The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1902-07-28
Wall Street Notes Analogy of Pres
ent Period to Boom of 1850,
Followed by Panic of 1884.
MANY POINTS OF SIMILARITY.
Both Movements TraceabIe to
Wonderful Expansion of Amer
lean Enterprise and Aug
mentatiOn of Wealth.
REPUBLIC SPECIAL

REPUBLIC SPECIAL.
New York. July 27.-Attention has been
repeatedly directed in Wall street TO the
remarkable analogy between the boom OF
1SSD. which eliminated with the Grant and
Ward panic Of 1884. and the present periOi
OF industrial development and stock mar
ket activity. AnalOgieS are by no means
conclusive. but. II like causes bring about
like results. Wall street has much TO poa-
der over in the striking resemblance that
present stock speculation and reckless
finance. carried on at a time OF expanded
credits, bears TO the former period.
The comparison OF the two periods is
made more interesting At the present time
BY the practical repetition. in 1872, OF one
Of the chief ofienses OF the earlier periOi-
In $3.50 the Rock Island and Pacific Rail-
wav doubled its caypital stock by declaring
dividend OF 100 per cent 10 its sharehold-
ers- According 10 serai0fiicial announce
ments, II will repeat that performance this
year, with the exception that, instead OF
doubling the stock, IL proposes to practical
y treble its capitalization. creating a bond
ed debt OF S75.0o00oO. and stock issues of
$3l. 5000 additional. or total OF S5D6. 80 O'0
against $1,000 Of old Rock Island stock. In
hated to about S2i2 a share.
Plan to Form n New Company.
1t took the company fully fifteen years to
operation. which then. as now. was excused
on the score OF acquired property or extend
ed lines. From above 30 the stock got
down to below 4O and from per cent divI-
dends Il had difficulty to pay ..
Now. on top OF this. comes the plan to
form new company. with its enormous
capitalization. built up on inflated Rock
Island stock.
The Reverend Mr. Jernegan some years
ago had a plan TO make gold from sea wa
ter, and was provided with an ineNhausti-
bic supply OF material having both the At
Wall street has witnessed a great many
stock watering operations In recent years.
negan until the present time. available sup
ply has been limited.
Other Points of Similarity.
With the Rock Island road. IT again ap-
pears exhaustless
The points OF similarity between the
boom period OF the early SIS and the preS-
ent period have extended over many
months. The origin of both movements are
American enterprise and the augmenta-
tion Of true wealth, and are based upon
fundamental grounds
Both periods were preceded by an i'm
pTOvement In the national financial system,
which restored public confidence. and were
attended with remarkable industrial cevel-
opments,
There is something very remarkable in
the singular duplication OF events in these
two intervals Of the country's greatest in
dustrial development In each. the upward
swing Of prices halted pending the presiden-
tal elections and resumed their upward
course following. in one instance. the cleo
uon or Mt. Garfield. and. in the other. the
reelection Of President Mckinley
BGth intervals Witnessed the assassination
or the country's chief executive official
Both periods sustained serious crop re-
verses. and, to carry this further the crap
failure Of lsSl was followed by the bnunte-
Gus harvest OF 1852, precisely as the crop
hneFtsse OF lSl appears lkely-if the pres
snt abundant promises are fulflled-to be
I0lleTed by bumper c6Tn crap.
BUMPER CROPS HELPED BULL. BOOM
stock prices, which. in 1851. wsra thought
TO have reached their limit Of appreciation.
went In numerous instances. still higher in
DE. The same Is true OF the present year
compared with the level attained befor-
the May 3. 1901. break. On May l. preceding
the panic. the average price Of the twenty
active railway stocks used as an index bv
Dow. Jones 4 Co. was Sll7.s0. They reached
N2s.33 last week
With the prospect Of bounteou- crops fer
1881. the manipuistivs party in eontfoI OF
the market was predicting still higher
prices. ard the saying that wall street
was the catch word with the bull contin-
gent But Wall street was surfeited with
capital creations and bonds became un-
With the financial undertakings Of that
past period may be found enalogles with
this; Burlington bought at 20. Northern
" 900 for cash. are responsible for s40o. .ooN,-
oO9 OF Northern Securities and apparently
at least $50 900 IN bonds and stocks OF
Union Pacific
Economic Law Violated.
strange contriyances have appeared.
Atchison worked out Soo.0oo.o0o IN debent-
ures. imphiring the value for investment OF
every security on the road. American To-
bacco common Is qundrupled from its old
capitalization: United States Steel attempts
the violation OF a fundamental economic
law In converting n contingent into n fixed
charge hy exchanging SaOc.oOo.ono OF pre-
feFred stock into bonds: the Monon read
Is repurchased by the Interests who sold
IL for half the money. TO be saddled at hISh
prices In bonds on the Louisville and Nash
Vile, and the Southern Railroad; the Chi
cage and Alton comes out capitalized on 4
basis OF three for one, and the Amalga-
mated Copper Company Is awash with
water.
It remains 20 be seen whethe the public
VIII indorse the plan 70 relieve the West
eru party, and their Eastern allies OF the
watered stocks and bonds, as little ear
Her IN the game thsy took the securities
nufn efnrNH ~ EmMaeEa nNnafNae.a 0