Tonopah daily bonanza. [volume] (Tonopah, Nev.) 1906-1929, 1907-10-29

TO the person Of ordinary knowledge
of investments A year ago. when
experts knew that almost every one
Of these stocks was selling az an In
Hated value, At least iifty per cent OF
which was water or even az thin a
substance as hot air. there was mod
erately fair activity in the mark
Fortunately. the buying was not par
ticipated In To any extent by the gen.
eral public. But making this allow
ance. IL is certain that large num-
Der OF people OF considerable means
specuIated In these inflated securi-
ties.
During the current year the
shrinkage in the quoted values OF
these securities has amounted. to bill
lions and billions and then some
more billions of dollars. The prices
at which they are going begging to-
day are scarcely half those at which
they were eagerly snapped up year
ago. This, we say, must be a puzzle
to persons of merely average inform
alton concerning stocks.
The most puzzling fact is that the
industries Tor which these securities
stand are all enjoying the same
measure of prosperity at this time
that they were year ago. Railroads,
mills and factories are all as busy,
or very nearly SO, as they were
twelve months since. Their earning
capacity has scarcely been curtailed.
Their dividend-paying capacity has
been somewhat reduced because of
the advance in the cost of operating.
This enhanced cost has been mostly
in labor, and that would apply to
every industry. Those using consid-
cradle amounts of raw material have
to pay higher prices for much of this.
But on nearly all of these stocks tie
usual dividends ruling in flush times
have been paid with the same
promptness as the striking of clock.
Intrinsically the stocks are worth as
much today as they were year ago.
| The shrinkage has been entirely spec
ulative.
With an eye to the public welfare,
when the inflated prices were pre-
vailing, the Times took pains to re-
peatedly warn the public against
promiscuous investments in a market
at such an unusually high level. The
warning was made emphatic against
buying these stocks on margins We
have nothing to change in our policy
in this regard. There is never a
time when it is quite safe for the
average person to put his money into
the stock market in this way. 1t is
gambling, at the best, and gambling
is never good business policy. While
year ago it would have been unjus-
tifiably rash to invest in stocks whose
market value had been by shrewd
manipulation so much inflated, what
ever has been the cause the result
is manifest that the water has been
pretty thoroughly squeezed out Of
most Of these speculative stocks by
the stringent money market. !.
Now in country of such vast re-
sources as ours, of such colossal ac-
cumulated wealth, of so immense a
population, there is no chance of our
railroads becoming useless or value
less. There can be no long-continued
stagnation for any of our industrial
enterprises. Mines must be worked,
mills must be operated, finished
j products must be turned out to meet
the pressing demands of the time and
the country. While money has been
SO unusually close and dear, and
while labor has been exacting such
unusually high wages, in spite of the
great activity prevailing in all our in
dustries it has been more or less diff
cult to obtain ordinary net revenues
out. of many of these enterprises.
Money may be close still. but we
think 1t is a temporary condition. The
natural increment of wealth in crops
and mineral production is so great
and the demand for our goods abroad
is SO active that there is no way to
prevent steady accumulation of our
stock of money. Labor has been as
pressing necessity as money, but
there has come decided turn in the
tide. The business world has taken
| account Of itcaIf ona +ho 500 LII,