Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-11-20
CORPORATE KITE FLYING.


That aspect of the recent stock squeeze
which hit Henry Willard and his magnif-
cent edifces-in the way corporations with
immensely imposing capitalization ami very
little real investment shrink in q panic-is
especially interesting and instructive.
There is a great deal about Mr.. Wizards
fnanciering calculated to call out tolerant
admiration. His genius in the way Of get
ting together an unrivaled collection OF
speculative cats and dogs, and by capitalizing
them under a corporation with q new kind OF
name. erecting glittering fabric of credit,
is something phenomenal even among the
fraternity of stock infaters. But an even
more exceptional feature of Mr. Wizards
genius, and one which almost reconcilss his
victims to him, is that for getting caught in
the collapse of his own bubbles. Jay Gould's
process of getting worthless property in
shape TO float on the unsuspectlng public is
slow and painstaking beside the dashlng
achievements of Willard in the same line;
but his finale to every such work of art, In
the form of quietly unloading and getting
his profits safely in bank before the drop
comes, is almost as certain as the
two proverbial certainties, death and taxa
tion. Mr.. Willard, on the other hand, while
floating his bubbles with dash that leaves
Gould far in the rear. sticks to them till the
catastrophe comes down in the general
smash, and then gets on his feet again, with
a gallantry that almost indicates the belief
on his part that his attractive balloons are
real and solid values.
The especial product of Mr.. Wizards art
which came down to the hard earth with
crash this time was the North American
Company. This is one of those peculiar
corporations whose charters are turned out
to order by the New Jersey Legislature to
permit corporate capital to do whatever its
widest dreams may have conceived in the
line OF kite flying, combining or monopo-
lizing all classes of corporate investments.
Pennsylvania used to do a little something
in the way of turning out special charters
to order, which lett the corporation at lib
erty for anything it wanted, from building
railroads or running a natural gas line
down to running a bank, bucking the oil
market or dealing in hides and tallow. That
business was cut off by the constitutional
prohibitions; but New Jersey has been more
than taking the function by inficting the
country with a brood of corporations of
which the North American Company was
the first, but is by no means the last one.
A New York financial writer says the
North American Company was organized
simply for gambling purposes. The fact
that its officials could buy, sell, hypothecate
stocks, bonds, railroads, electric plants or
terminals, gives good deal of color to the
statement The fact is that these broad
gauged and unlimited corporations are de-
vised simply to permit of the creation of
values out of the real or supposed ability to
combine the control of number of other
corporations. 1t would not answer the pur-
pose to let the stock of the various corpora
tions remain in individual control, because
that might result in running each corpora
ton for its separate interests and would
utterly fail to erect on top of them all a new
edifice of corporate values, on property al
ready capitalized to two or three times its
real value.
While the North American Company sue
ceeded in temporarily adding some tens of
millions to the total of purely fictitious
values, the bubble was so easily pricked
that it is comparatively rather harmless
example of the utter untrustworthiness of
Mr.. Wizards favorite methods of wholesale
financiering. Its shares were marked up
into the ffties, but at the first touch of ad-
versity they came tumbling down to z,
price that much more nearly represents the
real values. 1t was doubtless intended to
monopolize all the subsidiary branches of
profit along the Northern Pacific road; but it
did not, as some other of this New Jersey
charters are intended to do. establish
monopoly which could extort profits from
the public, for any permanent period. 1t is
simplya case of kite flying on so magnif-
cent scale as to leave Mr.. Wizards pre-
vious blind pool achievements wholly in
the shade, and its rise and fall have both
been so striking as to almost beggar the
Imagination as to what that meteoric fnan-
cier will do next in order to keep up his
reputation.