Goldsboro weekly argus. [volume] (Goldsboro, N.C.) 1885-1909, 1903-08-13
LOW WATER ON WALL
STREET.

The time-honored theory that fl
nancial crises occur every ten years
has apparently been again verified
! by the phenomenal decline in prices
which has recently taken place on
the New York stock exchange. Val
les have been tending downward
ever since the latter part Of last Oc-
tober, and a few days ago they took
a headlong plung'. Stocks that ilad
been marked up far above their in
~trinsic value shrunk to half their
former prices. Under the heat of
the July sun the water has evapor-
ated from the luscious common and
preferred stocks Of the great "trusts"
until the shriveled shares resemble
fg-trees after a sirocco. It is low
water in Wall street; and a host of
unhappy spectators are there suf-
fering from the thirst that follows a
debauch.
Various explanations have been
offered for this remarkable depres-
sion. Many persons regard it as
purely reactionary-the natural
downward sweep Of the pendulum
after the great upward movement
of the past three years. Others be-
lieve that the masters of the market
have purposely hammered prices
with a view Of buying in stocks that
have been thrown over by weak
holders. A third class of observers
trace the depression to "the trust
mania," with its inflated securities,
from which the ''Water'' is now be-
ing E'squeezed'' and which are find
ing their true values, much to the
pain of those persons who invested
in them.
1t seems to US that all three of
these causes are to some extent re-
sponsible for the present state of
things on the stock market. Finan-
cial movements are governed by
certain laws of rhythm, as are all
movements in the universe. There
is a high tide and an ebb tide-a
rise and fall, which can be predicted
with tOlerable certainty and which
has an approximately regular recur-
renee. After each financial depres-
sion there is a period of quiescence,
of conservatism and caution. Dur
ing this period the wheels OF indus
try, which have never been really
arrested, move with increasing force
and pile up a vast amount of sur
plus energy in the form of uninvest-
ed capital. At length the time is
ripe for the promoter-the 'sorgan-
izer," who manufactures stocks and
bonds as a publisher manufactures
books, and fills the demand of no
longer timid investors for something
that will yield them good dividends
on their money. Confidence being
thoroughly restored, an enormous
amount of cash is poured into circu-
lation. The banks are astoundingly
prosperous. New industries Of every
conceivable variety are started up
with semi-fctitious capital, and ex-
isting industries are re-capitalized OIL
the basis of abnormal prosperity.
The expansion Of credits continues.
the ''paper'' wealth CT the country
becoming rapidly disproportionate
to the actual money in circulation.
At last this discrepancy reaches the
critical point where the demand for
cash in the ordinary channels of
trade leaves little or none for the
huge operations of the Spectator,
who is forced to borrow at ruinously
high rates, such as, for instance,
those prevailing Last fall. The de-
cline in stocks then commences,
gathering force with each drop,
which in turn dislodges another un-
DERIVING block until the movement
assumes the tragic character of an
avalanche.
The recent depression is some
what peculiar in one respect. It has
so far failed to injure the general
prosperity of the nation. Although
the shrinkage in security values has
been enormous-the securities of one
corporation alone being worth $780,
0OO, 900 less than in October of last
year-and although that shrinkage
has not been confined TO industrials
and ''trust' stocks, affecting ever
more violently standard railway is
sues likethe PennSvlvania NaunX o.k