The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1892-01-05
Promising Material Prospects Are
Qualified With Some Legacles
Of Misfortune.
Undated Enterprises Nearly Caused
the Most Stupendous Crash
Ever known.
Deeliae Of the Value Of Corporate Issues
The Etses--Domestlo Conditions Are
Quite Favorable.

1899 opens with promising nnassrial pros-
peots for tho United States, and yet with
some lepaoies Of mssfortune from 1871
which are calculated to qualify our hopes.
If the past year has been one Of unprece-
dented harvssts and, ~ such, has conferred
insstimable benefits upon our Ions de-
pressed agricultural interest, it has also
been one of check, reaction and dulness to
most OF our manufacturing Industries.
Constituting al We do ~ inseparAble part
Of the community of nations. II has bean
impossible for US to wholly escape ths
effects Of tho European reaction that set IN
with the crash Of the Earrings. That great
failure was but the elimination. in the case
Of q single house, Of a system OF wild ad-
venture and looze financing which had
infected every none center in the old
world. and had brou Eht Europe to the
verge of a financial upheaval exceeding IN
gravity anything in the worlds previous
experience. The Bank of England's guar
anteeiag the estate Of the Earrings, not to
rave and psrpstuats the house but to avert
the universal crash which its unchecked
downfall would involve, and the borrowing
OF largo sums by that bank from the BANK
of France, tells more emphaticaliy than
can any words how deep was the chaam on
which British finance verged at that mo-
mont. And the situation that threatened
London, subsequent events have proved,
was duplicated in the case of Paris, Berlin,
Rome, Madrid and almost every other Eu-
ropean capital. The elimination showed
that the fnanciers of every nation had, Tor
ten to fifteen years, been employed In
launching enterprises the world over,..whlch
were not only grossly inflated in their capt.
tslization. but also devoid of any sound
basis of permanent self-support. In this
vay, the capitalist forcs, had become
nledped to an extcnt that made it impossl-
Bile to satisfy the demands OF legitimate
business under a period of pressure. aha
hence there was, on every money Market OF
Europe, a sudden precipitation OF doubtful
or rotten securities for realization. The
conseouence of this has been u decline OF
40 to 50 per cent, III the market value OF
most OF the corporate issues put out wilma
the last ten years.
Il hardly needs to be a~sked-what must
be the effect upon credit, industry, COM
merce and investment of such a vast col
lapse in tho value Of securities? The pres
emit depression among all European nations
only partially expresses those results; the
paralysis is destined to continue for months
nnd POSSIBLY wears to come. The question,
ID 4 ~ bAA
to pass that such an immense proportion OF
the worlds accumulated savings has been
diverted into unsubstantial Investments!
II is clear that the amount of the savings
has been immenso; and that is evidence
that the last decade has been ono OF great
and general commercial property; but why
should this capital have gone into rotten
investments rather than sound ones? The
importance Of the question js equal to the
difficulty of answering il. 1t is not sufi-
sisnt to , ssS shss p x.nH rs 'n sou uaane, sns
. .srPf''e Nor. ''' profitable for them to
float meritorious schsmes than dubious
ones. Yhs facts seem to suggest, as q prob.
able explanation. that for some time past
opportunities for probably re-smploying
them in legitimate undertakings. That is
very much like saying that tho wealth of
the world il growing faster than its wants,
and faster than tho resources for employ
ing that wealth. Such u condition is not
csptible of material prolonQation; but it
must sooner or later work out social read
justments which. in the long run. would ex-
tend the range of the community's wants
and find new and enlarged employmsnts
for accumulated wealth. But, for 4 time,
the condition of thingshere supposed would
mean reduced earnings upon European zap
ital and an era of lower rates of interest
upon permanent Investments. Equally, it
is to be anticipated that the sort of reao-
ton here indicated would induce among
European lenders q preference for invest
to pay full rates of interest. are yet
teeming with sources of safe and
rsmunerative employment for cap
ital. and which also afford all
the attractions Of social order, stable gov
eminent and n high civilization. If this
cnrpozifion hA wall fnundad IL ir1pliAa that
the present reaction from bad Investments
and dubious enterprises in Europe is des-
tined to result in a future increased de-
mand for American securities; and es-
pecially SO if those of our financial houses
who launch our new undertaking. main
tain a strict outlook upon their solidity and
merits. This, We venture to suggest is one
Of the lessons that Americans may be al
lowed to draw from the past twelve months
of European extraordinary financial ex-
perience.
This advantage, however, ia to be re.
garded as rather future than immediate
Looking forward merely to the next twelve
months, there seems to be little reason tc
expect any important European demand foI
our aeoHritles, for the reason that business
there is not likely to yield the usual amour
of profits for rsinvestment. The politicn
conditions, too. are fraught with dangers
that arc calculated to keep enter.
prise in check. 1t may be said that dis
truEt from the latter cause would be calcu-
lated to create q demand for tho issues O
Il country wich is exempt from European
ENVIRONMENTS: and that is undoubtedl
true; but at the same time it is to be kep
in mind that. in the present condition 0
foreign money markets, controlling fnan
clers will do their utmost to discourage tn
outflow of capital, while the very low price
at which a large mass of recent issues ar
selling would act as a reason against OK
changing them for Americans. But, on til
other hand, it Eaeas quite safe to anticipat
exemption from any important return G
our stocks or bonds from across the Altar
tic. That process has run its course durin
the last twelve months; and although ther
remRiH enough securities to admit of
large Yehux, yet there is no prospect of COL
ditions occurring that would force the,
back upon us.
There ia, however, ono possible CONT,
gsney which, should it arise, would vel
materially modify all the probabilliti
above considered. If we may give fn
credit to what is reported from W9shinptt
as IS the governments 1dvices from i
agents deputed to ascertain the fsasibili
of assembling q congress to rs-establil
silver upon an international basis. there
very unexpected disposition, amount,
almost TO anxiety, on the part Of Europe,
governments, including England, to co
slider such. proposals; and the overtur
openly made by Chancellor 9oschen o.
tainly give not q little credibility to the
rep0rts. Should is turn out, within I
next few months, that the principal natio