Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-05-31

"An these improvements, all this new
equipment had to be paid for, and the
money was raised by the issue of bonds,
usually on per cent basis a little be-
low par sometimes at 312 per cent Tor the
most important and prosperous roads, ana
the banks furnished the money from ther
deposits and from sales of securities 10 per
manent investors. Almost every maufac-
turer in the country has been increasing
his plant and enlarging his business. ms
has caused increased demand Tor ra"
material. fuel and labor, and as the lnous-
tries and commerce of this age are con-
Quoted on a credit basis, the banks were
called upon to furnish the money to keep
the wheels in motion. The volume OF cur
rency has not expanded as rapidly as the
business: rates of interest advanced as
money became scarcer, and certain OF the
most important sources OF supply were cut
merly absorbed $50, 600 900 or $S0,OOOOOO OF
the securities of railways and other cor
porations every year, but since the sensa-
tional Investigations and the enactment OF
the new law regulating the investment of
their assets they have put this money lnlo
real estate mortgages instead. lhey nave
furnished the means FOR the erectioh VI .Le
big apartment houses and hotels and the
skyscrap ping office buildings that nave beeh
springins up rapidly here IN New YORK.
The development in building mas peeh quite
as remarkable as in other lines OF develop
ment. e,
There came time continued my man.
cial philosopher when the investors OF
the country were Satiated with STOCKS anu
bonds and would not take any more Ihen
the railroad companies were compeiieo 10
issue short-tme notes-three and 11Ve years
which they sold to the banks TO raise
money to pay for their rebuilding ana I'M
proyements. These notes were popular pe
cause they were convenient 10 hanule anu
easy to sell, ano the banks t1oK sh .rie non16
not take any more. Thus the credit OF the
corporations was expanded to the very
limit, and finally the end was reachea.
The capacity of the country to ABSORB
stocks and bonds and short-time notes was
exhausted. The investing public had bought
all it could carry.
Public Confidence Shaken.
simultaneously with this crisis came
the Presidents recommendation for led
eral control Of corporations and the
action of Congress. Mr. Bryan advocated
government ownership; others demanded
official regulation of rates, and all Kings
of propositions were advanced concern
ing the restrictions of corporate power
and the reduction Of charges. Inc STATE
legislatures butted in, and fifteen OF
them passed laws arbitrarily reducing
passenger rates to two cents Hlile
without scientific inquiry and without
considering the consequences upon tne
management of the roads or the STOCK
holders 1t was a political move, an cpl
demic Of anti-corporation fanaticlsm'
combination of social1stlc asltations, per
sonal revenge on the part OF poi1ticlans
whose railway passes were cut Off, ana
the efforts of demagogues to demonstrate
their solicitude for the welfare Of the
people. -
All this tended to excite d1strust ana
apprehension on the part of investors.
retired business men, widows. trustees or
estates and charitable institutions guard
ians of orphans and those who are re-
sponsible for the funds Of others. Then
came the disclosures about Harrimans
Alton transactions, which were known
to everybody on Wall street, and had
been published as current news in the
financial columns of every prominent pa
per in the country at the time they oc-
Cured. But the public has short mem
DRY and people read their newspapers in
a hurry. Unless they are directly in
terested in a subject they do not con-
meet the events and disclosures of one
day with those of another or recognize
the significance of the news The inves-
LEGATIONS of the interstate commerce
commission did not disclose a solitary
fact that was not known and had not