The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1899-04-02
BUBBLES BURST.
Schemes Of the Past
That Met With
Disaster.
MANIA FOR SPECULATION
Scenes in Stock Exchange
: When Jim Fiske Tried
5G to Corner Gold.
MANIA FOR SPECULATION

gshe great expansion of industry in
tl,ss country is becoming a matter of
far more than ordinary concern, and 1t
iE cconing aoSra to New England and
.rartteularqy to Worcester with striking
Goram as ,.rr
In The past u months no city in the
country, in point Of proportionate
population and wealth, has presented
so great. q spectacle Of industrial amal-
gan1ation. It has not been alone in
theninmenss local operations of the
American Steel & Wire Company AL
though that represented a home trad
ing that reached UP into the millions,
IT. was but one of a considerable num-
beE Of combines that found their centre
Of active operation here and, indeed,
many Of them were conceived in Wor-
cester, a S. o..
The last trust, and the wire cloth
combine opened here, and the bicycle,
brewery and food combines are well
within the limit of possibilities. The
International Air Power Company re-
EeiYed its greatest impetus here, and
there are other conceptions that will
soon be brought to light in Worcester.
The United Shoe Machinery Company
and the United States Envelope, two
Of the solid and paying industrials Of
the country are essentially Worcester
products. OF the latter two it may
safely be assumed that investors have
at least q fair knowledge of detailed
. operations and of the real value Of
their holdings. The others are as yet
experiments. .......
it's to be hoped that this tremen-
dous expansion, referring to it in a gen
eral way, Will not be permitted to lead
to a duplication Of the panic experi7
ences in South African and South
American investments that came so
close to shaking England in finan-
cial way from centre to circumference.
1t might be well for Worcester in
vestofs, and there are many of them
TO stop for a while and ask themselves
now much they know of all these ice,
carbon, sewer pipe, sarSine, salt, dairy
and auto-truck companies whose COM
pines are today Offering the public
stock of from $10,00O,OOO to $5OOOOOoO
each.
The New York Evening Post has a
very timely article on this line. 1T Is
NOT says the Post "a matter of very
great surprise, this present movement
TO force by public sale the shares of a
vast number of newly organized indus
tries. In MacauIey's history he tells
of a time in the 18th century when the
earnings of the English people amount
ed 10 a sum total greater than had
ever before been conceived of. Old
fields of investment We're closed, profits
were being made in hitherto untried
ventures. Projectors, Serious and alb
surd,, honest and and lmavish," all
contrived Schemes for the employment
of redundant capital. And the spirit
? hp
SENTATIVE. Glasses at that time is a
harsh way OF now describing what may
be seen today in fioatations of certain
lines Of stock even here in staid and
conservative New England.
The general tendency to consolidate
great manufacturing interests into
hugely capitalized concerns is no nov
city. 1t is the means TO the promoters
ends. But the present movement is
one of extraordinary magnitude, like
unto that which reached its climax in
Great Britain in 1889. In England that
year the total OF new company applica-
tons reached an authorized capitaliza
ton of $947 ,000, 600, the largest in Eng
lish history The Financial Chronicle
summary for America, in 1888, for the
same. purpose, was $685. 176 000 For
January and February of this year the
capital authorized for new industrial
corporations reached the unprecedent-
ed sum of 81, 106,000,000.
In less than one-siXth of the year, the
highest Y months record, either of
Great Britain or the United States, has
been exceeded by u per cent. If the
present rate of industrial capitalization
were to be continued to Dec. 81, our
promoters would be able to point out
So GSSTS00,GG0 as their record for 1899 It
is plain enough that our redundant
capital viii soon cease to be "redund-
ant"
1t may be true that, to a degree, this
huge capitalization represents existing
private investment turned into public
shares But this does not alter the
general nature OF the situation.
No man can forecast the immediate
future Of the present movement. The
financial and commercial position Of
this country has been SO extraordinary
in the past two years. that a score Of
conservative predictions have been ut
terry -te1ied But if human experience
teaches anything, it teaches that Sc
we're reaction follows every blind and
reckless speculative craze, that the
magnitude Of the ultimate collapse is
proportioneS to the magnitude Of the
previous venture into unknown enter
prises, ard If at the time of such re-
action the community is heavily in
VOWED in 5lle money market general
disaster must follow.
So that, after ell, it is in the hands
Of tle hanks. sound commission bro
kers ana listing committees" Of eK-
changes TO stop it all. Worcester bank
ers may be- depended upon as they al
ways have been, to direct affairs along
safe and conservative lines and for the
best interests OF stockholders and de-
pcsitors. They will help, as they
should, to nip the tendency to over
Speculation in the bud. This done,
there Is no reason why q good market
Should not continue, but not a wild
boom.
The mania for speculation that has
recently characterized the stock mar
ket invites attention to other great per-
iods of the same kind in different
Countries
The South Sea scheme. originated
in England by Harley, Earl of Oxford,
in III, and the Mississippi scheme pro
5ected by John Law in France. in III,
were two of the greatest speculative
bubbles ever known. The floating ma
tional debt of England amounted to
10000, 900, which was taken Up by d
number Of merchanths to whom the
government agreed to guarantee for a
certain period. the annual payment Of
100000. being 6 per cent interest
This sum was to be obtained by render
ing permanent a number of import du-
ties. Monopoly of the trade in the
South Seas was secured to these mer-
chants, who were Incorporated as the
South Sea company" ExtraTagant
ideas of the wealth of South America
were fostered by the company, and the
shares rose day by day IN 17l7 the
company advanced Ga, 100000 more to
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