Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-10-08
ILLS OF WATERED STOCK.
Cured by Public Markets More Potent
" Than hY CONGRESS-
From the Phfladelpbia Press

From the Philadelphia Press
'Over-captalization' in the trusts was
an evil for which host of people were
asking for drastic legislation two years
ago.
The stock market has acted on this over
capitalize ton with a certainty, severity and
efficiency Congress would never have
achieved. In all. the trusts capitalized
before the last of them, the American Mer-
camille Marine. fell stiilborn, had a total
capital of about s6.d30.0O0,00O This total
involves some duplication, some issues
never actually made and some other errors.
The actual aggregate is probably some
where near s6Go0e10.oo0. In thing as
big as trusts. and still at such loose ends,
no exact accuracy is yet possible.
The capital had a lot of water in 1t.
The stock market has been wringing 1t
out One-quarter of this vast sum went to
one trust, the United States Steel Corpo-
ration, 81 ,at0, AH.9oo. This was worth yes
terday in round numbers about 5000 OUOO
just between one-half and One-third of its
value. The average of the shares of ten
of the largest trusts is now about A.
Taking all the trusts together, the legis-
lation of the market, whose penalties no
man can evade and whose statutemaking
affect by political influence
personal plea. has squeezed out from one
half to twO-thirds of the water" in the
original over-capitalization of these mann
moth corporation The trusts organized
from two to five years ago stand today
for round market value. shares and bonds
together. of S2,5c3,0O0.000 to $3.O0O,00o,o0O.
This is not an generalization. The entire
manufacturing plants of the country In
1880 had a capital of 80 500, coo, 900. The
trusts do not turn out third of the manu-
featuring product of the country; but their
product is sufficiently near to this to make
a valuation equal to one-third of the manu-
featuring capital of the country. not an
eXorbitant overestmate. If the trusts had
been capitalized al the now current market
quotation of their shares. common and pre-
ferred. and their bonds, no just complaint
could have been made.
The legislatio of the market place has
reduced trust capital to pretty fair figure.
The public Is buying close to true values.
Those who sold their plants at the ex-
orbitant figures of two to four years ago,
and cashed the shares and bonds they
ceived. did pretty we'll. Most of them, how
ever. either held the new securities or sold
and invested in other trusts. There was a
prodigious swapping of various manufac
turing jack-kniveS, and now that II is all
over no one is very much richer.
The chief sufferers from over-capitaliZa-
ton have not been SO much the public as
the rich who took these shares and
bonds at the first organization. have used
them basis for vast speculation under
the impression that the last boom was one
whose smile would never come off. and who
have been realizing at half to two-thirds of
the original ground floor quotation.
A list OF those who have suffered from
the "'over-capitalization" of Consolidated
Lake Superior, Steel Trust, Amalgamated
Copper the Shipbuilding Trust and the
Shipping Trust would show as the heaviest
| losers. though not the only ones. the very
men who worked the over-cap italizatiOn.
| The mills of speculation grind slow, but
they grind exceeding small, and this time
| many a miller has been fed through his
own mill and come out ground up mighty
small.