The herald., 1898-10-11
EAsTERN IyTvESToRs AZ GET
TING szIX. OF THE wxr
RUIN0US INSURANCE lATEs
Electric Railways in Europe-New
Couuterfe!t Silver Certihcte.
The Cattle Situation
OFFICE OF THE HERALD,

Los Angeles, Oct. TO- 108.
The day Of the loan company Organised
In the east to supply funds to the vest al
high rates Of interest has parsed. Ths west
has developed rapidly during the past few
years. and has accumulated surplus funds
to an extent that renders It Independent
Of outside agencies. During the ''bsosn"
days, 10 called. this assistance was sought
in every conceivable way. Money was
poured into chaNAeiS Of investment with
such prodiaaltty that fortunes were made
Through the mere collection OF commissions
on the principal supplied by the east. Fic-
tltious valuations permitted the borrowing
Of Sums grossly In excess Of the real worth
Of property. The result was that the In
evltable crash left large number Of these
corporations In q bankrupt condition. In
terest was defaulted and foreclosures re-
vealed the fact that the security taken
ever was not, IN numberless instances,
worth protecting. Az natural consequence
the east within the past Ave years has lost
a sum invested in western mortgages that
almost surpassss teller. This money. for
the most part. was supplied by small in
vestors. The companies through which the
business was transacted represented i'm
the combined savings Of working people,
widows and dependent persons OF limited
resources that supplied the means. The
suffering, however, was not confined to one
class The western farmer, whose home
was taken from him through the inexora-
BILE enforcement Of the law, denounced the
money power" Of Wall street as the re-
sponsble agent Of his misfortune. when, in
fact, not dollar Of the money Of the large
capitalist had been involved. While the
western farmer felt himself aggrieved, the
eastern investor. whose savings had boen
sunk, was IN none the less enviable frame
Of mind. The situation was rapidly de-
veloping to the point where one section cor
dta.ly distrusted the other. This sentt-
ment, fortunately, has given way to a bet
ter feeling. The east realizes that 1t did not
lose its money because Of the dishonesty
Of the western borrower. and the latter, In
fact, Ia showing the honesty Of his original
intentions by bayins OF claims that have
been hanging over him for years. 1t is
not to be supposed that even a fair per-
centage Of the funds lavishly poured into
the west Will be recovered by the first in
vestors. The aba andoned towns and farms
located In ra!nless regions bear mute teti-
mony to the mistakes Of the past, but out
Of the accusation and recriminatton that
assumed 30 prominent place in our ma
tional life only short time since, has de-
veloped real conviction that the fault did
not lie with the ''money power" nor, for
that matter, with the farmer who could lot
pay his Interest. One section did not un-
derstand Its needs and the other preferred
high return on Invested capital to securi-
ty. II the mistake was mutual, not less
so was the resultant distress originating
therefrom The failure Of loan company
last week probably marks the end of the
corporations which made inflated loans on
poor security. The west Is wealthy enough
now to supply the larger portion Of it's
needs for Improvement, and there will be
gradual development of security that will
attract capital under the control Of more
solid interests. In brief, the west is now
attracting the attention Of the real money
power" Before 1t was In the hands of
Intermediates. who over-reached them
selves IN making promises. And so far from
this new interest being a curse TO the west,
the people will learn that the brightest dav
In their history was that which brought TO
them tina cooperation Of centralized capt.
tai under shrewd management for 1t I'M
plies that the region terrtorially greater
than any other one section Is taking its
pia'e IN the nation as a producer Of surplus
wealth.