The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1877-07-12
The ShrinEage in Baltimore Il
ohio Stock.


The shrinkage in the value OF railroad
securities during the last two months has
been astounding, and the only wonder is
that there have not been more CONNER
cial failures than have yet been reported.
Take the recent "bear" movement against
the stock Of the Baltimore & Ohio Com.
pany as an example. As everybody
knows, II great deal Of the stock OF this
Company is owned in Baltimore by capi.
talists, merchants, and even by people OF
limited means, who have invested their
surplus earnings in stocks which they
had every reason to believe were both
solid and remunerative. There are many
instances in which the entire available
capital Of business men is represented by
these stocks, and they are carried to bank
and deposited as collaterals whenever the
holder desires to borrow money. The
business man whose accumulated profits
amounting to $4,000 had been invested
in Baltimore 4 Ohio shares supposed
himself to be worth $4,000, clear Of all
debts, on the lst day OF July, 1876, when
the stock was quoted at $50. All his en-.
gagements would naturally be made upon
this basis. II he desired to increase his
stock in trade, or to buy a house or farm,
he would rate his ability to pay for the
same not at the face value Of his stock
$4,000, but at the selling price (sl5,000).
II the cash was demanded he would
take his stock to bank and hypothecate it
for sum approximating $4,000. As
long as the stock was worth 81 80 he was
safe; all engagements could be promptly
met and the ten per cent dividend which
he was receiving would more than pay
the interest on his other Investment. On
the 4th OF July, 1876, the man was sol.
vent and able TO pay every dollar he
owed. But what was his condition on the
lat Of July, 1877? His surplus capital
had melted away, not through losses sus-
tanned in his business, but by the shrink.
age in the value OF the Baltimore and
Ohio shares. Instead OF having $4,000
TO meet his engagements on July lst,
1877, he had only $4,000. II pressed by
his creditors he would be obliged to make
up the difference by sacrificing his prop.
erty. When we remember that large
number Of people in this city and else
where were in the position Of the stock
holder whose case we have used in illus
tration, il seems surprising that there
was so little disturbance OF the usual
course Of business and so few failures.
Probably ten millions Of capital, owned
in this State, suddenly shrunk to six or
seven millions, and yet there was no wide
spread disaster.
This shows conclusively that the bona
fide shareholders were stronger than the
stock.gamblers, and that they refused 10
be frightened by the hue and cry raised
in New York. II the stock held by banks,
insurance companies, trustees, guardians
and private individuals in Baltimore had
been thrown upon the market las the
New York spectators hoped it would
be), there would have been such panic
as has not been since 1873. 1t isa fortu.
nate thing that great portion -ol the
Baltimore & Ohio stock is held by per-
sons who are not obliged to sell, and who
can listen to the beating OF the tom.tom
in New York without feeling the least
twitching Of nerves.
We do not suppose that the Baltimore
& Ohio stock will ever again be sold at a
premium OF eighty per cent; in fact, we
do not think that it is desirable that it
should reach so high figure. OF course,
those who bought at $50 would like to
get their money back, but ii is much
better that they should pocket their
losses than that The shares should be put
up to a price that can be run down 100
per cent under the influence Of q panic.
With the sharp competition between the
great railroads for the carrying trade OF
the west, we do not think that any OF
them can legitimately earn ten per cent
dividends for their stockholders. II the
best OF them divide six per cent per an.
mum, meet all their obligations and put
something away for the redemption OF
their bonds at maturity, they will be
doing exceedingly we'll.