The sun., 1899-05-22
SUPPORTING THE STOCK MARKET.

Saturday, was followed by q recovery in the
stocks most directly affected. which would
have been more complete bur for the influence
OF the Franchise Tax bill. Precisely TO what
extent city and steam railroad companies, gas
companies. and other corporations possessing
valuable franchises. heretofore exempt from
taxation. will suffcr when tho proposed new
bill. in whatever form 1t ultimately takes, be-
comes n law. 1t il impossible to say. but that
their net earnings viii bc somewhat reduced
by 1t there Is no doubt Hence. people are shy
of tho stocks Of such COMPANIES and will con-
tinue to be so until they know what to count
unon In regard to them. Othcr stocks also
are depressed By the feeling of uncertainty
thus enGcnhcrcd and transactions in them
have been limited in consequence.
Tho rush to sell tho So called -" Flower" stocks.
"a soon as 1t was known that Mr.. Flower had
died. and the methods adopted to check it. IL
lustrate the curious way in which the minds OF
stock spectators work. and tho motives by
which they are governed. In this case. the
panic-strcken sellers must havo supposed
either that Mr.. Flowers holdings would sud-
denly DO UfHered for sale in n block. In conse-
Quenco OF his death.-as was the case, three
yearsago. with Mr. Austin COrbin's Long Island
Railroad stock,-or that tho prices they had
previously commanded had been purely the
result of his personal manipulation and must.
therefore. give way because his sustaining
hand was withdrawn. Whichever suprosition
was the dominant factor in their conduct great
credit is given to certain stock operators and
heads OF financial institutions for hav-
ing arrested the decline in prices. and
OF having supported the market by their
purchases. One large operator is said to hnve
employed half dozen brokers to buy all tho
stocks that were offered OF the class especially
attacked. and his efforts were followed by an
announcement in the newspapers that num-
ber Of leading bankers and bank officers had
met and agreed to lend for the same purpose
AL the money that should be needed. By these
means confidence was restored. the frightened
holders OF stocks were reassurcd. and prices
went back. not entirely to their former level
but sufficiently near 1t to be comfortable.
The financial leaders who thus interviewed to
avert the crash that seemed to be impending
are very generally laudcd as public benefac-
tors. and. IL they had been unsuccessful in
their efforts. those who defeated them
would have been regarded as public enemies.
not only by those who would have lost money
by their operations. but by nearly tho entire
community The conviction that high prices
for every kind OF property a sign Of pros
perlty and that low prices are the reverse, and
q calamity to be averted by every means possi-
ble has gained so firm u hold upon mems
minds that argument can overthrow 1t.
Nearly every trader makes his living by selling
the goods he buys for more than he gives for
working men and women are constantly strik-
ing for higher wages. although they know
that higher wages all round lead inevitably
to a higher cost OF the products OF labor. and
consequently to n lessened purchasing power
OF the money received for wages aud, three
years ago. we saw nearly half the voters Of tho
country voting for the silver standard purely
on tho ground that prices reckoned according
to that standard would be higher than they are
under the gold standard. 1t is useless to point
out TO such people that the agrculturist who
gets more in this way for his wheat and his
cotton, also pays more for his sugar. tea coffee.
shoes. clothing. and every other necessary Of
life. and that tho worker for wages when
prices are high. practically gets less Of every
thing the agricuturst produces. The bubble
OF high prices float. before their eyes and they
can see nothing else.
In the stock market. this predilecton for high
prices Is strengthened by the fact that the great
majority OF operators buy to sell again. and
therefore while rise in prices affords them
profit q fall causes them to suffer loss. To
satisfy them. prices must always go up and
never go down. Even the suggestion OF O pos
sibility OF fall is disagreeabe to them. and
the men who in the newspapers or elsewhere.
give utterance to 1t are unpopular with them.
II they had lived in the time OF Noah they
would have secuted his warning OF the i'm
pending food as bear" talk. and would have
preferred to listen to the cheerful optimist.
who after the windows Of Heaven had opened
and the rain had begun to fall. insisted that
there was not going to be much OF shower.
Furthermore. II the buyers of stocks when
Mr.. Flowers death was announced had been
investors looking solely to getting as much
value as possible for their money. they would
have let prices drop as far as the sellers would
permit them to go. II. too. the sellers had
owned the stocks outright and held them
fprt tha viz al, laIf fIat,
not have been frightened by the same ovent
into selling them for less than they thought
they were worth. Thus, the prices fixed by the
transactions between sellers and buyers would
not have gone much below nor much above a
reasonable level; a panic would have been i'm
possible. and no effort would have been re-
quired to prevent one 1t was because so many
holders of stocks were in debt for the money
with which they bought them. and so many
lenders had lent the money with which they
were bought-neithcr tho one nor the other
having any fixed confidence in the stability of
the prices thus made-that the panic started
and that special measures were needed to ar
rest its progress.
1t never seems to occur to the multitude who
applaud as disintcrcsted benevolcnce this ar
tifcial supporting Of the stock market when it
is threatened with panic. that the underlying
motive OF giving the support Is TO enable the
holders OF stocks ultimately to get from buyers
higher prices than they otherwise would. Tho
magnates Of the Stock Exchange are at present
notorously loaded with immense amounts Of
things which thoy bought few months ago at
much lower prices than are now quoted for
them. and which they desire to sell as soon as
they can to purchasers who will take them and
lay them away as permanent Investments. So
far as they have made their purchases wisely
they are entitled to the profit which they will
get from them. They had tho sagacity to
a. i