Amador ledger., 1900-09-28
THE TPUsT CRAZE.

Humahity is subject to epiderc'cs,
popular waves of feeling and ac!in
vogues, crnzes There is no portion of
the human family that is entirely e1-
empt from them and investors seem TO
be peculiarly sr,i ct to crz,s
During Nr. Clevelani's a,,lluistra.
ton money u..ht safely in hid.n.- It
was drawn OF Investments and o-;
OF circulation and put into deposit
vaults, chimnev flues, old stockings or
sewed up in mattresses and sl4pt IN
that its safety mi hit be spTely guarded
But with tn inau .ur ;tion of Presi-
dent Mckinley the timid possessors of
s;tvlnSs began to seek avenucs for get.
ting their hoarlings tack into usa
where they would return an income ard
so mog<N.sat once became cheap ard
abundant
This was the long looked for opnar.
tunity of the promoter The pyofe S.
sionai promoter is soldier of fortune
IN financial warfare. lie IS man of
glib tongue, prepossessinS address, quick
wit and wide. but superficial knowledge
of financial affairs, and he spends other
peoples money like water.
For generation after tue civil waf
the American promoter buils r ilroads,
PARALLEL lines that cid not pay oper.
ing expenses with other lines that did
not pay operating expenses, unloaded
i'll season and left investors to care for
the remnants of their own interests.
With the return of confidence the
American promoter went into the Gin
dustrials'', which had been prosirared
as the result Of dimiii he'd densantl
and consequent excessive competition,
nj, encouraged by the success Of a few
English and American associations of
nanufacturing en;erp; Ae, nf similar
character, inauguratad craze for the
formation of tru is.
The enterprises ssued two kinds of
stock, or shares, preferred" and "com-
mon" The "preferred" represented
the actual capital invested. The "com-
mon" represented water TIL pro
motor was given Il share in both kinds
of stock for his services. which he
quickly un'oaded on the market, aid
then stepped out leaving the real own
ers of the properties AMI the specula-
tive investors TO shift for themselves.
The savings of the great middle class
was the real object III Wow and they
were to be possessed hy manipulations
of trust stocks on the stn'k exchanges
The successful promoter was the one
who could unload the shares of his con-
Germ away above their VI ne and, in the
panic which resulted from a disclosure
of the truth, ny the s;is'." shares in as
much below their real Va u IS they had
been above The invo.iur was the prey
Of the promoter
The Bryan pnrtisans tried very hard
to make it a7pca ar that the .unexlmpled
formation of trusts was the direct pro-
duct of the Dingley tariff law, which,
however, had nothing at all to do with
trust formation, as we have seen. The
trust promoters found their oppor-
tunity in an eagerness for investment
resulting i'll return of coutilence. The
Republican party is responsible for the
return of confidence, but not for the
misuse which the trust promoters put it
to or for the craze of gullibility which
prompted SO many to gamble in IN
known stocks on exchange.
The greater part of the trusts formed
during the craze have already been dis.
solved, They died during the birth
agony. Their stocks found no buyers;
the craze il long since over and now
exists only in the Bryanistic mind as a
substance for the manufacture of politi.
cal capital.
For time trusts were formed with
great rapidity, but the banks Of the
country took fright and put a stop to
trust promotion by refusing to lend
money ON trust securities, thus warn
ing investors to keep their fingers out OF
that fire.
There is r real trust problem, but the
craze for the formation of trusts has
been eliminated from that problem by
the banks. The real trust problem will
be considered under that head.