The Rock Island Argus. (Rock Island, Ill.) 1877-1885, 1884-04-08
A PEsSsIMIST VIEW.
Lugubrious Remarks of The New
York Sun Financier.
way Down, Prices PrCphesied for
Wheat and Cora THE Foreign
OutI0ek---A Sauin4 Into
the Future.

intense. Orders and return reports OF
purchases and sales could sometimes not be
transmitted for two hours. Meanwhile
prices fuctuated with an alarming rapidity.
The deep interest in Chicago affairs was
WINGED not only by these who speculate IL
grain and provisions, but by everybody who
has anything at all to do with Wall street.
The leading Chicago Spectators believed
that as soon as the funeral march" was played
oct everything would "bob up serenely p
and that April would bring, with cheaper
freight rates. an export demand
and improved prices. They spread
this belief all over the country, and the
farmer.took it up as readily as the banker
and the financial editor 1t began even to
| be argued among the latter two classes OF
men that the gold exports were the best thing
that could have happened as a point would
soon be reached at which grain and pro
| visions would be forced to take the place of
| gold. All this proved to be nonsense, Of
course. Freight rates have been cut in two
| Wheat went down nearly 80 cents bushel
| yet gold continues to be exported while
| grain and provisions still remain without
/ demand. The funeral march" is being
| played still louder in April and to all
| appearance will be played louder still in May
1t is Just as well to put aside all illusions
and TO look the future right in its disagree
| able face. Our wild grain speculation and
| the constant efforts to tighten European mar
| ketS, have caused Europe to look for supple.
elsewhere. To-day English and French
| grain merchants buy futures in Russia and
India. and so short against them in New
| York and Chicago markets 1t is hard tc
believe, but it is nevertheless a fact that
| there is at the present moment a foreign
short interest of over loco, 900 bushels in our
| market. Of coarse this wonderful
| change in the condition OF the
worlds grain market could not have occurred
but for the immense railroad pro
gress made by India. Russia, and Australia
But this progress was not the work of a few
weeks. 1t took years to build up the roads
| which now bring to the spaboard at almost
nominal rates all the wheat grown in til;
| interior. CT the immense continent But VIZ
| did not pay the slightest attention to what
| was going on there. Spread-eagle twaddlt
made everybody believe that America
would always beat the world, and thai
| the world could not live without US
We went accordingly straight aheat
making corners in everything, over
capitalizins everything, and overpro
ducing everything, The result wa
natural. Our sharp practices and corner
not less than cur impudence, disguised al
the world and brought things to such pas
that nobody now wants either our produce
our stocks, or anything else except our gold
One hears. now on every side the question
But where is this liquidation to stop;p Tht
| question IS not an easy one to answer, out
1t certainly looks as if the process must con
tinue till we bring our products down to the
| price of other countries and till we reform
| our system of corporate institutions so as tt
| inspire some confidence in their management
1t IS evident that money is a drug at Il pei
cent, and I per cent. dividend paying stocks
| Ike the Union Pacific and the St Paul, for
| instance, are selling at 20 and so cents on The
| dollar. There must be something rotten il
| the very foundation of the system When
| ali the speculative and swindling directors
are put out Of the Office, when honest re-
! ports Of the working of the company are
regularly printed, and when dividends are
reduced to the strict basis of the earning ca
pacities Of the roads, we shall possibly get
| foreign money again, and if we remain still
| unable to export wheat, we may be able tc
| export stocks and bonds again.
| "That sound investments are as eagerly
sought for at home as they are abroad cannot
| be doubted. The recent reduction of the
| Bank of England rate has not met with favor
| in London financial circles. The Bank Of
England is n present the final store-house Of
gold in the orld, and every country draws
upon that Ink when its bullion reserves run
| IiJIY.ip tba luct TON,
| of the gold reserve of the bank has been ma
| terislly changed Germany has substituted
a gold for silver currency; italy has re
sumed specie payments; and we havt
not only resumed specie payments ant
| imported gold but have kept al
the gold produced here to ourselves Aus
tralia is now drawing mass of gold from
England in return for her wheat and WOO
instead of sending the product of her golC
! digging to the old country, and the out-pu
| OF the Russian mines is either retained il
| Russia or sent to Berlin Under the cir
cumstanees it is not strange that the banl
reserve i'll England should dwindle away
and when the directors sometime ago raised
the minimum rate of discount so as to pre-
| vent further expectation of gold, ant
also to attract the shining meta
| from other financial centers, their action me
with universal approval. Gold was at onct
shipped from New York to London, and even
now with lower rate in England these ship
ments continue Trade, as well as specula
ton, are as demoralized in England as they
are here, and capital, although lending at
very low rate, does not find new channels o
employment. Hence the dilemma in whicl
| the directors of the Bank of England ar
placed. They wish to keep the price O
money down SO that q low rate ma,
foster trade and induce new enterprises
and at the same time they want by
high rate of discount to attract gold to swell
| the bank reserve and keep it up to the limi
prescribed by the bank-charter act, Ii oui
corporate enterprises had not made such
bad name for themselves Bank of England
rates would probably be 6 per cent. now an,
we would have most of its gold here.
"ihose who are anxious to find out wha
the bottom prices are likely to be for grain il
Chicago will probably not make great mis-
take if they put down wheat for 20, corn TO
10, and oats for 20 cents The great mass O
the sales made within the last three week.
were mostly genuine sales of actual property
Speculative short sales were INDUCED in prin
cipally in New York, the Chicagoans being
naturally bulls, and it is not unpleasa t
say that New York has badly beaten Chicag
this time. The peculiar beauty of the gam
was that the fluctuations were so rapid tina
the covering could often be done with
few hours Of the sale. The consequence wa
that there was never any large short interes
outstanding and no danger of squeezfs."
WHAT PAYNE SAYS.