Omaha daily bee., 1902-11-16
REACTION FROM STOCK JoBBiNg.

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Too much stress cannot be put upon
the fact that the financial stringency in
the east is the result Of gambling and
not Of legitimate business operations.
This fact was early perceived by the
country Notwithstanding the clamors Of
stock jobbers, promoters and birds Of
prey generally, and recent developments
bring II out In clear light. II is now as
sorting itself in the continued depression
in the stock market, and most notably
i'm those securities which have been the
subject of exploitation, while in broad
contrast commercial values and earnings
hold firm, and the volume of legitimate
transactions, enormous and unprece-
dented as it has been, even shows a tend.
ency to expand.
The root of the trouble is the prostitu-
ton to purely speculative and gambling
purposes of the genuine utilities of bust
ness consolidation by modern methods.
That the latter is potent for important
economies is an indisputable fact, and
to that extent 1t is healthful and con-
sentative. 1t is not, however, endowed
with the gift Of Midas to turn into gold
everything 1t touches. The public has
been daZzled with the temporary or
promised results of combination, and
spectators and promoters have sought
to take advantage Of the prevalent in
fatuation. The situation in brief is that
they and their victims have overplayed
their hand and have been caught un-
guarded in the game.
At a time when the whole circle Of
| stocks and securities had been pushed
either by the excited sanguine spirit of
the times or by deliberate manipulation
far beyond the warrant Of earnings,
present or prospective, and just as the
judgment of the public was beginning to
appreciate that fact, it was found that
innumerable groups Of spectators and
stock jObbers and %syndicates Of promot-
ing banks, trust companies and control
lers of large interests had still on hands
a prodigious total of inflated securities,
representing merged and combined prop
critics, which had not yet been disposed
of to the public. The absolute condition
of success in these schemes was to I'M
load at the level Of an abnormal bull
movement. While still in the hands of
the promoters, these securities had alb
sorbed a vast proportion Of surplus
funds in eastern repositories and it is
known that they had been hypothecated
in European money capitals for an enOr-
nous amount, certainly not less than
speculative movement absolutely de-
pended on the ability of the public to
continue to buy, but this had largely al
ready been exhausted.
The good sense of the American peo-
pie, braced by the conservative judgment
of European financiers, has called a halt.
The movement marked in the records Of
the New York stock market is simply a
remedial process whereby prices are be-
ing restricted to values and speculative
as well as business calculations to the
line of earnings. It may be severe on
those who have too far transgressed that
line, but it is none the less on that ac-
| count necessary and beneficial. 1t is
fortunate indeed that the reaction has
come at this time, for If the gambling
movement had gone unchecked to the
lengths to which desperate spectators
would have carried it the consequences
of the inevitable collapse might have
been so ~far-reaching as fatally to in
yolve the world of legitimate business.