Evening star. [volume] (Washington, D.C.) 1854-1972, 1883-05-16
THE FINANCIAL WSHLD
1he Long "Bear,, Movement WIN
esecks are Depressed The Crops
Govern the Markct-Whas the Future
Promises.
from the New YORK Times.

week In Wall street have been the trunk line
stocks. BY this term is meant the Vanderbilt
properties. II is true there are five trunk lines:
but neither the Grand Trunk, the PENNSYLVANIA
nor the Baltimore and Ohio stocks are listed on
this market; and Erie stock being regarded as
having merely a speculative value, is not seri-
ousiy considered when the trunk line stocks are
discussed from the standpoint of present or
prospective earnings. Certain classes of its
bonds are. The trunk line stocks therefore.
mean New York Central. Lake Shore Michigan
Central and Canada Southern-a parts of one
great line stretching from New York to Chicago
and parallel to both the north and south
shores OF Lake Erie The movement OF
prices has been downward and it Is
feared that they have not stopped going
down. New York Central had been decfin-
Ing before Mr. Vanderbilt announced his retire
ment; it declined still more when 1t was an-
nOnnced; has gone on declining and the whole
market has followed IN sympathy DESPITE the
strenuous efforts made to hold it. This is not to
bctaken a indicating awant of confidence in the
very capable men who have been placed in con-
troll of the Vanderbilt roads since they are well
Known to have been their managers for two or
three years past 1t means that Mr.. Wander
Dir retirement has been accepted as tlG ,i,:u
That the time has come :-ir-n radical read
Justment E--.--o DC Made in the relations of the
Hvyefal trunk line systems TO each other and to
the new road recently completed or now ap-
preaching completion, which sprang into being
out OF the abundant prosperity of tine years 1879
ana 1880 1t IS evidently feared that this read
1ustment may not be effected without serious
trouble. Mr.. GOulds recent public utterance
that 1t had been warm between the trunk lines
IN the past, but it wonld be red-hot in the
future, has not tended to allay this feeling.
MAN, FIRST OF ALL, MUST EAT.
Every one in Wall street. other than the mere
'tape man" knows that speculation Is governed
By the crops Man, first of all, must eat Give
him plenty of food. and give it to him cheap.
and the rest will be all right. There is no need
to inquire anxi0usly about the manufacturing
business Ii we have abundant crops meaning
abundance OF bread and meat the workers will
work. and the diminished cost of living will
leave an augmented surplus of money for invest
menf. 1t Is the surplus which is invested. and
Investment Is the basis of speculation The first
sign OF exhaustion i'm Wall street is the declining
business OF the bond market. II was so In 1881
Following the panic of 1873 we had poor crops
This means hard times in q country which makes
Its money principally by the amount of bread
meat, ana cotton 1t sells to other countries 1t
Will easily be seen. therefore, how vital is the
r. crop question In Wall straet and why it should
be so keeniy discussed there. In the dreary
years 1875. 1875, and 1871 when Wall street he
came something like bowling waste and
brokers went about trying to raise S. COO ON
their seats in the stock Exchange which have
since found EAGER purchasers at go 600 our ex-
ports were tgOld value3) 5ig9 900 coo S525 600
GOO, and S5SJ.o0of Nt Then began fmnroyr-
ment. They were st9S COO 600 In 1879, SS93.-
cO0,oGo IN 1850; and $3.50 100000 i'm 1881.
(Flgures FOR the government fiscal years ending
June 500 1t was flush times in Wall street
when We were selling over the national counter
those S5-3.0d,cV0 of products and pocketinr
the goodly profits on them; and they were large
profits, for the crops abroad being deficient we
were able to get high prices for our own album
dant ones. There never was such a wear In our
history before or since. The earnings of the
railroads were enormous. The northern roads
were gor@ed with freight, and freight blockadcs
az central points were of constant occurrence
FIFTY trains q day passed through Syracuse on
the New York Central. Prices in Wall street
rose eorrespondinglY. New York Cen
traf touched I55; Lake Shore 49,.
Michigan Central l26 Canada Southern
earned a small dividend for the first time in its
existence and rose to 80. Rock Island was up
to AZ; an extra dividend in Chicago Burning
ton and Quincy sent the stock up to 1S2; Union
Pacific rose TO 100; Denver and Rio Grande was
1reey bought ut lie: Louisville and Nashville at
lV; jersey Central rushed up to l12 on a story
that Mr. Gould had bought it: the Western Union
aeai carried that stock to 1877; even Wabash pre-
lefreu rose To ~ on the strength of paying q
per cent dividend, every cent OF which was sub
sequentiy discovered to have been borrowed
Ali the faftle-traps of the stock market rose to
the Ike inflated prices. Nothing was heard but
plans Of new railroads. extensions of old ones.
presentations, consultations stock dividends
bond privileges aud the like In these times
We're started. among many Others the Nickel
*
awaHna extension to Buffalo, and the Chicago
ana Atlantic. which now carries the Erie into
Chica@o-projectS which have in less than three
years added about two hundred millions of new
SECURITIES 10 the amount upon which interest
and dividends are to be earned by the traffic
between here and Chicago.
Less IN ExPORTS-RAn.wAY EXPANSION
IN the midst OF this great prosperity the shock
came The winter of 1SS0-S1 was unprecedent-
eddy long and severe; the spring was disastrous
70 the winter wheat and almost DESTROYED the
crop; then came a summer drouth and burned
up the corn and the cotton President Garfield
was asSassinated, and the event seemed to take
away public confidence in everything Our en-
ports for the year ending June 80 last. which
would represent the crop of 1881, were
$133 COO 0tO-that Is We suffered direct loss
Is compared with the year before of S1O6 COO Coo
Inc railroads. being short of business fell to
cutting rates on each other to get it. and that
LED TO the fuin0us rate war. Speculation was
Knocked on the head by such sudden blow as
that But the difficulty that We were left
WIN all these railroad projects on hand and
that has been the depressing Influence On Wall
street ever since The country was in the posi-
ZION OF a manufacturer who when buiIding
VAST additions to his factories to accom-
modate his rapidly growing business il
caught by q sudden turn of affairs which cnts
his business down to an amount scarcely enough
10 pay Interest on the plant he had before Rail-
read men say that tine natural growth of the
nve and six thousand miles of railroad every
year; but the Astounding prosperity of our flush
times carried us into last year with contracts ON
nand calling for the building of over eleven
thousand miles of road, costing in actual cash
Outlay sD.Oi0 per mile. OF a total Of 1920 co.,
w. 10 go on was hard, but to stop with the
WORK unfinished vas disastrous. The eleven
thousand miles were built and the problem now
Is now paying business shall be found for
ITEM, and the old roads as We'll The roads i'm
tne more remote sections, where immi-
grafton Is hliing up the land, are no
special burden. for they are cheaply built
put the expensive roads in the older sections,
those, for example, between New York and Chi
c&go. which cost for one mile as much as would
onild ten in Dakota-these are the incubus on
thc stock market. Consider the Nickel Plate
parailein9 the Lake Shore-it Is stocked and
bonded at the rate of s152 600 per mile The
unfinished West Shore road has fifty millions of
bonds, to say nothing Of stock which is vet to
be issued. 1t parallels the New YORK Central.
which has to earn interest on forty millions of
bonds and dividends on ninety millions of stock.
The Lackawanna extension parallels the Erie
Where Is the business 20 come from to pay these