The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-06-15
A HALT ON THE TRUSTS.
Indications that the Consolidation
Movement Is Near an End.
New York Financier.

new YORK Ffnancler.
There is no longer. question that industrial
trusts in process of formation are encoun-
tering difficulties serious enough to retard
the contamination of pending plans. In fact.
official announcement has been made OF the
abandonment of several efforts TO consoli-
date various important interests, and un-
less all signs are misleading, the trust era,
as at present understood, is nearing an end
1t is not to be regretted that such is the
case. Honest combinations of existing and
often conflicting industries are not of them
selves a sign of danger. for statistics show
that beneficial results are often achieved,
both to the producer and the consumer. But
desenerated ID into an porssnized Effort "f to
make money out of the public by unloading
on it a mass of securities representing no
intrinsic value. and OF no tangible value
considered in any light. There is no par
ticular necessity for citing instances of this
fact. The history. of the formative period
will bear out this assertion.
The trust mania has brought to light a
immensely profitable, and beside which the
wiles of the real-estate boomer appear al
most puerile. We refer to the men who
sciidation of various interests for a axed
remuneration, generally in the form Of COM
mon stock Of the companies. with an occa-
to see the possibilities of the trust move
ment. They cared little whether benefits
would accrue to the owners of the stock
Sire was TO bring under one management
enough tangible property to make a re-
spectacle showing, and after succeeding in
this to secure their reward and dispose Of
their holdings in the best market. And in
order to accomplish results they encoura ged
one of the worst evils of the whole trust
movement-the enormous overcap italiZation
of companies. If a necessary link in the
chain of plants proved recalcitrant. persua-
sion in the form of a higher percentage Of
stock was at once forthcoming, with the re-
suit that moderately successful industries,
considered individually. were combined with
ridiculously large capitals; In almost every
the past six months the statement was made
that earnings of specified amounts were
guaranteed on the preference stocks. with
the Inference that the common stock would
benefit to a greater extent in the distribu-
ton Of profits. 1t is yet a little early TO
characterize these assertions as deliberately
false. but the slowness in fulfilling promises
as regards dividends on common stocks
j~ustifies the conclusion that they were d.
c.dedly misleading. In the wave of bull
speculation which occurred earlier in the
year little thought was given to dividend
possibilities. The average buyer made up
his mind that prices were bound TO 60
higher, and he purchased the trust stocks,
not to hold as an investment. but simply TO
sell TO some one even more enthusiastic than
cess of manufacturing nctitious values
should have a sudden ending. The banks
were among the first TO see the lurking dan
ger of the whole movement and they checked
II very quickly by the simple expedient Of
disputing Stock Exchange values In accept
Ing collateral.
The trust stocks have never recovered
from this chill. At times they have given
evidence of reviving strength. but the public
had its eyes opened TO the possibilities OF
danger growing out of overcapitalization
and have been more chary in their buying.
The managers of the trusts that were then
only forming secuted the idea that the
public would entertain these views for any
length of time and proceeded with the work
Of putting the various projects into shape.
Now that they have tried, however, TO in
duce buying. they find the public in an OBJ
stinate mood and abandonment of plans
is being announced with increasing regu-
larity. This, of itself, is conclusive evidence
that trust formations are based on false
continuance OF consultations. IL the bene-
manufacturer need not concern themselves
with the views of the public. for II the own
ers can demonstrate savings that add ap-
| continue In an Individual capacity. The
truth Of the matter Is that the manufac-
turers are reluctant TO accept the plans OF
the trust promoters bcause they recognize
that the latter cannon deliver the goods;
| In other words they cannot unload q sufa-
| Client quantity OF shares to pay the promised
cash bonuses. and leave any profits for
| themselves The trust mania II subsiding.
not so much on account OF the proved un-
prontableness of the idea as a whole, but
| primarily because Of the fact that the
| public has had its eyes opened 10 the folly
| OF paying promoters double and treble
: values for experimental ventures.