The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-07-30
A Definite Warning.

Wall street modified Its leap anu
bound movement, yesterday, ana the
disposition to stocks seemed TO De
wholesomely conservative, the bargain
hunters becoming cautious. as II they
would wait to see If the bottom figures
of securities had been reached, after tum-
bling fifty points or so. 49,
The crowd in Wall street. has had some
very good advice from experienced and
conservative bankers Mr.. Hepburn, ex-
controller of the currency and vice presl-
dent of the Chase National bank OF New
York, speaking of the craze for promoting
new enterprises and floating new secur-
tiles, says we have gone too far and too
fast and have done too much business Tor
our capital and pushed up values inordl-
nately. Banker Seligman REGARDS the
crisis induced by overspeculation as prac-
tically over and looks hopefully upon the
prospect Of prices which will attract IN
vestors, while some money strlngency Will
be experienced this autumn, the prevail
ing money rate of about six per cent In
dicating hardening at crop moving time.
Mr.. Seligman thinks the industrial and
commercial interests will ultimately go
thru the liquidation process because OF the
large imitation Of commodity prices ana
the advances in the price Of labor, result
ing in minimizing profits. The conserva-
tive manufacturer and business man who
has not made tactical mistakes will not
suffer; those who have unwisely gone be-
yond their depth will feel bad effects. The
country, however. is in too substantial
business and crop condition for CONNER
ciaI or financial crisis to occur. Which.
indeed, is most probable.
When, in 1900, the election gave assur-
ance Of the trend of the political future.
after the free silver agitation, there be-
gan a tremendous investment and specu-
lative demand for stocks and buying with
borrowed capital on a large SCALE there
were strong warnings by conservative
heads that such conditions would newt
ably carry prices higher than the actual
worth Of the securities, in the estimation
of investors, and the market being left
without the support Of real investment
demand, collapse was only question OF
time Every decline was followed by
fresh and enthusiastic support which
raised many shares far In excess Of their
intrinsic values, the crowd taking good
and bad shares alike, without paying any
attention to intrinsic worth, while new
securities were launched by the billion
and carried by the speculative forces sky
ward In 1901 the fury Of this specula-
tive movement was checked and chilled by
q backset which tolled the bells for num-
Der Of people who tempted disaster IN
spite Of warning and danger signals, the
commercial and industrial interests es-
Gaping serious backset by reason OF the
substratum Of soundness. The season OF
acute liquidation and defalcation was
comparatively brief. The railway COM
panies were in a strong position. trade
was fiourishing, the country was hopeful.
The panic Of 1901 checked the rage for
consolidation schemes which, outside the
United States Steel corporation, were
small compared with the record OF 1899
when companies with an aggregate capt.
talization of $4,000, 0o0, 900 were organized
In 1902, speculative activities waned
and the undigested and indigestible Sc.
curities began to trouble Wall Street and
thru last winter the speculative spirit
was sluggish, until delayed liquidation
came with a rush; loans on boom paper
were called in; holders Of good, high grade
stocks hustled to sell to raise money tt
meet the slump, and many Of them art
probably wishing they had needed pas
warnings and cooled off in time. Infla
ton always has to be paid for by some
body. That Is one of the absolutely GER
tain things. The gamblers pay for it thi
time. The commercial and industrial in
terests Of the country. under the tuition
of the strict school Of conservatism. will
safely breast the speculative disquiet