Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1903-08-01
THE SLUMP in STOCKS
Wall Street Situation Summa-
rized by Horace White.
FALL WAS INEVITABLE, HE SAYS

well known Writer on Financial
Topics Believes Bull Movement
0Iystihed All In the Stock Elk
change Until Men Responsible
Were Revealed Then Every Ono
Tried to Buy.
Horace White, a well known New
York writer on financial topics, who
has summer cottage at York Harbor,
Me-, was asked the other evening as to
his opinion of the cause of the recent
slump in stocks, says the New York
Herald.
Looking back at the bull move
ment," he said, (which carried prices
Of securities to such a height that a
corresponding fall became inevitable at
some time, it will be remembered that
Wall street was for a long time COM
pletely mystified by it. Nobody knew
who was under the market till months
afterward. 1t was eventually discoY-
cred that the lifting power was sup
piled chiefly by j. p. Morgan and j. j.
Hill on the one side and by L. IL. Har-
riman and Kuhn, Loeb & Co. on the
other.
1.-The movement began with an at
tempt on the part of the former to ac-
Qulre the Chicago, Milwaukee and st.
Paul railroad as an annex to the North
ern Pacific and Great Northern roads
by purchases in the open market. That
move, though it failed in its main OBJ
ject, supplied a great lifting power to
the market. The operators and the
public generally, being ignorant of the
purposes which lay behind it and not
knowing who furnished the steam for
it, concluded that it was a sign of gen.
eral prosperity and hence that it was a
good time to buy stocks. So they
turned and bought also. 1t was i'm
possible TO boom st. Paul in such a
fashion without booming other proper
ties more or less.
"This was only the beginning of the
boom, however. When Morgan and
Hill found that the control of St Paul
could not be bought in the open mar
ket they turned their attention to
Burlington and adopted better tactics.
They went to the large holders of the
stock. mostly Boston men, and nego-
tiated with them. At the same time
the buying of Burlington shares was
continued on the Stock Exchange.
1.-The upward movement of the latter
excited the suspicion of the Union Pa
cific people-Harrfman Schif and
others. They soon found out what
was in the wind and, MS It was too late
to prevent Morgan and Hill from get.
ting control Of burlington, they set
out to acquire Northern Pacific. The
spectators and the public generally
were as ignorant of the causes of the
upward movement in Burlington and
Northern Pacific as they had been of
that of st. Paul. They ascribed these
also to the general waste of prosperity
and were confirmed in their opinion
that it was good time to buy stocks.
1.-THE word was passed around that
you couldn't make Il mistake in buy
ing anything This was really believed
by many of the old and most cautious
operators on the exchange. Advantage
was taken of the speculation craze to
launch swindling projects on the credu-
lous investing people or lift prices to
an abnormal height in swindles pre-
viously launched.
when the Northern Pacific corner
broke the stocks that had been bought
at the prevailing prices We're mostly
in strong hands. They did not fail to
their former level, but it was pretty
certain that they would do so some
time. That time seems to have come.
1.-The fact that certain railroads of the
first rank, such as the Pennsylvania,
the New York Central and the Burling-
ton, have negotiated or are seeking vast
loans seems to me to be the immediate
cause of the recent tumble in prices.
Whatever money they take out of the
boom market they take from other Dor
rowers, and chiefly from those who are
carrying stocks on margins. The banks
must take care of their mercantile Gus
toners first, and. when it becomes
necessary to choose between different
classes of borrowers they will first call
on the spectators to pay up.
1.-The railroad demands mentioned are
deemed essential as being a part of the
country's growth, already too long neg
lected. The general business of the
country, too, must be kept going. Those
who are carrying more stocks than
they can pay for must accordingly suf-
fer if there is really shortage of loan
able funds.
'9These are differences which I draw
from reading the course of events in
Wall street, but L do not pretend to
have any special knowledge"
AS to the business outlook of the
country generally Mr.. White said:
1.-THE general business of the country
is in my judgment sound. l think it
will not be affected by the decline in
stocks"
A Magnetic Personality.
a magnetic personality, which at