Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1891-11-13
George Rutledse Gibson's Speech.

George Rutledse Gibson's Speech.
The programme for to-day was as fol-
| lows: Paper on Wall Street, by Mr..
| George Rutledge Gibson of New York city,
| banker: paper on Canadian Bank Curren-
cy. by Mr.. William G. Cornwel, cashier
| Bank of Buffalo, \. Y. address on States
manship in Finance" by Hon. p. W. Pee
| pies, president jackson bank, Jackson,
Miss; topic for discussion, is it Practical
bic to have q National Rate of INTEREST,""
| Mr.. Gibson's speech was Us follows:
Now, l am at once met with the possible
! criticism that Wall street is merely the seat
OF an unproductive, useless and injurious
| speculation. l want for an instant 10 debate
| this point. to see whether the common
| judgment Of unthinking people may not do
! an injustice to this portion of the financial
| mechanism. Large undertaking require
| large capital, and TO accomplish great indus
! trial results 1t is necessary to mass capital.
! The fortune of no individual would be am
| pie to set in motion the forces which have
! produced the prodigiOuS 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
| to corporations, and men found that they
| could employ portion of their capital III
| undertakings which We're not Immediately
| under their control. and for the success of
| which they We're not willing TO leopard
| their entire personal fortunes. This method
resulted in the formation of an immense
| number OF companies, organized for all
manner of financial, industrial and CONNER
| cidl purposes. II was necessary that there
| should be some common market place for
| tie shares and debentureS of these corpora
| tons, and the stock exchange naturally be-
| came the common ground upon which buy
ers and sellers of such oblis atiOnS met In
| view of the tact that the success of these
| corporations depended upon 4 great variety
| of influences, it is natural that there should
| be much tuctuation of feeling concerning
the profits which they may hope TO return
| to the holders of their securities. lnGivid-
| uals naturally make different estimates OF
| the Importance of given events they make
| different forecasts as to the future; they
| have different ideas rs to the state of senti-
ment regarding these enterprises, all of
| which factors unite to make a sensitive and
| huctuating market for the shares,and bonds
| of such OF these corporations as may at
| tract the attention and operations of nu-
| merous dealers.
The principle of speculation is inherent
| in all business; it is, indeed, but another
name for foresight and progress. 1t ex-
! presses itself perhaps more quickly and
| palpably in stock exchange than in purely
commercial circles, just as a wave of heat
registers itself more quickly on bulb of
| mercury than upon bar of iron; but the
| heat is there exactly the same in both
instances. The merchant endeavors to
| read the future and prepares himself for it,
the manufacturer sells ms goods In advance
of their production; the contractor agrees
to build house before he owns plank or
board or nal-or to Guild a railway before
he buys crosstie, rail, or shovel: the
cotton manufacturer sells the Sheeting, 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 to his means and his in
formation, buys more goods before an i'll
creased tariff goes into effect than he would
buy to meet his ordinary demand. Unfor-
tunately for them, however. they are not
always successful in their endeavor to fore,
stall commercial events and conditions.
The farmer who markets only enough of
his wheat or the planter of his cotton to
meet immediate cash necessities, and with
holds the remainder because he expects
higher prices for his product and not be-
cause he wishes to consume such surplus,is
morally as much of a Spectator as the per
son who, also with 4 view of reselling, tries
to buy the farmers wheat or the planters
cotton at current prices.
The Bank of England, that Gibraltar of
conservatism, which occasionally goes into
the London money market to borrow on its
consois for the purpose of stifening the
rate for money by absorbing the supply of
loanabe funds, performs speculative act
as dlstinctively as Vanderbilt large owner
of Lake Shore, would perform If he went
into the stock exchange and purchased all
of that stock floating on the market in order
to create higher 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 remunerative, exercises precisely
the same kind and quality of business iudg-
ment that the real estate dealer exercises
when he buys farm land or city lots, in an
ticipation of better demand for breadStuffs
or increased building accommodations. But
1t is said that Wall street goes further than |
this and sells stocks short-as if there were
involved in this a principle not present in
greater or less degree throughout the en-
tire commercial world. OF course one cam
not sell an individual piece of farm land or
an individual city lot short by reason of
physical limitations, whereas he can go
short of the stock of a corporation if he can
borrow the certificates. Tor the reason that
any one share of stock is of the Identical
character and value of any other snare
One can sell merchandise short, as in the
contractors or manufacturers sell for deliv-
cry at future date finished products, the
raw material of which they do not own at
the time that the contract TO sell is made.
John Stuart Mill, writing Of the infiu-
ence of industrial progress on prices, gives
high economic view of speculation. He
says: "When 4 speculation in a commodity
proves profitable to the spectators as a
body, it is because in the interval between
their buying and reselling the price rises
from some cause independent of them, their
only connection with it consisting in having
foreseen it. In this case their purchases
make the price begin to rise sooner than it
otherwise would do, thus spreading the
privation of the consumers over longer Pc
Rod, but mitigating it at the time of its
greatest height; evidently to the general |
advantage The interest, in short,
of the spectators as a body comedies with |
the interest of the public; and as they can
only fail to serve the public interest in pro-
portion as they miss their own, the best |
way to promote the one is TO leave them to
pursue the other in perfect freedom
One of the best examples of the adverse |
effects of attempted legislative repression |
of speculation is the result Of the act of |
congress approved June IL. 1864, entitled |
ian act to prohibit certain sales of gold and |
foreign exchange" This act declared IN |
lawful all transactions III gold tor delivery |