The Saint Paul globe., 1901-04-15

through one of its periodic waves of de-
Nelopment, the inevitable accompaniment
CT which IS always boom As yet
there are no weak spots in sight and
money, while finn, is not stringent.
It is very difficult to fix on any period
at Which the current boom may be eX-
pected To end its course. 1t is altogether
exceptional as to its cause Its main
stimulus centers in its connection with
the great movement of Industrial cons0l-
1datlon. The conversion of some s20G0,
G5,(g9 Of corporate capital into a much
smaller number Of corporations with ap-
pr0ximat6ly 5000 G00, coo of nominal cap
1tal-Of- which $1,000, 600 eco is common
stock, based mainly upon good will
amounts To stupendoUs imitation. which
has deranged the whole basis of invest
pIent values. The imitation Of such an
enormous aggregate of the productive
capital of the country has the natural
effect of initiating the market value CT
other forms Of investment, among the
first of which comes railroad securities
II IS assumed that, if a process of finan-
cl9l recOnStI IuctiOn can be made to war
rant q doubling of the capital of our
nanufac ctures, then an amalgamation of
OUT railroads, our mines, our oil wells
and our steamship lines warrants sim
liar expansion IN the market value of the
securities representing those classes Of
investments; and thus the imitation has
swiftly spread over every class of Sc
curities that finds its market in Wall
street.
For the time being there is some basis
for this immense expansion in the ex-
tra0rdinary run of national prosperity
(Which has found some parallel in the
commercial activity of other countries),
but Hhich, however, is not to be reckoned
upon as a permanency. The expansion
of our industrial capitalization is kent
up with such persistency and on such a
vast scale, ii is sanctioned by such an
array of Influential names and is under
written by nnancferS of such great pO-
tency, that speculation knows neither
caution nor limits. There seems to be
no end to the creation of new deals and
each successive one adds new oil to tha
flame of excitement.
All this means. however, that the dan
ger IS increasing at every step. Every
movement in such a direction piles up
the more false construction 10 be m
done. The higher prices are pushed
above the normal level, the lower win be
the fall below it. The bulwark of past
gEouts may today inspire the utmost con-
ndence, but when the impetus of the final
liquidation gets on full headway. the re-
aetlOn IS likely to SwpaSS MANY of the
previous adjustments of Wall street
iDeomS. At the moment, the situation is
probably inopportune for the DrnmoferS
of the great Industrial. schemes to pernit
any encouragement of q realizing policy.
W hen that stage arrives, the outside in
terests will soon discover thei- position
and the return of the market to its nor
nal level is not likely to be a slow
Process.
do not intend that our friends shall
remain uncautioned as to the end with
Nhich THIS extraordinary excitement NAV
pe expected to culminate Nv exueri-
tence through many speculative eDisodes
mas proved to me that there IS only one
outcome from wild excesSes in the stock
market, and that the safe policy is to
Quietly get out whenever prices reach
extreme figures.