Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1900-04-23
.0[ENS ON COMBINES
Industrial Stock Initiation and It's
Disastrous Effect in the Bust
ness World.
ABSORPTION of Smaller Concerns by
the Larger Cause Of Shut
Downs.
The Forming of Large Industrial.
Combines For Speculative Pur.
poses Condemned.


Combines For Speculative Pur-
poses Condemned.
New York, April 2s.-Henry Clews in
his weekly financial review says:
The stock market has been treated to
another surprise among the INDUS
trials ;the latest being American Steel
& Wire. Manipulation of the character
ilecenti, Witnessed is seriously lluItfuiI
to the Industrial properties, as it de-
stroys confidence in them With invest
ors. The introduction of such specula-
ton into thu big industrials has its dan-s
gers to both capital and labor: and is a
VASTLY more serious matter than when
attempted upon the railroads, disastrous.
as it proved there in times gone by. Tn
Scrupulous speculation has done damage
enough to railroads as history abund-
antly testities. 1T can do still greater
harm to the great corporations which
employ thousands of hands ana are
more closely neutrality-suspicious. With each
other than railroads. Disaster to an in.
6ustrial may mean q shut down indeti-
nltelS and wholesale discharge OF em-s
ploSes. Disaster TO u railroad is usual
ily confined to its security holders. for
the railroad must run and employees be
paid because of peculiar privileges and.
obligations which do not apply to the in
Gustrial There is perhaps no remedy
for such abuses, except a strong and ell
evated public opinion which utterly dis
credits parties to such operations. or
else stockholders rising to the occasion
and turning out unscrupulous manag-
ers. For a period after this experience
the public Will be discriminating ntheir,
attitude towards the 8industrials, which
as at present conducted can not COM
pare With the railroads in ability and
integrity of management. AS a rule.
our railroads are now managed by pro-.
fessional railroad men who have no
large interest in stock speculations,
While many OF the industrials. on the
other hand. are managed by men who
have primarily organized them for spec
ulative purposes only. There are of
course many notable exceptions to this
statement. / am glad to say.
The railroad section of The stock mar
9ket was only slightly affected by the
break in the iron and steel stocks. For
the present, however, the latter domi-
nate the whole market. \ large short in
sterest Was creased by recent operations
and recovery was less rapid than en-
sInaeted. AS, however, there is every
l,iFsp ect of a large demand for5stesl and
iron product for months to come. a de-
insid that Will tax present capacity to
the fun, there is little need for anxiety
in this quarter. There is no more strik-5
ing fact today than the soundness and
activity of business in all parts of the
United States. Expansion seems to be
the order OF he day, and new enter
prises and engagements of all sorts are
teonstantiS being reported. New :nNen-
itioas and natural Development combined
have enormously stimulated heda;nand
for iron. copper and other metals and
cur industrial development, now going.
forward III leaps and bounds, oNe.shad-
3ows agricultural and commercial eondi-
tons. a. yet there are no Indications
that the recovery which began three.
Years ago has reached the end. 1t is
likely 70 continue for some months 70
come. but With greater interruptions.
than hitherto.
The following bears reproducing at
this Tina in view OF recent events. 1sN
tract from one of my weekly review
letters under date of last August:
1T is hardly surprising that the
banks, especially those doing stock eN
change business. should pay same at
tention TO the flooding OF Wall street
with issues the true status or Value Of
which it il, generally difficult to ascer-
tain.
The case would be different were
these largeis- experimental a1nalsaina-
l.tinns capitalized upon sound principles
| and on conservative valuations Of their
assets, and did they possess bona tide
Elements of permanency. In most cases.
4 however. the. are greatly over-capiial-
lied; properties are taken In at exag-
4 gerated valuations; factories are alb
I sorbed With the expectation that tiles.
1 Will be kept idle: good Will is capital-
| lied at fictional figures; and profits are
promised which are Incompatible With
i the maintenance of prices for products
low enough TO either protect the COM
d bine from competition or to stave off
Il public dissatisfaction and legislative or
legal intervention. 1t isNery apparent
i also that many of those committed to
these amalgamations are influenced by
"a desire either TO realize upon the
i stocks distributed To them or to make
t them a basis of speculation. or both.
I is a serious question for Wall street
3sas to how far ii is consistent with the
i safety of its large interests and with
\ its reputation as great financial mar
/ ket TO become instrumental in the dis
/ tribution of thousands of millions of Sc
+ curities resting upon such a basis as
1 these industriais' for the most part
] possess. 1t would seem inevitable that
+ these corporatfons must, at no very dis
i tant day, become burning question in
/ politics; ana, in that event, what would
/ be the situation Of investment inter-
ests. If Wall street were flooded with
/ these issues? Is it not better to face
/ this question now, While protection is
possible, than to ignore it until the
movement has passed beyond control?
4 The decentralization to which the stock
market is already constantly exposed
/ from these influences is sufficient, With
out inviting further exposure to this
demoralizing tendency.
There car be no doubt that the rap
i'd increase now in process in these In
dustrial amalgamations is having its
effect upon the otherwise hopeful influ-
ences that are enhancing the value Of
legitimate investments. The surprising
| magnitude of these new creations