The Greenville times. [volume] (Greenville, Miss.) 1868-1917, 1890-12-20

IN tue buenoS Ayres Herald. Of this
morning: '0ver-Yaluaiion.-It is no
secret that speculation in lands has
been melted and fomented by the
facilities for borrowing. especially of
Cedula issuing banks, both Provincial
and National, but largely aided latterly
by private corporations. Il has be-
come a constant practice to place a
widely fictitious valuation on property,
going SO Ear As Stimulating figures at
sales far in excess Of the value of the
property and, on this basis approaching
lending concerns with an application
for a sum naturally far in excess of the
supposed half value to be advanced
thereon. We could point out cases
where such practice has been carried
out to the point of lending the full cost
OF property and improvements, and
leaving in the hands of the borrower
handsome surplus, SO that he could
afford to abandon the property to the
creditor, and still make large profit.
This generalization has reached the
point ofa chronic disease,a "A great danger
10 the institutions involved. The facts
touching the case are simply shocking
to all business conservatism aud finan-
eial morality, the generalization in
some cases having been enormous, and
some fine day there will come an
awakening and a convulsion which
sstonish those even who are prepared
for sensation
"The mania for joint stock companies
with untold millions of capital is thus
referred to by the Buenos Ayres
Herald: The Company Craze.-Ten
years ago il would have been in vain
that one should have tried to organize
joint stock company in this city for
anything, no matter how sound and
profitable. One or two gas companies,
an insurance company aud bank
comprised nearly or quite the list of
local companies. We had then, as we
have now, many capitalists, but they
looked with no favor on corporate
associations, and SO 1t came about that
any one having in hand any such un-
dertaking would hasten to Europe
with it, not thinking to waste time In
trying to do anything here. The change
between that time aud those conditions
and the present is simply marvellous
Tho reaction from that overcaution
has carried US to the other extreme of
unlimited recklessness-to the point
of disease, veritable stock jobbing
delirium. Now there is no scheme or
company so wild that its shares do
not find takers and speculators to
operate. So fast and so furious is
their coming that probably not one of
our readers could enumerate half of
those which have been organized with
in a year. The most absurd schemes
are set forth with fabulous sums for
capital, which the utmost success pos
sible could not give returns which
would pay one per cent. per annum.
The end of the epidemic is not difiicut
TO anticipate. Ii will be crash, and
then chaos. There is no escape nor
salvation from this. Many who un-
derstand this are In the swim, and
think to unload before the day of
doom dawns on some one less shrewd,
but when the beginning Of the end
comes there will be great number of
these shrewd ones who will get caught
aud crushed under the ruins"
Four months later Mr. Baker found
things going from bad to worse, and
wrote again TO the State Department
as follows:
an the matter of the persistent is
suing of cedulas by the mortgage
banks depending ON the public credit
for the value and circulating power,
there is no doubt that they have ex-
erted no inconsiderable influences in
not merely weakening the credit OF
the Nation and of the provinces under
whose auspices they are put upon tho
market, but also in initiating the prices
of landed property beyond what was
genuine or actual, thus stimulating an
overweenlng tendency to speculation
and offering opportunities by all sorts
of sharp devices for desperate ventur-
ers to get rich suddenly on loans and |
credits without the outlay of capital.
The value of such property, estimated
in paper money, has gone on increas-
ing in all adverse ratio as the paper |
money deprecated in value, and In
many cases the prices have increased
five ten and fifteen times for the pur-
poses os hypothecation, the mortgage
banks thus issuing codulas upon 1t at
the increased valuation, when, If
brought to forced sale, to which
much of it will probably have to come,
the prices would not meet the face of
the cedulas.
@Indced, we begin to observe
shrinkage in prices already in nearly
all descriptions of stocks, bonds and
securities. Some of these, which were
booming Oh the Bolsa short timo ago,
are now scarcely quoted at all, while
the very best-even National bank
shares--have gone down over 100 per
cent. The last issue of Provincial
cedulas are quoted at 62c to the dollar
The failure of the great firm of Bar
ing Bros. completes this history. The
theories of the Farmers Alliance, as
practically applied by the Argentine
Republic, wrecked that great financial
institution, and but for the prompt
assistance of the greatest financial
agencies in The world, the Bank OF
England, the Rothscllilds, the Bank of
France, the Bank Of Scotland, and
many private concerns of less note but
of great strength, the financial pros
perily the civilized world would
have received shock from which il
could not have recovered in years.
The controlling cause of the Barings'
downfall was their guarantee of Argen-
tine securities. The collapse so long
expected, and which was inevitable
from the Government guarantee Of its
immense loaus to citizens upon values
of every kind, inflated, fictitious aud
otherwise, fell on the house of the Bar
ings, ana wrecked it.
The latest information from London
in regard TO this tremendous failure Of
the Barings shows its extent, aud the
influences which its guarantee on the
loans of the Argentine Republic had
upon its fortune. II now seems that
in addition to the S75,000,000 con-
iributcd from the influential sources
already mentioned, the Rothcbilds