The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-08-11
in ~sw 1919 Inches
TUESDAY, AUGUST II, 1903.
WHY VALUES ARE UNSETTLED.

1t has puzzled people to understand
why the values of many securities
have fallen when there is no change in
the properties that they represent. The
stocks of rich and splendid systems
of railroad, whose prosperity is as
sured beyond any contingency, have
gone off as if they were in danger Of
disruption. What is the cause of this
universal decline?
Of course there is some sympathetic
relation between all the stocks dealt
in on the exchanges, SO that a weak
or strong market is reflected in chang
es all along the wavering line. But the
fluctuations and the drop have both
been far greater than this would ac-
count for. There is evidently a deep
seated distrust, an unexpected fear,
which has nothing to do with the
daily money market or stock report,
or with the earning capacity of these
great and settled properties all over
the country. What is it?
The answer will be found, perhaps,
In another question. What would
happen to the securities and theSprop-
critics of the big railroad companies at
the East if the supreme court should
happen to decide that a single own
ership of the stocks of different cor
porations engaged in interstate COM
merce is Illegal; that it is crime
under the terms of the Sherman act;
and that, where such relations exist,
the securities absorbed must be parti-
toned among the stockholders of the
original constituent companies?
This is very practical and peril
nent question. For more than half
century the combination of common
carriers has been going on in this coun-
try without molestation. 1t has shaped
the whole development of the railroad
systems of the United States. The few
great companies that serve the East
ern states, for example, represent doz-
ems or scores of corporations that have
. been combined, purchased, assimilated
in some way. The law must be i'm
partial. If the process by which the
entire railroad business of the East
has been shaped is illegal, nothing
can save it from dissolution And
what would then happen to these
thousands of millions of dollars rep
resented by stock and bonds no
human being can forecast. It would
grind their value to powder.
This possibility cannot have es-
capped the mind of any careful invest
or. He has had placed before him
new question; he has been filled
with a new doubt; and his natural
qualms are not connected at all with
the actual value of the properties with
their earning capacity, with the GER
tafnty or size of dividends. He has
to think, when dealing in Pennsylva-
mia or New York and New Haven
or any similar stock, whether what
he buys is a representative of value,
Or something that the courts will de-
clare mere waste paper unless it's
worth can be calculated through an
impossible readjustment of intricate
past transactions.
For the first time this question has
been presented to him. He cannot es-
cape it. 1t haunts the market. Is it
any wonder that buyers are scarcer
and warier? Is it strange that the
market for such property should
weaken and drag? Such are the con-
sequences Of an onslaught upon the
system of practical operation and the
fixed legal Interpretation of the legiti-
mate rights of great properties. No
intelligent or prudent man could fail
to take into consideration the possi-
bilities raised by legal proceedings
which affect not one corporation merely