New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-09-22

Wall Street has had another reaction In
stocks. 1t would be well If all spectators
could fully grasp the meaning Of the expert
onced bank president who said that the change
could do no harm did not affect anything nm
favorably except the prices Of certain stocks
and was needed 10 check cXtravagant specula
ton in securities This explanation also might
have been further explained. The banks and
those who have borrowed from them had for
some months done much TO produce and foster
the speculation which II has now been found
necessary 10 check Then the creation and
support Of great industrial corporations was
an effective mode Of employing the large sur
plus of available capital and thus Of getting
better rates for money. 4 long season of mon
etsrv abundance and low rates Is trying 10
financial Institutions and the business Of or
ganizing new combinations provided a means
Of employment for many millions of die funds,
with the assurance that speculation IN the
stocks thus created would employ still more
millions Tho remedy for monetary super
abundance was certain and completely effective.
For the present purpose II need not no con
sdered whether the creation Of the great in
dustrial corporations was or was not benent
10 the country Nor was II requisite for the
banks 20 decide that question before lending
money 70 good borrowers. with good collateral
for the promotion Of enterprises which they he
levcd would he not only profitable, but II
benefit % the public. Nor does II appear that
the business Of legitimate merchants or mann
facturers has been ar any time seriously ON
harrassed by tho use Of New York funds largely
for other purposes. They have been doing a
great share Of business on 2 cash haSs-a larger
share than ever before. owing n the general
prosperity throughout the cou~ 'ry-and their
needs have been supplied from the Overlooking
reserves Of interior banks. The money paid
/ by New-York promoters for an iron plant in
/ Ohio. for example presently sVelled tho TO
! serves Of Cincinnati bank, and was thereby
employed in dscounting mercantile paper in
/ New-N ork and so returned after having helped
the commercial interests as fully as II il had
been originally loaned here on commercial pa
per and not on collateral But on the road Il
helped 10 create new stocks over which Wall
Street has been very busy.
When new corporations are formed many ~
those who take stocks for their plants intend
to realize early as they can without At
tracing attention. and many more are induced
10 realize If the fine stories told about the new
companies induce buying AT rising prices Hav
ing thus unload"d stocks worth many millions
which Spectators are eager 10 buy on margins
the former owners ~ works proceed 10 enjoy
their ease while the spectators begin 10 worry
about tho future Of markets for manufactured
products Meanwhile the hanks. constantly
lending 10 people who are carrying industrial
stocks on margins. arrive M length M suff
Gent reduction Of their resources and a sufi
! Gent rate OF interest for their money Their
there begins enforced cnrtailment Of loans in
stead ~ expansion, and the prospect Of wal
abroad comes 10 produce European selling a
American railway securities also. and greater
apprehension in the money market. In few
DAYS vast quantities Of securities change hands
and operators secure great blocks at price,
much below those paid TO former owners 10