The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-01-16
Views oil Henry CIews.

Banker Clews, of New York, says the gem
eral conditions in Wall street last week were
not materially changed from the previous
week 1.-The only important element of
weakness in the stock market centers in the
industrials,' he says Outside of a, very
limited line of exceptions. those stocks have
long had to encounter a certain amount of
distrust; but as their wide and frequent
fluctuations have offered special temptations
to sanguine operators, they have ranked
among the most active properties on the list
AS showing the great activity of this class
of stocks, the sales of American Sugar,
Tobacco and Peoples Gas for 1898 aggre-
gated %, 800, 900 shares; while the transactions
in the three most active railroads (St. Paul,
Burlington & Quincy and Union Pacific pre-
ferred) amounted to only 17,SO0,0O0 shares
These figures show the influence that a few
of the leading industrials must have upon
the value of an enormously larger total of
railroad stocks. That influence is unfortu-
nately mainly preiudicial 1t is welded al
most wholly in the interest of momentary
speculations by the most venturous class of
operators; it is not regulated by the infu-
ences that control the value of railroad Sc
curities; it is a factor in speculation so fic-
tional and tickle that there is no calculating
upon it either one way or another; and yet
it very frequently artificially dominates the
values of all other stock investments. The
feeling among those interested in the more
solid class of securities is becoming aroused
against this element, as a serious source of
market disturbance, preventing legitimate
influences from having their due
and causing constant needless SS1' UNI un9
settings of confidence and of values. This
feeling is just now accentuated by the fact
that the banks are showing their estimate
OF the industrials by throwing them out
freely as collateral against loans. Without
speaking explicitly as to the motives of the
banks in taking this course, it is easy to
see that they must take cognizance of the
surprising extent to which new combines
are now being created In all parts of the
country. Unless some check is interposed to
that movement, very large majority of our
industries must soon be operating under one
or other mobilization OF the trust principle;
and, indeed, careful estimators calculate
that already fully 60 per cent. of our manu-
featuring corporations have placed them
selves under these amalgamations. 1t is
hardly surprising that the banks especially
those doing a Stock Exchange business,
should pay some attention to the flooding
of Wall street with issues the true status
or value OF which 1t is generally difficult
to ascertain.
1.-THE case would be different were these
largely experimental amalgamatiOns capt.
talized upon sound principles and on con-
servatve valuations of their assets and did
they possess bona tide elements of perma-
nency. In most cases, however they are
greatly oVer-capitaliZed properties are
taken IN at exaggerated ValuauOnS fac
tories are absorbed with the expectation
that they will be kept idle; good will is
capitalized at fctional figures, and profits
are promised which are incompatible with
the maintenance of prices for products low
enough to either protect the combine from
competition or to StaVe off public diSsatis-
faction and legislative or legal Intervention.
1t is very apparent also that many of those
committed to these amalgamations are in
fuenced by a desire either to realize upon
the stocks distributed to them or to make
them a basis of speculation, or both. 1t is
a serious question for Wall street to
how far it is consistent with the safety of
its large interests and with its reputation
a great financial market to become in
Strumental in the distribution of thousands
of millions of securities resting upon such
a basis as these induStrialS for the most
part possess. 1t would seem inevitable that
these corporations must, at no very distant
day, become burning question in politics;
and, in that event. what would be the stu
alton of investment interests if Wall street
were found flooded with these issues? Is it
not better to face this question now, while
protection is possible, than to ignore it I'M
til the movement has passed beyond con-
troll? The decentralization TO which the
stock market is already constantly exposed
from these influences is sufficient without
inviting further exposure to this demoraIiz-
ing tendency.
7There can be no doubt that the rapid in
crease now in process in these industrial
amalgamatiOns is having its effect upon the
otherwise hopeful influences that are en-
HANGING the value of legitimate investments.
The surprising magnitude of these new Gre
atoms causes conservative men to halt and
ask-what is to be the outcome of the wave
of speculative organization that is spread
ing over our industrial system? Their eve
few cautious men are disposed to stand still
until they are more satisfied with this in
dustrial outlook. The moral is-confine
your purchases to railroad investments of