The Minneapolis journal., 1903-12-04
Only 2-CENT Daily in minneapolis
A Healthful Weakening.

Trust securities have been far more
injuriously affected by the decline in
the stock market than have the rail-
road securities, for liquidation in the
latter is nearing completion. The fas-
cination of stocks for the speculative
lyo inclined is immensely weakened
when the market shows q decline,
persistent and irrepressible, in spite
of the frantic efforts of shrewd ma
nipulators to keep up the hctltlous
values they have created out Of the
resources Of their active imaginations.
J. J. Hill has made an improve
ment on Morgans term, ''undigested
securities by characterizing such inn
aginary values as indigestible secu-
rites A vast accumulation of in
dustrial securities of recent years is
positively indigestible. The slump and
the disillusion of the most sanguine
have wrought encouragement to or
ganizers of industrial corporations.
Many of them have been sunk in the
bottomless abyss and will appear no
more. Many were born only to die
from suffocation in the enormous
mass of ambitious issues. The effect
of the reckless overcaDitalization and
liberal use of the waterpot is shown in
a recent statistical summing up Of in
dustrial interpretations in the New
York Journal of Commerce.
The decline Of incorporation fever is
at once seen in the figures for Novem-
Der, which show the aggregate capi-
talization Of new corporations in east
ern states during that month to have
.S115,140.OOO in November, 1902, and
$50S,S50,00O in the corresponding
month in 1901, the latter including
the Northern Securities company
y The total for the eleven months Of the
present calendar year was $1,572,201,-
900 as compared with S2,520,S2S,65C
for the corresponding period in 1907
and s3.510,S55, 900 in the correspond.
ing period in 1901. The capitalization
in the latter year was, Of course, aug.
mented by the exploitation of the
United States Steel corporation issues
which were very much watered anG
have, in these latter days Of a veal
stock market, suffered grievously. Tht
absorbers of inflated values began tt
+ have severe attacks Of indigestion ever
in 1901, but it was not until this yea
that there came q very decided reali
zation that the printing presses hat
turned out very large amount o
paper, which could not by any con
ceivable trick of stock market manipu
lators be absorbed.
The over-capitalized trusts whic1
have survived the fierce liquidation O
the past year and the latter portio
of 1902 are now sailing under double
reefed topsails, nautically speaking
They are reducing expenses and cut
ting down dividends on the vas
amount OF watered stock.
1t is easy to understand yalu
shrinkages when it is recalled tha
in this country, common shares ar
issued as bonuses and real values ar
represented in the preferred share
and in the bonds. For instance
1899, when there was riotous living Q
stock speculation and the craze fc
industrial organizations was rapid
developing, Of S3,201, $4,000 secur
ties issued in the first six months, onl
$12O,O00,000 were in bonds; $1,053
100000 in preferred stock an
s2,O28,850,0 ,000.in common stock. TT
latter is pretty nearly pure waite
Such figures tell the story of stoc
market troubles better than anythir
else.