The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-09-02
WEDNESDAY, SEPTEMBER 2, 1908.
WHO Is RESPONSIBLE

4 Special advices of T h G o b from
Boston place the shrinkage in the
value of leading American securities
during recent months at more than
sc, 900, 100000. This is a tidy little sum
for people to lose; and that somebody
has lost the greater portion of it is not
open to honest question. For nearly
one half of the estimated total is cred
ited to decline in the prices of leading
railway stocks. and more than $1,000
900, 600 to securities of railroad proper
tiles about whose intrinsic value and fu-
ture. profits there never has been and Is
not now the slightest question in any
mind.
d 1t is common to speak of the severe
market decline as process of "squeez-
ing out the water" as a Spectators
Fpanic," as due to overcapitalization of
industry and the unstinted issue of
vast mass of indigestible securities.
But this happens to be only half, or
rather less than half the truth. We
have been going it too fast in the
manufacture of trusts. The country
has been surfeited with all manner of
new stock issues until its assimilative
power has been exhausted. AS far as
the industrials are concerned, the de-
Cline could be explained in that way.
And there would naturally be a Slight
sympathetic decline in other securities.
caused by excessive caution on the
part of capital which always goes to
the extreme of either confidence or
alarm.
4 The other half the story, however,
cannot be ignored. This is the decline
of standard securities, of value known
to all men, and their failure to recover.
lWhat does 1t mean when stocks like
st. Paul and North Western, whose fu-
ture is in no wise connected with the
fate of the industrial trust. fall away
by from $5O,0OO,OOO to 100000, 600 each,
and are unable to recover? With no pam
&c at all in the air, with money not espe-
cially tight, and with nothing unfavor-
able in the business outlook of these
systems or of the country traversed by
them, why should there be this ter
rible shrinkage? Why should it affect
the whole list? Here is phenomenon
which the honest and intelligent OBJ
server will at once dissociate from any
collapse in industriaIs.
TIL e Clio e has already given the
true answer to this question, and there
are not a few others who are begin
ming to see the light. This tremendous
loss is a real loss in as far as it af-
fects the values of properties that are
managed as legitimate businesses, and
that are supported by investors and
not by spectators. And it is directly
due to the attack made by the admin
istration for political purposes upon
investments. 1t is perfectly clear that
the investing public is going to wait
to hear from the supreme court before
1T puts back any large amount of
money into properties which must. If
the contention of the government is
correct, be put through some form of
dissolution and liquidation before they
can be held lawful.
The issue to be passed upon by that
decision affects directly and vitality
every one of the great railroad cor
porations of the country; every one of
them being illegally constituted and a
daily breaker of the law if the govern
ments theory is the true one. What
investor, great or small, would not hes
itate before putting even a dollar into
any enterprise If he knew it to be thus
delicately balanced between legality
and lawlessness?
The best thought of the country has
accepted this view of the situation,