Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1889-08-17
THE CRAzES OF TIE DAY.
THEY ARE SPECULATION, CONSOLE
pArIoN AND DECENTRALIZATION.


Walter weiiman Has IN Interview with
Assistant United states Treasurer wheip-
ley on This suhject--Guiiibiiity Of tho
English Investor.
Especial Correspondencel
WASHINGTON, Aug. IA wave Of
speculation, consolidation and recapital-
ization Is passing over the world" says
Assistant United States Treasurer Whelp-
ley. Mr.. whelpley knows whereof he
speaks. While other officials watch poll
tics he watches finance. He sits where
the beating Of the fiscal pulse Of the
country may be noted with unerring &C.
curacy, where the financial activities OF
the whole world are mirrored. "This
wave, In my opinion, Is one Of the most
remarkable things OF recent times" adds
Mr.. Whelpley. at Is not confined to one
country nor to one continent. Schemes
for organization, consolidation and re-
capitalization Of industrial concerns are
prevalent not only In Germany, France,
England and the United States. but In
Australia, Africa and South America.
The trust and syndicate idea has fairly
taken possession Of tho earth. People
appear to imagine that II fivo concerns,
each worth ei00. 900 and paying annual
profits Of 5000. can be brought under
one management their value will at once
leap to millions and their profits to hun.
dreds of thousands. The craze for this
sort Of thing Is almost as Wild and II.
logical as was tho popular fever to in.
vest in John Laws South Sea bubble 9
century ago."
'lIow do you explain this tendency Of
the timesi"
well, in the first place, investors arc
suspicious Of railway securities. Not
many railroads, in the United States par.
ticularly, are making their usual profits.
There is, moreover, q lack Of confidence
in railroad management. just at this
juncture. when money Is flowing less
freely than before into railroads, and
when there is such a glut of money that
ihLondon per cent. is good rate OF
interest, and in this country our 4 pei
cent. bonds are held at a premium OF 2s,
with New York city able to sell 81 per
cent. bonds at q small premium, the
germ Of the trust and consolidation idea
appears in the formation of big industrial
syndicates in this country and England,
whisky, sugar, cotton seed oil and steel
taking the lead here, and the Bass, GUM
ness and other great breweries across the
water. There were many imitators OF
these trusts. At first the consolidation
idea was taken up by the actual owners
of industrial properties, and syndicates
were formed to control interests Of great
actual value and earning capacity. Many
fortunes were mado in these consolida-
tions, and In very short time the public
was led to believe investment In such
concerns the surest and speediest read to
wealth.
From consolidation by owners, on
purely mutual and thoroughly honest
basis, 1t was but step to consolidation
and recapitalization on fictitious and
exaggerated estimate Of values. So great
has become public confidence in trusts
and syndicates that frauds of the bold
est and most specious character can be
successfully marketed both in this coun-
try and Europe. In England particular
ly there is craze for such Investments,
and when former United States Treas
urer Wyman returned from Europe q
short time ago he told mo 1t was the
easiest matter in the world for q a=couple
Of American concerns that had been
earning little profit, and which had
some genuine assets, to 60 over to Lon
don, consolidate and recapitalize at a
valuation five or ten times their actual
worth.
THAT is just what Is being done at
this time. London is full OF such
schemes from the United States, South
America, Australia, Africa, everywhere.
There seems to be no limit to the English
purse, no end to tho crcdulity of the
English investor. Take the Burmah
ruby mine scheme as an example. The
success Of that flyer was such as to
make Law turn over in his grave and
crack his bones in envy. According to
the prospectus the Burmah Ruby COM
pany had obtained from tho king Of that
country monopoly Of the ancient mines,
from which rubies could be picked by
tho wagon load. Moreover, diamonds
were becoming so plentiful, owing to the
large output Of the Cape mines, that the
ruby was fast supplanting the diamond
as the most precious, most valuable and
most fashionable gem.
This company was capitalized at
G500,00 or s2,500,0O0, In e1 shares.
Subscription books were opened at the
Rothschild banking house in st. Within's
lane, and when Rothschild's clerks came
down to the bank on the morning of the
advertised day they were compelled to
ask the assistance Of the police in getting
into the building, and then had to climb
in the windows by means Of ladders.
Thousands upon thousands Of persona
crowded around tho bank, eager for q
chance to subscribe to the stock. By
noon 81 shares were worth G310 each,
and closed for the day at G35O. II the
capital stock had been fifty millions Of
dollars, probably it would all have been
subscribed for.
"For months the newspapers have been
filed with accounts Of English invest.
ments in all sorts Of American proper
ties--in western lands, cattle ranches,
-four mills, dry goods stores. theatres,
horse car lines, gas companies, etc.
Some of these reports are true, some not.
There is no doubt, however, Of the mag.
nitude Of English investment in Ameri.
can breweries. have seen an authentic
list Of the breweries sold to foreign
syndicates, and the total sum involved
is nearly $50 10000 Two New York
breweries, not large ones, are consolidated
and capitalized at $4,000, 900. A New
Hampshire brewery is put in at SO, 800.
600. Three breweries at Rochester, n.
Y, 60 in at 1900, 900.
"John Smith has brewery which
pays him, say, $4,000 year profit. 1t
is worth probably $3.50, 900. Richard
Roe has a brewery that nays Lin $40 900