Huntsville gazette., 1884-07-05
A QUESTION OF THE HOUR.

The Lessons Taught by the Recent Collapse
of Wall Street Operators-The Question
able Methods of Mod ern Banking-Better
Safeguards Needed for the Savings of the
Honest, Non-Speculating Peopie-Sam-
pies of Stock Operators Methods.
NEW YORK. June 80.
The Sun in its article on Wall street
in its issue this morning says: "The
terrible liquidation apd shrinkage of
stock exchange values during the last
three years ought to have done great
deal of good to people of this country.
True, the losses were immense, but they
carried salutary lessons. The eyes OF the
nation have been opened to the practices
of banking institutions as wen as of joint
stock corporations. If the law givers of
the country do not take any steps to
remedy the existing state of affairs
it will be the fault of public opinion and
the press. Facts are disclosed every day
which show that the subject can no
longer be handled with kid gloves. The
most searching investigation ought to be
ordered into the condition of all institu-
tions which hold savings of the people,
for however high-handed the proceeding
may seem, nobody can object to it as
s'unprecedented." Directors have been
acting for years in manner cum
precedented not only in the
history of this country but
of the world, and must be paid in the
same coin. There was nevera time when
men like Hewitt or Randall had a better
chance to secure for themselves the
brightest pages in the history of American
legislation There never was a time
when man like Ben Butler could do
more for the spread of his horse-sense
popularity with working people. Though
the saving masses are as rule ShreWd
and Intelligent, their shrewdness
does not extend beyond their particular
branch of activity. They are helpless
when it comes to the question OF the
public investment of their savings and
somebody must take care of them. This
can only be done BY the Legislature, TO
which ample proof is now given that
radical change must be made if the credit
of the country is to be maintained
abroad and confidence is to be restored
at home. The relation in this
country between bondholders and
stockholders is unparalleled in any
other. The practice of building
railroads with bonds is the cause of most
of the existing swindles. The roads
ought to be built exclusively by and for
the stockholders. If in the course of
construction, or on completion, the pro-
prietors wish to make improvements, and
choose to mortgage their property instead
of paying an assessment, they must be at
liberty to do SO, but bonds should
never be other than income bonds,
with an amply provided for
sinking fund. The very word divi-
dend means division of net proceeds,
which is quite different thing from in
terest. But majority of people do not
seem to understand this difference.
Strictly speaking, no dividend should
ever be paid to stockholders as long as
there is a debt upon the property No
honest merchant or manufacturer will
ever think Of dividing any profits with
his partners when the concern Isl
debt. But of course, as bonds have
to be issued for certain
length of time, and the debt cannot be
paid at will of the debtor, there may be
circumstances under which particularly
prosperous concern would be embar-
ra> sed by the eurpIus of accumulations i'll
It's treasury. But that could easily be
avertcd by the system of issuing bonds
subject to calls similar to that In force
with the Government. AS it stands now,
bond-holders have all the power and
stock holders none. Any man who goes
into Wall street pays just as good money
whether he buys stock or bonds, yet the
buyer Of bonds can any day make a
beggar of the buyer of stock by adroitly
working the directors and foreclOsing the
mortgage. AS everybody knows, there
has been a great deal of foreclosing of
late. The condition of the street, as it
appears from day to day, does not call for
comment. The market is professional
one, worked by sheer manipulation, and
the best thing for intelligent men is to
leave it alone.
Another big squeeze of the imprudent
bears took place Friday and Saturday,
but that can not interest anybody except
those who got squeezed. The Squeezers
themselves could not have made a cent.
They are simply trying to work off the
contents of the big bags they hold. The
latest story is that Vanderbilt and Gould
had an interview with Woerishoffer on
Thursday and gave him at low price all
the stocks he was short OF, and thus Sc
cured his support for q bull campaign.
If this be true, Mr.. Cammack end
number of big Philadelphia bears
must nave tuTucu IOO, anu III SuCu CdSc
there would be nothing surprising in
temporary advance of prices. But the
ultimate result will be the same-fur
ther liquidation. The reputation of the
Stock Exchange for uncommonly fair
dealing seems to be ''petering out" Dur
ing the week two cases occurred which
look like sharp practice. Kuhn, Loeb
Co. sold out collateral which they had
received for loan, though the persons
obtaining the loan notified the firm that
they would put up more margin, and
were, in fact, on their way with
the money when the sale was made.
The question will be tested in court, but
the case is worthy of attention as show
ing the want of confidence which exists
in Wall street The other case, the sale
''under the rule" of stock, which Mr..
Hudson had been instructed to sell
"quietly," is somewhat different,
though some people go so far as
to say that a speculative member of
Mr.. Hudson's firm used the order to
sell the market on.
Bohemia's Day.
BELLE PLANE. Ia. July /.
Yesterday was one of interest to the Bo-
L a. int