The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1894-11-22
WHY STOCKS ARE LOW.

The constant and steady decline IN
stocks which has been going on for
months is rot without significance. IL
means much to the small share holder,
and an enormous shrinkage OF wealth to
those who have large holdings, and, IN
many cases bankruptcy 10 large class
of people. This situation develops a
condition, at once surprise and
| calamity, to many who have invested IL
good faith-that condition being nothing
less than nondividend paying property
has no value, other than the small con-
sideration it demands for speculative
purposes.
Present conditions, anomalous as they
may seem. are not without cause. Theo-
rists have theorized, and would-be
political economists have had
much to say about the
Fundamental causes for the decline
in that class of property. They attribute
it 10 hostile legislation, to a poorly ad
Justed money system, to Sociali5tic and
Anarchistic tendencies, to labor disturb
anceS to an inordinate, morbid desire,
on the part of the people for change IN
present forms, and existing laws and
customs, to the encroachments and in
novations of party politics, and to the
selfish ambition of party leaders, cranks
and specimen; but the one potent, over
shadOwing cause is kept steadily from
view. The novice in business knows
what it is. II is all too apparent to the
investor, and, in many cases, the really
innocent purchaser, yet tc allay suspic
ion, and prevent a collapse, they main
tain 4 studied silence, and nurse their
misfortune as a forlorn hope. II is
terSely expressed by the term water,
By this system of legalized robbery
large percentage of the corporate prop
erty of the country has been diluted
till it has 10 real value. 1t is the issu-
ing of additional stock for no other pus-
pose than 10 swell the volume of So
called shares TO be converted into cash,
TO facilitate the work and consumate
the deal, 1t becomes necessary to in
crease the earning capacity Of the prop
erty. This is easily done in directors
meeting, and it turns out that those
who stand the brunt of it are the patrons
of the concern. But does it, in fact,
affect the real earning capacity: There
are natural laws governing trade which
are not changed by directors resolutions.
1t is the infringement upon these laws
that reacts upon the value of the prop
erty. Such are the difficulties con-
fronting the bulk of corporate property
today. Unable to pay dividends on the
capitalized value of the property, it is re-
garded as simply a nominal holding
that may or may not be worth the paper
upon which the highly wrought certifi-
Gates are printed.
Meanwhile debts are to be paid. There
are few such properties not covered and
plastered by one or more series of mort
gage bond. These bonds bear interest
which must be met, and, in many in
stances, the principal has long since de-
faulted. Complaining the situation still
more, this is the day OF liquidation. 1t
is the time of general financial round
up. By common consent in part, and
for other well known reasons, the cred
itor has been calling in his funds, and
the corporation, as well as the indi-
vidual. which is unable to plank down
the cash, must stand the shrinkage.
This is why stocks are low.