The record-union., 1894-05-12
Eastern Capital Will Not Come
West for the Present
The Effect of the ssIndustriaI Army,
Movement on the Investment of
Eastern Capitalism Interesting In
cfdent.


when the coming panic was casting its
shadows before. Two banks have closed
their doors; a 35-year-old firm of cloth
iers failed for million; an auction sale
of a line of drygoods made to sound 9
level of prices at which the long stored
up stocks of dealers could be disposed Of
frightened men in other branches of the
same trade from similar experiments
over million in gold was shipped to-
day for Europe, and hundreds of thou
sands of shares and bonds taken by
foreigners two weeks ago were sold back
to US at reduced rates. These incidents
with their significance and the tendency
to see danger at last in the industrial
movement, together with other develop
ments l may mention, have brought
about the feeling among New Workers
that the country is still deep in the
slough of misfortune.
Probing a little deeper into these facts
may make clear why Gotham sees things
so darkly. The banks that stopped pay
| ment are not large institutions, but they
were dependent and their course reflects
the condition OF the real estate market
and of the retail trade in this city. The
sentatives of every important market in
the country, but the goods were knocked
down to bidders who named prices from
l5 to 80 per cent. below those of last year.
Flannel is staple article and the buying
is for the fall trade, 1t showed the ex-
pectations of dealers for that remote sea-
son. The results, therefore, were dis
heartening, even when it was ccnsid-
cred that the cleared wool market is
n low in a n
To-day's shipment OF gold, s., 100000,
though it was Withdrawn largely from
the National Treasury, and reduces the
reserve to Sl00, ,905,977, taken alone would
be insignificant. But it was thought that
gold exports had ceased week ago. The
demand for the metal on the continent.
where, in Berlin and Paris, loans have
been hoated, does not account for the
transfer, which cannot be understood
without studying conformity with it the
movement of prices in the stock market.
Europe bought fortnight ago and sold
at loss of from l to per cent Yet the
drop in prices was not IN proportion to
the sales by foreign houses. Those sales
were absolute; that Is to say, they were
not speculative, for the sellers have or
dered their money sent them In gold.
They did not leave the cash here for fu-
ture investment. This shows the rela-
tionship of these two phenomena. But
taken together, they have a deeper sig
nificance, and one that touches US all,
West and East
=. Some time ago banker said to me that
with the revival of business after the
panic Eastern capital would have to go
more thoroughly into the West than ever
before. The losses to Eastern enterprises
by the crash would be followed by a re-
duction of dividends and the rate of in
terest in the bonded debts of companies.
A general readjustment must, he said, be
made on more conservative lines, which,
the earning power of companies being
reduced by the settlement of heretofore
STAYED off debts, would fix the rate Of in
terest in the Eastern States more nearly
on level with the European average
rate. The advantage over European in
vestments would still be great enough to
make ours marketable there, but our
capital would have to leave more than
ever of Eastern securities to London and
Paris, and seek better paying fields in
the Western States.
The present outlook for any such
movement is very shadowy, at least so |
Judge from the fact that prices for our se-
curities held under heavy foreign sales.
That could be possible only when local
capital, stored up in free state for enter
prise, came out into the market and
picked up the rejected securities from
abroad at every concession of price.
Another evidence of Stay-at-home
tendency of New York capital was
evinced yesterday afternoon, when the
city sold some bonds. They were hotly
bid for. to speak figuratively. There
were fourteen bidders. who offered from
to 455 per cent. premium, the highest
bid being from firm OF private bankers.
| saw lot of bonds offered without
taker twice last fall, and in ordinary
times the savings banks alone want
municipal bonds. The savings banks to-
day were far behind national and private
bankers and Wall-street marvels.
Wall street knows well why Europe is
throwing back to it American securities.
The foreigners are afraid of our indus
trial movements. Wall street knows,
too, that moneyed interests here are
alarmed at the vague and violent demon
strations of the Industrial Army. The
perplexing thing to the street speculator
is that his "bear" onslaughts on the
market failed. Prices held fast under
spongy absorption Of stocks and bonds.
1t was the exclamation of the same
banker l quoted before, that gave me the
hint by which / could comprehend the
apparently contradictory elements of the
financial situation. This man said,
apropos of the Industrial Army, 1T
closes the West up,o and he punctuated
with an explanatory oath. He meant
that the westward gaze of capital would
stop and that money would do the best it
could here. He was too well informed
man to misapprehend the significance of
the Industrial Army, or to do himself the
Injustice implied in his words to the
West. But he is merely a placer of
capital, an investor of other peoples
money, and he had in mind the influence
the demonstrations would have with
those who had not his acquaintance with
the West.
Now, New York is ignorant of the
spirit, the ingredients and the causes
and hopes of the Industrial Army. The
movement has been poorly reported, not,
1 thiI k, Intentionally, but because first
error has not been properly mended.
When Coxey started out there was moth
ing but the absurdity of the movement
evident on the surface, and those who
saw deeper accepted the tendency to rid
icule it as a good means of breaking its
force. So it happened that some of the
"big dailies" sentIout their funny men to
write it down. They were men who
were incapable of honest observation and
never knew what research and reflection
were. They were good enough men in
their lines, but sadly out OF place, and
after the movement was grown unmis-
takably serious they were still writing
fun" OF course, they were recalled,
but the time for getting the facts and the
real spirit of the origin of the phenome-
non was past. 1t was grave journalistic
error, but New York to this day has not
been able to get correct impression of
the Industrial Army. 1t is no longer abb
surd in our eyes, of course. but it is taken
seriously in a wrong and exaggerated
way. 1t is looked upon as maniacal,
without beginning or cause or end or
aim. 1t is q wild menace, not to be
needed, studied and understood, but to
be dreaded. put down and kept in mind
forever as frightful possibility.
This is wrong, as you know and as the
Western newspapers show. There is
nothing to be approved, either in the in
terest of labor or of the corumonweal