The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-09-20
A FINANCIAL DIAGNOSIS.

While the State journal can hard
Iy endorse Henry Clews' censure of
Judge lands because of that Stand
ard Oil fine in the address delivered
by the New York banker before the
Kentucky Bankers association a few
days ago, 1T believes that DIR. Clews-
ne bears the title of doctor of laws
sets forth an accurate diagnosis of
what caused the recent financial crisis
in Wall street
This diagnosis is certainly interest
ing. DR.. Clews points out that the
crisis had been pending for a long
time, and there was a violent intima-
ton of the dangerous and disturbing
element in the financial situation last
spring, eliminating in collapse of the
Wall street stock market in March.
And when Judge Lands inflicted
fine of s2e,240.OOO on the Standard
Oil company a few weeks ago, the
large capitalists of Wall street. includ-
ing the Standard OH crowd, took
alarm.
Then the trouble became acute. The
Wall street speculative multimillion-
aires-i in particular felt the shoe pinch
very sharply. They had been trying
hard to engineer a bull movement in
stocks, for they were very heavily
loaded with them. They had how
ever, met with indifferent success, for
the outside public was out of the mar
ket and refused to come in. This
unprecedented fine these leaders of the
bull movement saw was a blow at
the property of corporations. and con-
sequently at the stocks of corpora
tions. They argued that it amounted,
if enforced, to cenfiscation, and they,
as large spectators, like the rich and
moderately rich investing class, rea-
soned that if the Standard Oil COM
pany, of Indiana. could be fined and
have it's property conaseated in this
way, other corporations would be
liable to the same fate
So they reversed their tactics. In
other words they decided to run, and,
being a little lame, they started early. |
Instead of continuing their bull move |
ment in stocks, they at once withdrew |
their support from the market and be- |
gan to liquidate themselves, for self |
protection. The rank and file of the |
bulls seeing that stocks were going |
down with a rush, from this and other |
sources, were quick to do likewise, as |
if they thought the devil would take |
the hindmost, while the bears helped |
the markets descent by an unopposed |
and vigorous hammering. The bull |
leaders had abandoned it to its fate, |
and the banking interests were not |
willing to stand in the gap.
The best and highest priced stocks |
suffered the heaviest decline, and for |
a fortnight there was an outpouring |
of stocks and downpouring of prices |
that finally carried nearly all of these |
below the lowest of March. Wall |
street trembled in its boots.
The decline was accelerated by the
unusual scarcity of money on time, !
and the advancing rates for it. which
confidence in the future T
of the money market, and in the
ability of many corporations in urgent
need of money to borrow on their COLI
laterals, or obtain discounts. Fears
on this scnre," continues Mr.. Clews.
had very recently been justified by
the failure of a large iron and con-
company in New York city,
and when it was followed by a receive
ership for the Pope Manufacturing
company, the rush to sell stocks. and
the fresh break in prices. added to the
previous decentralization. The bears
held high carnival, for their harvest
was abundant enough to realize their
dreams of avarice.
1T was feared that this. failure
might prove the beginning of a long
line of similar failures. and there were
many gloomy forebodings as, to what
would come next, either In the way of
'ailures. or state OF federal action
against railway or Industrial corpora Il