The age-herald., 1899-04-30
WHEN WILL THE ,..,,... BUBBLE BURST
 D Financial Conditions Recall the
 Eve of Panic, so MANY TIMES REPEATED During the Past Two Centuries-The Cause Has Always Been the Same, s over-Speculation By
 the Lambs.
so MANY TIMES REPEATED


 peror: T have taken in taxes the last groat my people possessed"
 "Therein," the emperor gravey remark ed. "you have jrred, It is my policy to shear my hocks, not to slay them.'
 When will the bubble burst?
 The next financial panic will be due to over-trading in "industrials" and in electric shares
 It will be, in essentials, like all great panics of the past. It will be based upon real values, inflated by the passion Of gambling and the greed of gain.
 Real values are more provocative of spec ulation mania that doubtful ones.
 This was the case when John Law, for twenty years a professional gambler, Was made comptroller general of the finances of France.
 He had killed man in a gambling row, had been forced to flee from Great Britain, and after his brief day of glory was over he became again a gambler in Brussels and ain Venice. His famous Mississippi scheme was forn1ed in TIT with the object of col onizing Louisiana and mining it's virgin gold
 The resources of Louisiana, which in those days included almost the entire Mis- sissippi and Missouri valleys, were real. Laws scheme was 150 years ahead of the times Nevertheless 5Oe,010 shares in his company were issued, at 800 livres per share and found such ready buyers at ad- vancing prices that when 5O00O more shares were offered, Laws splendid palace in Paris was beseged, men and women alike standing fin the rain for hours before his door for a chance to speak with the ma gician whose touch, they thought, would transmute paving stones to gold
 The crash came and many were impoVer- ished when far-seeing people began to put away gold gained by selling inflated shares; and the crash always comes In that way in realizing by bears upon profits accrued.
 The "south Sea Bubble.'
 The South Sea bubble, formed in Hi by Harley. Earl of Oxford, had for its object the extinguishment of the British national debt.
 Again a value sufficient to justify legit- mate investment was made the basis of stock -jobbing. Ten million pounds of debt was assumed by merchants forming the South Sea company. The government guar anteed an interest of per cent and leVled duties to meet that interest
 Yet the shares rose to dizzy heights; rose by such leaps and bounds that the com pany arranged to take the entire public debt of more than 93O,0O0,000, the govern ment guaranteeing per cent. for seven years and a half, after which read1ust- rnent was to fse made. Even with this enor- nous capitalization of a trade which had not begun to exist the shares rose on June i 171S to the high water mark of SEQ.
 In the crash that followed many of the British arstocracv were involved The Tari of Sunderland, the Duchess of Ken daI the Countess Platen. the then chancel- Tor of the exchequer and many others were implicated Some had received free shares as a condition of booming the scheme and these wern made to dsgorge almost the "a Ne of their ill-gotten gains. so that in trp end-by drastic measures which govern ments of today. in their regard for the feel ines of capitalists. would not sanction-the shearing of the lambs was less close than would now be the case.
 The Assignats of France.
 The crash which followed the issue of the assignats during the French revolution was of likc character as an example of popu- lar financial craze.
 -hcra was real value behind the as- signats-not far-away lands in Louisiana, not even tho South Sea trade. but fertile ponulated land in France itself.
 These lands. taken from the church at its disestablishment. were too vast to find immediate sale at full value From time to time tho amount of public land was n- creased by the confscation of the estates or tho emgres.
 Against this land script was issued in in- creasing quantities until assignats worth onc-third of their face value in the Year or tho Terror 1793. could three years later be bought at the rate of 7zOO francs TOT zf francs in gold.
 Only the thrift of the French people and the splendid audacity with which Napoleon Wrested from every country which he con- ouered the money with which he was to conquer the next rescued trance irolii the abyss of bankruptcy
 In all Europe the period following the downfall of Napoleon and tho refundlng or 15ulnlic debts was a time or stock-lopoms mon a vast scale. It was then. between Waterloo and 1925. that the foundations or the great Rothschild fortunes were laid Tn percentages gained upon placing foreign loans which the governments did not rea'-
 f. hntt D- tage without the intervention of middle men.
 The Great Panic of '37.
 Tn the panic of 1887 the United States re- olized how baneful is credit badly used
 Aeaia sensational speculation seened Jus tifed by the most solid of values-land' The opening of the Erie canal in lS25 in- enired speculators with the idea that water transportation between the Atlantic sea board and the lakes made the land of the new northwest almost as valuable as II It lav in Central New York.
 Today this is near the truth, but IL mas taken fifty years to make it so. Even m New York s1 late as 1I91, the state had $500. 900 acres of public land at low prices to favored grantees, the Holland Land com nany owned millions of acres in Central Now York and the Van Rensselaers, Pier ponts De Peysters and other great lani- lies ruled donlinions dwarfing those of Flu rope. .,.
 ReparIless of these acres nearer the sea- hoard which clamored for occupation spec uiators famed the activity in every state washed by the great lakes. Railroads, ca nals and banks were planned without sn- I1er,isin1 and in the belief that immediate success would follow
 Men would organize banks in one state and circulate worthless paper bills in an other Associated banks with vast debts and no assets would cart through the woods pumping over corduroy roads. kegs of nails covered with thin layers of gold and silver coins. to be used by each ir turn to dazzle the eyes of bucolic banking commissioners.
 One bank in the middle west was estab lshed in a saw mill, and a satirist said with slight exaggeration: "Every village Dlot with house, or even without house if If had a hnllnw stumn to SerVe : as