Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1891-11-19

! HliHSHip II Indnce, oy lion Z. W. Pee
pies, president Jackson bank. Jackson
! Miss: topic for discussion, rs it Practica
bic to have National Rate of Interest y
| Mr. Gibsou's speech was as follows:
| Now, am al once met with the possible
| criticism that Wall street is merely the sea-
| OF an unprocuctiye. useless and iuiuriou.
! speculation. want Tor an instant to debate
| this point. 10 see whether the common
| judgment OF minimizing people NAV not dc
an injustice TO this portion of the financial
| mechanism. Large undertaking REQUIRE
| large capital. and to accomplish great indus
/ trial results it is necessary to mass capital
| The fortune of no Individual would he am.
| pie TO set IN motion the forces which have
| produced the pGodiCiouS results of modern
| material civilization. The subdivision OF
| the title of ownership of such great engines
| OF progress as manufacturing. shipping,
| mining, banking. trading, telephone. tele-
| graph, cable water and gas companies is
indispensable TO their organization and oper.
alton
About forty years ago the application of
the principle Of limited liability was applied
10 corporations, anu men found that thew
could employ portion of their capital in
undertakings which were rot Immediately
under their control, and for the success of
Wnlch they were not willing to leopard
their entire personal fortunes. This method
resulted in the formation of an immense
manner Of financial. Industrial and CONNER
clal purposes. II was necessary that there
should be some common market place for
the shares and deOentures of these corpora
'LOHS, ana The stock exchange naturally be-
came the common ground upon which buy
ei's and sellers OF such obliS atoms met In
view of the tact that the success of these
corporations depended upon a great variety
OF influences, 1t Is natural that there should
be much huctuation Of feeling concerning
the profits which they may hope to return
TO the holders of their securities. Ind vid-
uals naturally make different estimates Of
The Importance of given events they make
different forecasts as 10 the future: they
nave different ideas as 10 the state of seuti-
meut regarding these enterprises. all of
which factors unite to make u sensitive ard
EuctuatIng market Tor the shares. Ind bonds
OF such of these corporations as may at
tract The attention ana operations OF nu-
merOUS dealers.
The principle of speculation is inherent
IN all business; il IS, indeed, but another
name for foresight and progress. Ii ex-
presses Itself perhaps more quickly and
pdlpaDly In stock exchange than IN purely
commercial circles, Just as Il wave of heat
registers Itself more que KY On a bulb OF
mercury than upon 4 bar OF iron; but the
heat IS there exactly the same in both
instances. The merchant endcaVOrs to
read the future and prepares himself for it:
the manufacturer sells MS goOGS in advance
OF their production: the contractor agrees
10 build house before he owns a plank or
board or major TO uild railway before
he buys crOSStle. Il r.il, or 4 shovel; the
cotton manufacturer sells the Shee:ing, and
the iron manufacturer his steel rails before
the cotton is grown or the ore extracted
from The mine; The importer il the city,
and the retail dealer in the country town.
equally according 10 his means aud his in
1orMa,ion, buys more goods before an ill.,
creased tariff goes into effect than he would
Dry 10 meet his ordinary demand. UnfOr-
tunateiE for them. however. they are not
always successful III their endeavor to FORE
S.aL commercial events and conditions.
The farmer who markets only enough of
his wheat or the planter of his cotton 10
meet Immediate cash necessities. and with
holds the remainder because he expects
higher prices Tor his product and not be-
cause he wishes to consume such surplus. is
morally as much Of = Spectator as the per
son who. also with view Of reSellng. tries
TO buy the farmers wheat or the Planters
cotton at current prices.
The Bank O. England, that Gibraltar of
watch occasionally goes into
the London money market TO borrow on its
COnsUls for The purpose of StifTening the
rate for money by absorbing the supply of
IoauaDle funds, performs speculative act |
Us dis.inrtively AS Nanderbilt.a large owner
Ji Lake Shore, would perform II he went |
into HE stock exchange and purchased all |
Of that stock floating on the market in order |
to create highe" quotations and better |
market.
The man who buys a railroad stock or |
bond because he believes the traffic along |
the line Of that particular railway will be |
large and remuneratlVc, exercises precisely |
the same kind and quality of business iudg- !
Ient that the real estate dealer exercises |
when he buys farm land or city lots. in an
-Iclpatioa OF better demand for breadStufs |
u increased building accommodations But
{ Is said that Wall street goes further than |
his aHd sells Stocks ShOTt-as if there were
nvotTed III this a principle not present in
rreaJer or less degree throughout the en-
ire commercial world. Of course one can
rot sell an individual piece of farm land or
IN individual city lot short by reason of
physical limitations, whereas he can 90 |
hort Of the stock of a corporation if he can
borrow Inc certificates. for the reason that
my one share of stock is of the identical
n2racter and value of any other share
)ne can sell merchandise short, as in the
Instance which l have just cited, where the
contractors or manufacturers sell Tor deliv-
ny AT future date finished products, the
aw material OF which they do not own at
he time that the contract to sell is made.
john Stuart Mill. writing of the infiu-
nee Of industrial progress on prices, gives
high economic view of speculation. He
avs: when speculation in a commodity !
proves profitable to the SPECTATORS as a
,ody, il IS because in the interval between |
heir buying and reseliing the price rises |
rom some cause independent of them, their
My connection with it consisting in having
oreseen il. In this case their purchases
make the price begin to rise sooner than it
therwise would do. thus spreading the
rivatiOn OF the consumers over longer pc
Iod, but mitigating it at the time of its |
reatest height: evidently to the general |
Gvantage. The interest. in short. |
the spectators as body comedies with |
be interest Of the public; and as they can |
ortion as they miss their own, the best
FAY to promote the one is to leave them TO
ursue the other in perfect freedom"
One of the best examples of the adverse
fleets of attempted legislative repression
+ speculation is the result of the act of {
Ougress approved June Il, 1864, entitled
an act 10 prohibit certain sales of gold and
Dreign exchange" This act declared I'M i
iwful all transactions in gold Tor delivery ,
ny day subsequent TO the day of sale. and I
/ order that any transactions might be |
lwful they should be conducted al 4 private /
lace of business, and hence not in an ex- | {
lange. Transactions outside of this law | /
ere TO be void and misdemeanor. Well, /
he result was that on June Is, the day fol- {
wing the approval of the act, the premium
4 gold was 95li and by the 29th that
rcmlum rose 10 i5O per cent. Between the | ,
ate OF its passage there were no sessions :
: transactions in the gold room. As there !
as no open market where sellers and buy +,
IS could meet in open competition. and as =,
,.aT IF = e;- |