Willmar tribune., 1899-12-20
THE FINANCIAL BREAK DOWN.
Nearer Than Imagined Sound
System of Finance.


ard is much nearer at hand than most
of its worshipers imagine, says the
Jeffersonian Democrat.
Since Hanna began to reign, busi-
ness has become so mixed up with pol
itics that it is we'll to keep an eye to
WlndWard and watchful of squalls, if
not tornadOes, that generate in and
about Wall street. The expansion of
what Wall street calls business has
been enormous and there is not enough
money to do it with. The banks have
been in dire straits for money and it
has only been by the most heroic meas
ures that they have kept their reserves
up TO the legal requirements. The
contraction of loans has been going on
all the summer, and is not yet ended.
During the month ending August 5,
the New York banks contracted their
loans over $40,O00,000 and the reserve
is only about one per cent. above the
legal requirements. The banks at the
other money centers of the country
were but little better off. Since that
date and up to the present time the con-
traction of loans on stock collateral has
proceeded and money has been in such
demand that as igh as 40 per cent.
has been paid for it.
Several causes have led to this state
of affairs, the principal one being the
scramble for gold by the fnanciers, on
the other side of the Atlantic, and the
return of stocks and bonds by Eu-
ropean investors for sale on the New
York stock exchange, mainly because
they regarded the price these securities
had reached as far beyond their value,
and also to meet the loans that had
been made in Europe when money was
a drug in the money centers of this
country. Thus the expected shipments
of gold to New York did not come
about, and the banks and trust COM
panies who had been active in financing
the enormous issue of trust stocks and
had loaned vast amounts on these wa
tered securities, were compelled to be-
gin to call in these loans and semi
panic ensued. That this view of the sit
'uation is not overstated Will be seen
by the following statement, made by
James r. Keene, October II, who is one
of the most reliable of the great Wall
street gamblers:
"Few people know how serious have
been the losses to individuals and firms
in and out of Wall street by too ex-
tended underwriting of the issues of
new industrial combinations lately ex-
ploded. It is we'll known that with the
exception of the first issues the bulk
of the fotations since have been fail
ures, bringing with such failures wide
spread losses to underwriters and in
stitutions.
t'The stocks of tne new combinations,
or most of them, are absolutely un-
salable, and, of course, valueless as col
laterals.
"When one considers that in this city
alone it is conservatively' computed
that these underwriting commitments
amount to hundreds Of millions of dol
lars, with underwritings for millions
in Philadelphia, Boston, Baltimore and
Chicago, the tremendous strain of the
situation is revealed.''
If Mr.. Keene's gloomy view of the
situation is correct one, the booming
financial articles sent out weekly by
Dun and Bradstreet must be followed
with caution by those who dabble in
stocks. But it is for the great major
ity of the people, who do not daily with
the stock-ticker, that this is ominous.
Their money that should be used in the
legitimate business fields and aid in
giving them a measure of prosperity;
their savings in the savings bank, the
small deposits of the modest trader, the
trust funds of the widow and the or
Phan; all these are jeopardized by this
trust imitation and the investment of
their meager savings by the banks in
stocks and bonds that will shrink in
value with the water trust securities
that Mr.. Keene talks about.
This unsound sysem of finance which
the republican party has forced upon
the country in league with the trusts
and Wall street, and the attempt that
will be made in the coming congress to
fasten the yoke of the gold standard
more firmly on the necks of the people
may be stayed. The people must think
and vote for their own interests, in
stead of voting for their own exploit
ing by the masters of finance and pol
itics, Hanna, Mckinley and their finan-
cial hackers, the trusts, the corpora
tions, the banks and the gamblers of
Wall street.