Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1893-07-10
MUSHROOM WEALTH.
Why Some Men Of Millions
Have to Beg.
Talks with Chicago Business Men
on the Financial Situation.
The American Money Preblsa and Sslutien
~ Viewed BY Thea.

-
. group Of business men, and put tn
question: why are we having thes'
failures?" Liquidation. was the an
swer reflected that liquidation wa
the precipitation or condensation o
vapor, and that vapor was air or gas
Liquidation" said another busines
man, and also contraction. Money i
tigh The banks will not lend none,
up0 speculative securities, though
they pay 9 per cent. like our Chicago
cable railways"
"Why will they not lend money i
sure of per cent? ?"
because the banks have to tax,
who deal with them make their depos
its there, borrowing their money an,
making their ciientage, require TO b'
taken care Of. and they need this pro
lection at present"
Are not your Chicago street rail
roads essentially speculative stocks?'
If You mean that they were run NJ
high in the quotations after a suddei
manipulation and improvement of tn,
property, they might be considered
speculative. The men who took charge
of them were rather more speculativ,
than the property. But these railways
when improved were able to run Sc
much further into the suburbs that the
extended homes out there increased the
railroad receipts, and they have beer
able to pay their dividends finally. and
yet there has been slump in theil
stocks extraordinary to behold"
How much of a slump?"
The depreciation in our local Chi
cago stocks has been twenty-five mil
lion dollars in the single month OF
Nav. The West side cable railroad
has declined tifty-six dollars a share
the North side cable railroad sixty
eight dollars share; and in those tive
stocks the decline has been nine mil
lions and half"
Nevertheless, the deposits in the
banks of New York" said /, decreased
in a very few weeks one hundred mil
lion dollars"
Yes said one of my factors. there
have been failures in the east, too
Big iron companies have gone up. ac
knowledging that they had too much
plant for the steel rails they Were t.
make in the immediate future. But
the drainage of gold to Europe and
tine adulteration of our currency by de
preciated silver were the main causes
of the shrinllage of deposits in New
York. People were simply Withdraw
ing their money and finding some way
to take care Of it themselves"
Another person spoke, saying:
"There is no limit to the amount OF
money that a panic may absorb. The
very necessaries of life are shrinking.
Here we find wheat getting downward
60 cents a bushei The Illinois Ccntral
stock has dropped several per cent.
since the exhibition opened. and was
quoted in New York yesterday at only
10. iiocK Island is down 10 II, i. & ..
roads were selling in early May at 2og
ard 277. and nov they are selling at II:
and 200. fearful shrinknre."
Said |: "Gcntlcman. if You extend
yonr observation. perhaps you will note
that Europe at this moment occupies
the place America held thirty year
ago we reached the very lowest point
of our affairs in the spring Of 1851.
when the southern states put in erect
their theories of secession. We block
edcd them as far as we could, ard they
attacked us, and the world drew a
band around MS. Our banks went into
liquidation. The government issued
scrip. called on the poor to subscribe
the ir hard money To the prosecution of
the war. and called upon the rich to
alter their banks. SO as to become parts
of the great bank Of national issue.
We applied to all nations besides To
lend us their morer acd 70 sell rs mu-
nitions of war on credit. Does not
that correspond to the present state Of
Europe, which is armed to the teeth,
and is drawing gold from all the re
mote colonies and from America. in
order to set the finances of each nation
there upon the most advantareou7
ground 50 that war will not inmedi-
ately bring about bankraptcT?"
In Europe ought to send gold 70 Amer
lea. where We are in no danger of war
provided that gold could earn valid
living in this country"
oh. no" said another mcrc' c'.alt.
who appeared to want more pAiloeo-
phy. that does not follow Gold n an
earning quantity. and goes whore it.
- iAI In e
peace and prosperity you do not re
quire gold. but when war approaches,
gold. like powder. Knows where it has
market. Though we issued scrip
in the war, we really paid gold for all
we bought Hence gold appreciated
above our scrip, and rose to nearly
200 premium over that scrip. But
when peace came the gold seemed TO
feel that its great mission was done.
and in the course of about fourteen
years we resumed specie payments.
The gold that was with US in time OF
war had gone to the depositaries oi
gold among the German. Hebrew and
other bankers. who have made he
reditary study of gold and its tcmpera-
ment and uses"
Said !: Let us continue for II n
ute the parallel between Europe and
America at different times. When our
civil war closed we had the greatest
credit in the world. II was much
greater credit than any European ma
tion possessed at the close Of long
war. The downfall of Napolcoa was
followed in England by universal
crash; the Bank of England suspend
ed, and specie payments went out Of
date. Nothing of the kind happened
in the United States. The volatile
faith of Europe was immensely i'm
pressed by the duration Of our
civil war and by the uuiversality
of our victory. We not only suppressed,
an immense revolt, which had certain
foreign and political backing. but we
put an end to slavery. The war was
accompanied by no revolt of the slaves.
In few parts of Europe. such as Ger
many, oar loans have been taken at
heavy discounts, and the holders of
them were envied by all the. money
lenders of Europe. Bonds bought at
thirty went above par. The world
said: There is nation which has the
greatest belt of fine land on the globe
and good deal of il virgin land The
people know what they are about and
have courage, financial skill. patriot
ism. and they will not again be at war
in a hundred years As soon as our
war ended Austria and Prussia fell
out. and all Germany was involved in
the collision Tie displacement of sill
yer was one Of the unexpected results
of that war. The victorious nation
plunderel France of her gold and then
demouetizesl silver. We being a debtor