The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-08-23
WILL THE INDUSTRIALS ToPPLE
OVER?

For months the Morgans, the Rookie
fellers, the Schwabs and other organizers
of trusts have been making something
out of nothing. The time, of course, is
coming when all the watered stock and
bonds will collapse unless the prices are
made sufficiently high to pay dividends on
the watered stock. 1t does not require
a seer to predict that when the time
comes that the watered stock does not
pay a dividend-then, what then?
Walter WelIman, the Washington cor
respondent of the Chicago Record Herald,
quotes a member of Roosevelt's Cabinet,
understood to be Secretary OF the
Treasury Shaw, who declares that there
will be no revision of the tariff. He de-
clared that agitation of tariff revision
is the worst of it." and then he went on
to make these remarkable utterances
that will startle many who have not
thought of the situation stated by the
Secretary OF the Treasury:
There is widespread belief that no
danger of panic or hard times exists in
our country now. Prosperity is so great
and so general that the people are unable
to see any end of it. l am not an alarm
list. and / am not expecting trouble, but
it is true that we have today all the
conditions for a sharp reverse. There Is
a general superstition that both the banks
and the people have SO much money they
do not know what to do with it, and that
therefore a panic is an absolute impossi-
bility.
Let me give you some facts without
comment. You go out to the farmers
and ask them how they are getting on.
They will tell you that they. were never
before so prosperous. They are out of
debt and have plenty of money. Ask
them where their money is, and they will
tell you it is in the local banks Call at
the country banks and inquire into their
condition, and their officers will tell you
they are all right. Money plentiful and
reserves above 40 per cent. Where is
your money?" ooh, it is in the banks
Of Omaha, Minneapolis, Kansas City, etc.
Next you go to the bankers in
Omaha, Kansas City and Minneapolis,
and they will tell you the same thing.
They are in good shape; reserves 50 per
cent. Where is your money!" I'm
Chicago" Now go to Chicago. Same
story. Banks all right. Reserves 80 per
cent. But the money is in New York
Finally, pursuing your inquiries in
New York, you will find that both de-
posits and loans have been enormous.
The money is not in the banks. There
are only six National banks in New York
that have not been below their legal re-
serves since January 1. You want to
know where this money is? Well $780,
100000 is loaned by National banks on
the bonds of industrial corporations.
These corporations issued bonds instead
of stocks, because the National banks
can take the former and can't take the
latter. Intrinsically they are no better
than stocks. In most of them there has
been a lot OF water curing. Here you
see where $3.50, 900 of the countrys
surplus Stands against lot of undi-
gested, promotion produced securities.
The trust companies have put out mil
lions more in the same way.
THAT is where we stand. 1t is all
right as long as it is all right But 1
don't want to see anything happen.
don't want to see these industrials be-
gin to topple over, to fall against one
another and come down in a heap like
childrens playblocks. And this is one
reason why l am opposed to a tariff re-
vision agitation that might start things
going the wrong way"