The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1904-01-22
gan from his dazzling pinnacle ard
grind his reputation into dust.
ThrAe e cAak Rln.s.a

grind his reputation into dust.
Three Great Blows.
Three great blows were struck ~ Mr..
Morgan during the year just closed.
showed that his highly eulogized sude-
ment In launching new enterprises was
at least as faulty as other mems. Some
people do not content themselves with
saying that Mr.. Morgan merely COM
mitted errors of judgment in creating
corporation and the Mercantile Marine,
asserting that he was actuated solely
by the motive TO gather into his own
strong boxes every available dollar
held by the public.
In amy event, he had created two
vastly capitalized corporations, into
which large investors and the public
both here and in Europe placed their
money, relying chiefly upon his tudg-
ment. They bought Steel preferred
around 80 and Steel comrnon between
40 and so. They saw the former go to
so and the latter TO 10. They bought
Mercantile Marine preferred around 60
and the common around 20. They saw
the former go to 10lk and the latter to
8. The Mercantile Marine bonds, $780,
600, 900 of the 5000, 900 issue, were
taken by Mr.. Morgan's financial friends
here and abroad at 80. These bonds
have Il nominal value now of rs. AT
liIilCo, Sll0llS NAVE UScu IIIdQG ~
sell them. the best bid that could be
got was 80.
The shipbuildins Fiasco.
A smaller matter, but one that in,
jured Mr.. Morgan in the opinion OF
many New York capitalists, was the
Sheldon syndicate he had organized in
the S%hipbuilding company fiasco. This
syndicate put up about 81, 600, 900 to take
over S%hipbuilding company bonds at 70.
These have a nonina value now Of
about Ia. but no large amount of them
can be marketed at that price. There
Is no market at all for large quantities.
The subscribers to this syndicate are
large banking firm and individual cap
i~talists, such as e. H. Hartman,
SAINT Fish and others, who are not in
the habit of losing hundreds of thou
sands of their own money.
British or European investors lost lit
tie or nothing in the S~hipbuilding com
pany, but they did lose heavily in the
Steel corporation and the Mercantile
Marine company. These foreign losses
account in a measure for the feeling OF
hostility for Mr.. Morgan abroad.
Morgan Not a Loser.
Another matter which has irritated
the losers in the Morgan ventures is
that neither Mr.. Morgan himself. nor
his firm, has lost any money. He is
probably richer by millions of dollar
today than he was a year ago. as far
as money goes, no matter how much
he has lost in reputation.
1t has never been Mr.. Morgan's pol
icy to tie up his own money or that OF
his firm in any of his enterprises. He
has always used the money of other
people. keeping his own assets in liquid
shape. so that they are ready for any
emergency.
tIfS DraAf CfranOfh. n md voNC-Ar reCf6G
not in his own wealth, but In his abil-
ity to get capitalists all over the world
to put up money for anything hat he
said was good" Therefore his loss OF
prestige, the proof established by the
collapse in value of the Steel and the
judgment was anything but faultless,
and the suspicious aroused by the
~Shlpyard inquiry have erected a barrier
between Mr.. Morgan and the capital
he has always relied upon that may
prove inSurmo2ntable.
MI. Morgan is not a young man by
any means. He will be 81 years old on
April IL next. 1t took forty-ive years
OF incessant labor and almost an
broker successes to place him upon the
heights Of anne which he occupied a
year ago.
Net only has Mr.. Mofgan been blamed
directly for losses sustained in corpora
AhS O"Ab wv ~
has been held responsible for the general
big shrinkage In the value Of all kinds OF
securities.
The Grievances Summarized.
Thu Wall street grievances against him
may be summed up as follows:
/. That he greatly overdid the promotion
business.
2. h he set an example in over-capi-
talization which was initiated by others,
producing a flood OF securities that had
o. \ n stand M rr-1tny, 4 Nc "a
began to go back.
8. That he created conditions which made
the whole market for securities vulnerable
and invited the bear raids which proved
so disastrous to prices during last spring
and summer.
I That he was the originator of the new
school of high finance which is now SO
completely discredited.
8. That his judgment of the publtc's ca
pacity to absorb new securities was com
pletely at fault.
8. That his judgment Of the trade future
and the amount of shares and bonds that
the steel and other corporations could rea-
fault.
Z. That his failure to live up to the high
reputation ne had established had worked
vestors to forget and had done almost ir-
reparable harm to American investments
in foreign centers.
A study of the achievements Of MIR.
Morgan makes two facts glaringly appar-
ent, namely:
1. That as a ~reorganizer he has known
nothing but success.
z. That as An Organizer he has neve.
made a brilliant success.
In other words he has the faculty of
detecting and correcting the blunders and
mistakes Of other men, but this same fac
ulty has not saved him from committing
the same blunders.
A Builder Up of Wrecks.
Mr.. Morgan made his reputation rs 4
builder-up of broken down railroads. He
contented himself for over thirty years
with hat kind OF labor before he en-
barked upon the new field of organizing
industrials. Some years ago, when his
fame for reorganization was at its height.
the Wall street term for the word was
"re-Morganization."
While practically every Industrial or
ganization Mr.. Morgan has created is a
failure from the viewpoint of the stock
holder and the %bondholder, 1t should not
be for gotten that a dozen of the bigger
railroad systems in the country owe their
prosperity to his brain and genius. And
In building up these railroad properties.
taking hold Of them when they were
financial wrecks, Mr.. Morgan probably
made as much money for different stock
holders as his ventures in the Industrial
field have caused other stockholders 10