of its stock ip the hands Of
apecu!ators.
The roal mischief Of this sllrinkage lies in tho
fact that both tho spcculators aud tho baulsa
which loaned tholn the money Ind contracted
obligations basod upon these fictitious values.
Ihe maru;tuda os thoao ao;1v tro,aaot;,,, :,
shown in tho following statemont from t1,c Now
York Times mouoy articlo:
Tho Last Of tho brokers' chocka cleared on Nor-
day Of this week. when the toal clearnga fcll to $685.
nm nm ta ,norn,, - "a s.s ~, nv mn ol % ,e.. 10
therefore, rccura, ta II ras,t tint after tho STOCK Ex
chnngots reopeued, thu Associated Banks should lin
rorSv or ss oa mn ~ sao ooo nna are
Tho prevailing fecg nnloug prudent people OIL tho
atreet is that the sooner they resign tic md
~ sn mn mn ner Inv ,r .o " s.a.
tho sooner the lu.!vr will provide other ea,s Of cIvar.
lug among themselves, ehor BY buying and selling
a,a,,''a ~, w., sa;,1. ,,sa, ss W. su' e.