The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1899-10-27
AN ALARM SOUNDED.

Mr.. James r. Keene, the noted stock
dealer of New York City, predicts a
fearful slump" in socks. The capitali-
cation within one year, of $4,000, ,000, ,000
of trusts has awakened a most serious
alarm within financial circles. The in
crease of money within. the last fifteen
months barely reaches $4,000, 900, and
on this increase and the small amount
of idle money at the time the trust
movement began, rests $4,000 900, 900 new
securities. 1t is an awful contemplation
to think of the weak foundation on
which the immense trust fabric is built.
The rule governing this imitation is to
issue one third Of the capital of parti-
cular trust in preferred stock and two
thirds in common stock. Usually the
preferred stock represents the actual
values Of the property put into the trust.
The pr eferred stock has preference on
the profits earned. The rate of interest
to which the preferred stock Is entitled
is named in the certificate covering the
issue. Until that is paid the common
stock does not receive a penny Of in
terest. The custom is for the original
parties to relieve themselves, as soon
as possible of the common stock. The
practice deceit on persons who are not
competent to judge of its value-induce
widows and orphans to invest in it and
seduce persons who are handling trust
funds, rot infrequently sharing with
trustees the profits which accrue in the
transaction. BY every devious way the
original parties in forming the trust get
clear of the common stock. When the
u, H,xA
these original parties are not harmed
They have parted with the miserable
stuff and have the money in theil
pockets, or safely housed in bank vaults
Mr.. Keene is confident that a woefu
collapse will take place. In amazement
he exclaims: Think of such an invert-
ed pyramid of credit, with so little
money at its base and you will con
clude as I do. that the danger of its
continued stability overshadows al
other considerations"
The truth is this trust movement hal
its origin in determination to perpe
trate the most stupendous fraud of tn,
century The men engaged in 1t know
that the most unheard of disaster will
overtake the movement. They know
also that the class of people who will
peCOIIle the purcHdSerS are tnOSe Wn
have no means of living other than tn
revenue they derive from fixed in
Ivestment. That investment will b
lcourted from them by misrepresentation
land naked lies. Today nineteen-twen
ltieths of all the new trust securitie
are actually valueless for commercia
purposes. The banks will not tax
them as collateral. The owners mus
work them off on the innocent and tn
ignorant-persons who can be deceived
Mr.. Hanna is large holder of trus
securities. He can never be a losel
He will not be the owner when tn
crash comes. He will have disposed c
all his interests. Snug and dry aboV
lingulfing waves, he will enjoy hi
wealth, unconcerned, though those I
whom he sold his stock are In povert!
Let the courts that are able to cor
troll the character OF the investments {
} trust funds, critically inquire into tn
value Of the securities in which truG
tees propose investing Let the court
protect the widows and the orphan
the aged and the ipfirm from I'll
rapacity Of the trust cormorants.