The National tribune., 1903-10-22
END OF THE srocx-wArER1Ne CRAZE.


Lake Superior Company. together with a
cyclone of destruction which has come
upon number Of much less meritorious
enterprises, show that investors are at last
beginning to return to sound appr-ecia-
ton of business principles. Scores of the
smaller companies which have gone down.
inGicting loss of tens of millions OF dol
lars upon foolish investors, have had little
merit, and their fnanciering and promo
ton was simply robbery of the gullible
For example: At least % of these com
panies have been senerget;cally pushing
stock on the market to, the amount OF
about SAL 100000 while having real as
sets of much less than S1,0OO,0OO 1t
seems amazing that people could be got to
buy such inflated stuff, but, as the
gamblers say, "a sucker is born every sec
ond," and this country has an immense
number Of people who seem anxious to
throw their money away.
The Consolidated Lake Superior Com
pany was O corporation of a different
class. 1t was organized in 1901, and took
over the stock of enormous steel, iron min
ing. railway, water, paper and power COM
panies operating in the neighborhood of
Sault Ste. Marie, and using the immense
water power of that locality. The actual
valuation Of the companies so Incorporated
was $50, 900. 900, but it was capitalized and
the stock put on the market at $117,COO,-
900. or nearly four times what the prop
erty was actually worth. This was such
defiance Of the ordinary business rules
that it seems incredible that sound bust
ness men should have invested in the
stock. They did, however, paying as high
as so cents for the preferred stock and 3G
cents for tho common. This was still dou-
BILE or treble the rightful valuation, and
though tho company did 4 fine business
manufacturing articles for which there
was a good demand. producing them at a
low cost, and selling them for fair profit
the company has gone into absolute bank.
ruptcy, and Its $117, 600 900 has shrunk to
the pItiful sum of $SS5,0OO, or less than
ons-hundredth Of its valuation. There Is
not money enough left in the treasury to
buy feed for the horses, which are starry.
ing.
There has been much talk of restrictive
| laws for men engaged in performances like
these and heavy fines upon them. The
| absurdity Of these aad their ineficiency
compared with the swift and certain &C
| ton of the laws Of business are now finely
| illustrated. The chief promoters Of this
uncomfortable imitation are now more
| bankrupt In money and character than
they could be under the Judgment of 9
court. Tho men who put In the original
$50, 100000 and have financiered the en-
| terprise up to this time have lost, virtually
everything they had. Before letting theil
greed overmastsr their judgment they were
worth, say. 10000. 600. were getting 6
good return upon that amount Of capital
and enjoying Ct the same time q reputa
ton of great value a. capable, honest, sue
cessful business men. Now all this IL zone
Their $50. DOC. 900 has shrunk to less thar
81, 900. 600. and that will probably be swal
lowed up In the legal proceedings, ant
they have, therefore. been ''fned" and tn.
fine has been msrcilessly collected. $50,
100000. They have undergone degrade
ton Of character and q moral punishment
which many Of them will naturally fec
greater In suffering than Z tsrm In tn,
penitentiary. Their dupss have beel
avenged. for the managers have dupes
themselves verse than they did the suck
ers' they started out to catch.