Barton County democrat. [volume] (Great Bend, Kan.) 1885-1915, 1891-01-22
THE LATE FINANCIAL CRISIS.
CONTINUED from last weekly

its aggravatiOn must be charged to the
account of the deranged condition of
finanace in London. Not only has
Great Britain participated very largely
in recent American railroad specula-
tions, but she has, for the last three
years. INDUCED in a mania Of specula-
tive financing SURPRISING all precedent.
eFinance" companies, trust" COM
1anes, and investment companies
possessing just enough of capital and of
9he deceptive sanction of high names to
attract unwary investOrs-have created
a host of enterprises calculated to bene-
fit promoters rather than participatOrs,
|ith the result of an immense issue of
Eew ''securities,"- a generous cup
hemism sO-called. The total amount
subscribed for these new corporations
and for public loans from the beginning
% TssS to the end of October, 1890,
appears from the London papers to
have been about s485, 900, 900. The
principal items of this total are enum-
Grated in Che following approximate
statement:
Outstanding South American loans. f145 600 900
Argentine Republic cedulas. ........ 10O.O0OOO0
South k-merIcan railroads. ............ 5SOOO.OO0
South African minas- 49,. -. 10000. 600
Mir te mines Observation-Disclosures. $500 600
Erust companies Observation-Disclosures. $4,000, 900
fs7s.5Oo. 900
1t wiz thus be seen ehat, of the total
subscriptions of capital within the
4I,roo yo,rc co-c snO nOn ,,.oa Co.. x,,,
poses external to- Great Britain; besides
which there unspecified large subscrip-
SiOns for other foreign and for colonial
undertakings, aggregating probably not
Yess than ESQ, 100000. 1t would there
fore appea9' chat, of the total
9i50. .0OO, 900 of new creations, approx
imately 1865 900 900 has been for exter-
nsl rurposesa while less than
ee20 .000, 900 has beon subscribed for
Che promotion of strictly home enter
9Wses. This immense creation of new
undertakings is asserted by English
statistical authorities to have been very
Assgelt in excess of the concurrent in
crease of British cealtile When, there
soly, N IS considered thas shree- fourJhs
ese tse subscriptions were for foreign
pusposes, it So as once apparent how
eiSiest muss have been the strain upon
British finance to provide for these vast
commitments, and hoW much must
still Semain so be endured before this
oppressive monopoly 0s new issues can
De inelly distributed Hhe extent TO
Uhies noa on9y barge premotipg com=
lsaniess buE esen banking houses of high
sepute, have been involved in floating
8hess aew issues % iuusteate6 by the
7act CHAT the Aarings were found to
aavea at the time when their ambarrass-
leuss were exposed, over 100000 900
~ outstanding commitments, chiefly
connected with their operations in
South Americare loanse most Of which
ADVANCES rested upon the most slender
chances 0f repayment. The simple
mention of these facts suffices to
Semonstrate tlaS the wAole system of
BRITISH finance must have been sapped
snd drained 80 IN exteIs faF exceeding
s3 experienee tn modern eras of spec
alaemne
From Che soSegOing survey iS is plain
shIe ehe underlying causes of che crisis
have consisted almost entirely in an
erex- creation of new and largely doubt
Sui enterprises. These exccsses set in
almost simultaneously On the United
States and GGeat Britian, and they
culm mated together. Our share in the
inflation may DO approximately stated
ss covering about $4,000 ,OD.O99; that
o2 Great Britain about s., ,4O0, 900 ,0OG
wfeh che iiltsrinsic merits Of the invest.
aients perhaps preponderating in favor
Is Clio G,Ited States, as most of opI
acc soilroads have the promise Of
ultimately becoming remuneratfye, as
eemReSce develops:
Che violently Irregular movements
ceaected in the foregoing facts are 9
sad commeVe upon the lack of jqdg'
aaent among investors and equally 81
Bpon Che willingness OF a class who
euatrol large amounts of capital apC
snjoy the confidence of the public, tt
niisdirect She Oational earnings intt
unsound and wasteful ventures. But
she more regretable such experience
may be, the more necessary does it be
.aome TO devise every possible means fol
limiting the disaster they entail. Ger
tain consequences of these imitation.
are inevitable. The water must b,
squeezed out of fhe issues, and theii
value reduced to the standard of their
true earning capacity. That means
wholesale liquid ion and large declines
in the market value Of fne SCRIP! which
again, involves the disturbance of loan
based upon the dubious collaterals, ane
frequently the failures of banks, bank
ers, or promoters who have committed
themselves to the ventures; and thes
arrangements almost invariably in
yolye synpathetic injury to comercI;!
interests Which have no direct cOnnec