Evening star., 1903-07-11
DEALING IN INCOMES
Stock Market is Really a
Wealth Producer.
REPRESENTS ALL GLASS
BECAUSE MOST BUSINESS IS RUN
ON THESE LINES.
how the Country is vitality Interested
in "Stocks''-Bulls, Bears
and Lambs.


Written for The Evening Star by Serene S. Pratt.
associate editor Wall Street Journal author OF
THE Work of Wall Street." etc.
A common view of the stock market IS
that 1t is a great gambling place, which 1t
would be we'll for the government TO sup
press. Now. it is useless to deny that there
is much gambling in the stock market anu
that this gambling takes on forms that
lead to results which are demorahzlng ana
Injurious. l shall take occasion at announcer
time to describe this side Of the stock mar
ket but first 1t will be well to write OF the
larger and better side-that side which
serves the highest uses of the country. IL
Is the abuses of Wall street that the out
slider hears most about. Its uses are little
understood. AS a matter of fact the stock
market represents the wealth-producing IN
terests of the country. All forms of busi-
ness are now conducted by stock COM
panies. Individual ownership and conduct
of trade and industries, and even partner
ships, have become less and less numerous,
while the tendency all over the country has
been to turn all business enterprises into
stock companies. Even in agriculture has
this movement made Itself felt. Much
farming a large scale Is done by COM
panies. The stock company gives continuity
and strength to business. Men may die,
but companies go on practically forever.
Hundred Billion Dollar Country.
stock company. moreover, presents a
convenient method for aggregating capital.
William ]. Bryan recently wrote about "or-
ganized wealth as if that constituted
something which was menace to the cour-
try. Well, the stock company is form of
organized wealth which overy one must see
Is In the highest degree beneficent. We live
In a wonderful age and in wonderful
country Several years ago it was boasted
In Congress that this "a billion dollar
country" 1t might better be described as
a hundred -billion-d dollar country, for the
wealth of the United States is in this year
of 1903 very close to one hundred billions.
The bank clearings in the United States
last year aggregated SIG 600 100000 The
deposits in all the banks amounted to more
than 5000 OOOO 900. The money in circula-
tion was 81 249 600 600 Our exports
amounted to 81 3S1 III, ,i01 and our imports
to $903. 800 94S. We have 201 900 miles Of
railroad in operation, and the freight car
ried one mile aggregated last year $780,
803, ,9i2 tons. In 1902 there were 512 600
manufacturing establishments in operation.
Now in such a country this operations
necessarily have to be conducted on mag
nitude unknown fifty or twenty-five years
ago. Our business thinking now has to bc
done in units of continents. 1t follows that
larger capital is necessary to carry on busi-
ness than individuals acting separately
could supply. This large capital is secured
Dy means OF STOCK companies WhlCh are
organizations of wealth by which 100
100000 or even 100000 persons may Join
In one enterprise uniting their resources.
AS building is composed of many blocks
OF stone. 30 by organization of capital
the form of stock companies are able 10
rear the great structure of modern bus-
ness.
Merger" Decision Good.
1t Is only when companies are combined
together for the purpose of monopoly in
restraint of trade that there is produced
organization of wealth that may be
dangerous to the nation. While 1t has be-
come almost an established economic prin-
ciple that a certain regulation of competi-
ton is necessary to prevent waste and IN
stability. monopoly is opposed to the spiri.
of institutions. No more wholesome
decision was ever rendered by any court
than that in the Northern Securities case,
not because this combination of companies
was in itself injurious threatening.
but because II the courts had upheld its
legality 1t would have made possible the
creation of gigantic trust that would have
put the control of all the railroads of the
country under one corporation, itself con-
trolled perhaps by one or two men. That at
any rate would have been a logical out
come.
This view is not that of Wall street gen.
orally. Large financial interests there are
very much provoked by that decision al
though some Wall street men begin to see
the matter in a clearer light. The common
Wall street Idea of the two great problems
now before the country is that Of the mon-
archical principle opposed to the derlo-
cratic. 1t believes in the divine right of
capital TO rule in the industrial world and
the supreme duty of labor to obey 1t be-
lieves that the rule of the few in the con.
troll of the great corporations Is to be pre-
ferred to the rule of the majority. 1t is
only necessary as one proof of this to in
stance the Rock Island railroad, which has
been 30 reorganized that the few holders
OF $27.O0O0OO of the preferred stock Gin
control the company, the aggregate of
whose outstanding common and preferred
stock Is S1J000OOOO.
mention this to show that Wall street is
not infallible in its opinion. Ordinarily
right in it's judgment of financial and cor
porate questions. II sometimes goes astray
Influenced by it's selfish interests. Great as
Wall street is, the country is greater and
unless to abandon the republican
system of government we must trust the
Stock Ownership.
Each individual interest in a company is
represented by shares. 1t is customary In
larger corporations to divide the capital
Of each stockholder is measured by the
number of shares he holds The company
issues certificates to the stockholders which
afford evidence of their ownership of shares.
These certificates are usually for 100
shares inasmuch the regular transac-
tions of the stock exchange are In 100
share lots. Some companies divide their
stock into two classes. common and pre-
ferred. the holders of the latter being guar