The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1899-12-20
snArrLA WEDNESDAY, DEC. 10.
Trusts and the Money Market.

Trusts and the Money Market.
Through all the agitation and discus
sion of the subject of trusts, there have
been many practical men who contend
ed that 1t was necessary only to let
them alone. Their inherent weaknesses
would develop. and their inherent
strength. would operate to the advant-
age.of industry by increasing efficiency
and economy In production. If they
were. said the gentlemen who shared
this opinion, as menacing as they were
pictured, ana II their chief characters
tics were accurately described, then
they would go down before their own
defects, and nothing could save them.
There seems to be at least partial
confirmation OF this view in the finan-
ciai conditions which have prevailed in
New York for the last few days, and
stilE more, so In the tendencies which
they illustrate and emphasize. There
has been marked monetary stringency
there, due to the great increase in all
lines Of business. requiring a larger
amount of funds for their conduct, and
to demand from abroad. Under this
pressure. several concerns have gone to
the wall. and the feeling on the street
fora time was decidedly panicky. These
conditions are but temporary, and ind
easy relief; but the feeling that under
lies them and lends to them their real
significance Is full Of instruction as to
what will happen in the evolution Of
theStrust.
It has developed that there is. in the
metropolis, in every financial center,
among monied men, profound dis
trust Of the new Industrial organiza-
lions unless they can make clear and
competent showing The general opin-
ion is that this business has been vast
ly overdone. Too many trusts have
been formed. They have been over
capitalized, to the benefit of promoters
net earning power. In order to obtain
complete control of the field, 1t has often
been necessary to take in concerns that
did not have paying business and were
therefore noncontributing partners.
Financiers. surveying cautiously all the
facts of the situation, are Of the opin-
ion that the so-called Industrial stocks
are doubtful form of collateral. Hence
the difficulty of obtaining loans on such
security. Hence the active demand for
money on the part of those who have so
used them and now find themselves
obliged to pay UP. The little crisis in
the East is not industrial or financial,
but speculative. 1t Is the reaction
against the wild desire to deal In trust
shares that has possessed the markets
for some time past.
We regard this early demonstration
of the financial weakness of the trust
as fortunate occurrence Many sober
minded people have apprehended a dis
astrous collapse at some time in the
future II their organization and cap
itaiixation continued without let. But
the early development of distrust sup
plies the necessary check before we
reach the danger point. From this time
forward 1t may be considered certain
that the process of wedding out will go
on vigorously. Few il any additional
Industrial combinations will be formed,
and such of those already in the field
as are overcapitalized will be forced
to reconstruct their affairs on safe and
legitimate business lines. The reckon
ing with the trust has begun; and 1t
comes not as result of legislation, but
of those healthy economic forces whose
natural interplay is usually sufficient
as q regulator and a corrective.
The heel of Achilles. In the case Of
the trust. was seen long ago to be TIL.
difficulty of financing it. 1t exists upon
credit. The vast sums necessary to its
organisation are Forthcoming only when