The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1906-11-25

iHl WIZ HAS large iHltIGSlH III g. .
or industrial corporations is disturbed ny
the daily outpouring of antitrust news
from the national capital. 1t seems very
plain to Wall street that Roosevelt, III
his characteristic way, means TO steal
the thunder of men like Hearst anu
Lawson, who have been appealing 10
class prejudice. Mr.. Roosevelt in ms
public utterances talks very strongly
against the growth of private fortunes
and the increasing power of railways and
industrial corporations. In his CONVEX
sations with his friends he is even more
radical Wall street expects that the res
mainder of Roosevelt's administration
will be largely devoted to probing an
forms of business ACKNOWLEDGMENT, Mr.
Roosevelt recognizes that the public Is
pretty well stirred up over all these ex-
posures OF special privileges, and he EVIL
IDENTIFY feels that IL he does not go ahead
investigating corporations the people VIII
put the democratic party in power 10
do it.
The experience of Wall street in the
past has been that government invesu-
cations of trusts and industrial eombina-
tons has not hurt values. Wall street
saw the Northern Securities company
torn to shreds without taking q dollar
away from the earnings of the three
railroads included in that combination.
Wall street has repeatedly seen the
Standard Oil company brought into court
and operated upon while the Oil Trust
has gone on paying from s3OO00,OOO to
$50 100000 year in dividends. Wall street
has seen the Sugar trust turned upside
down with no visible effect on the earn
ings of the refineries, but never before
has the government undertaken so yigor-
GUS campaign against corporations. The
government is extending its probgn now
to the Hartman railway combination,
Hill the
Smelter trust, the Sugar trust and other
trusts and TRUSTEES. If the government
wholesale attack on corporations has ma
more effect than in former contests
then Wall ytreet has nothing to fear. But
IL the Roosevelt administration or sue
ceeding administration that is more rad
ical in its views is going to try to limit
transportation and manufacturing prof
its, then it is time for the speculative
holder of securities to think of unloading
some of his holdings at the attractive
prices now offered
1t is probably true that without The
enormous increase in the production Of
gold In the past ten years, we should see
no such prices in Wall street as are nov
recorded. Spectators in stocks are only
beginning to realize what the increased
production of gold means. 1t was the
political economists who first began To
call attention to the effects of an M
crease in the gold production two or
three years ago. Since then information
al bankers have taken a deeper interest
in the question, and the meaning of 1t ali
is beginning to filter into the speculative
mind. An increase in the supply of the
worlds gold means higher prices for ali
things that gold buys. Higher prices for
commodities and wages mean greater
profits in commercial ventures, and there
fore higher dividends on stocks. But
because stocks increase their dividends
In an era of increased gold production
bonds which have a fixed rate of inter-
est become less attractive to investors,
and therefore they sell their bonds and
buy stocks This process has now been
going on for some time. Stocks have
made great advances, while gilt-edged
bonds have actually declined in market
value. The higher rates for money are
naturally an effect of this increase in the
gold production. The first effect of an
Increased gold supply is to reduce money
rates, but then the attractiveness of all
commercial ventures greatly increases
the demand for capital, and higher rates
are the result. Some economists, who
take very broad view of the situation,
have been saying for two years that We
are in an era of high prices for COM
modities and stocks, and that the adj
vance is very likely to go much farthet.