St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-05-17
TOO MUCH WIND AND WATER.

SAMUEL HILL has returned from a
few weeks spent in New York city,
where he took in. among other Incl
dents, the cyclone that swept over Wall
street and Frustrated so many indus
trials" and made the solid stocks bend
to its fury. Mr.. HILL gives a very in
tereSting interview to one Of the papers
of his city on the situation. He differs
from his fellow railroader, Mr.. DEPEW,
and from his fellow citizen the distin-
guiShed senator; and, although he is
Ike them Republican, he says that
President CLEVELAND has taken the
right stand on the currency questions,
and that the issue of bonds would be
useless. AS Mr.. HILL IS primarily a
business man. and politician only in
an amateurish way, while the precise
reverse is the case with both Mr.. DEPEw
and Senator WASHBURN. his opinion
will get more credence than will their
WaSpiSh ones.
The causes Of the furry Mr. HILL
traces to too much extravaganza, show
ing itself in imports of clothes and
wines and gowns, paid for either in
commodities or gold, and secondly,
following improper men to go to Wash
ington to legislate on financial ques-
tions." Mr. HILL is perhaps I'M
consciously severe on the party to
which he belongs, in saying that "had
our country not been so rich and power
full, we would have been killed long ago
financially by the folly of our own peo-
pie" Mr.. CARNEGIE expressed about
the same thought in more striking Ian
guage, when he explained to his English
guest that so many millionaires were
possible in America because the people
here are economic FOOLS"
Pregnant as these causes are with
disaster. they are not by any means all
that have contributed to the stringency
prevailing. Two others may be tersely
described as wind and water. We have
had two much wind in business affairs.
Business fairly productive has been cap
italized with wind. Cordage properties
worth ten millions are stocked for
thirty. Tanneries worth fifteen or
twenty millions are capitalized at $780,
100000. All above the actual value is
simply wind. In other lines a small
basis of cash capital is inflated by credit
several diameters. This is wind. For
a while all goes swimmingly. Then
some day people begin to tire Of giving
extensions and renewals, and want
money. Then the wind goes out, and it's
exit causes a:cyclone,ln which the paper
fabrics 90 to smash.
Then there is the factor of water. A
railroad issues It's bonds for construc-
ton work, and its stocks, preferred and
common, all to represent not what the
road is worth now, but what the pro-
moters expect 1t to be worth some time;
mortgaging the future. They get them
listed on exchanges, and credulous and
speculative folk buy them. All above
what The road costs all, at least, above
a capitalization based on its net earnings,
is water. Some day doubt comes of the
solVency of the road, and holders get
panicky aud begin to sell, aud its stocks
tumble; the water is squeezed out.
Extravaganza, living beyond incomes,
fool legislation like the BLAND and
SHERMAN and MCKINLEY acts; windy
''industrials" and watered railway
stocks, booms i'll real estate and bal
looming in business are some of the
causes of what we call hard times, but
what is only the inevitable headache
after nights debauch.