The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1881-08-19
WATERED STOCK.

The New York stock exchange would
now and then be dull as the grave if
Uncle Rufus Hatch was not on hand
to stir 'em up little. Hatch is some
thing of curiosity. He is speculator,
like the rest of the capitalists on
Change, but he has at the same time
acquired the reputation of being a phil
osopher. When he has an interview
published, or writes a letter to the
newspapers, it is with an object. At
present he is bear, and therefore a
member of the syndicate of liars"
which the World bull bellows about so
much. If he belonged to the "syndi-
cate" of bull "liars" his character
would be no better, his philosophy
would be as keen, but his comments
would not be so lugubrious and per-
haps not so truthful. Uncle Hatch has
teen talking about the extent to which
few leading stocks have been watered.
There is food for thought in what he
says and still more in what he hints at.
Having quoted the prices of July 80
for the last four years, Mr.. Hatch goes
on:
The stock of the Rock Island road
has been doubled; also that of the
Louisville & Nashville. st. Paul has
recently issued $5,00O,O0O of new stocks
and 100000 of bonds, as reported in
the newspapers. Wabash preferred
was not heard of in 1879, yet they have
since issued what is known as a blank
ct mortgage of $50,000,000 and an in
definite number of millions of preferred
stock. The Manhattan Elevated, all
bad water, probably the biggest swim
die that has ever been perpetrated ON
the New York public, according to
the statement of the Attorney General
of this State in open COURTS perfect
ly worthless. New Jersey Central has
been in a receivers hands for four
years and is there to-day. 1t recently
issued $5,0O0,0OO of bonds. Whether
they are to take up old bonds, or new
issue, is an unanswered question.
Northern Pacific was not quoted in 70.
1t is now said that they are issuing
bonds for their preferred stock, and are
also issuing bonds for every mile of
road that they have built and are build
ing. The query is, how many have
they already issued? Western Union
divided some 100000 of new stock
among the stockholders in 1880 and
$15,5O0,o00 more since February, 1881,
all without an equivalent. Whether
the SIS, 100000 is legal issue is yet to
be decided by the courts.
Some of the operations which Mr..
Hatch refers to are legitimate, because
carried through in good faith and war
ranted by substantial increase of bus
mess. Not every increase of stock is
water But the instances are compar-
atigely rare of large corporations put
ting their hands into their pockets for
the money to enlarge their facilities.
The rule is either to capitalize surplus
earnings, -earningS made by charges
upon the public over and above what
are necessary to yield fair dividends,
or to put forth new stock through
some legerdemain of bookkeeping or
other hocus pocus.
Aside from this evil, the rapid and
almost unprecedented expansions of
must excite uneasiness.
The story is not unlike that of 1878.
Uncle Rufus thinks the bubble in
Wall street is nearly ready to burst"
This would be small evil compared
with the bursting of the bubble of
business imitation which is rapidly
to embrace the whole country.
That the money basis of business is
specie diminishes the danger; it does
not avert it. Wall street bears are not
the only prophets of evil ahead. There
is force in this statement which John
Thompson, of New York, the oldest
of the Bankers Association,
made in the convention at Niagara