The weekly tribune and the Cape County herald. (Cape Girardeau, Mo.) 1914-1918, 1915-10-22

were enormously inflated and largely
fictitious. Many of the railroads had
gone into the hands of receivers, yet
at that time there was net law upon
the statute books of the Uni-cd States
undertaking to regulate railroa. rates.
Neither had the Interstate Commerce
Commission been created.
The panic Of 1884 furnishes another
startling illustration.
Standard Railway st.,:k sniIenly de-
clined from ten to 20 per cent. This
produced a panic upon he stock cx-
change.
Grand & Ward failed wi,r assets Of
only S7O00,OO0 and liabilities $40 GuO,-
000 of securities from its vaults. 1t
vestigation showed that the president
Of a National Bank had stolen $1,000
600 of securities fro mits vaults. 1t
was also learned that the Metropolitan
Bank had loaned to one firm S2.43G
500, which was six times the amount
of its capital.
These events created distrnSt, which
resulted in a sudden lowering IF all
speculative stocks and among these
none fell more raDiGiy or disdstrousiy
than the inflated capital s-O,k Of rail-
roads From .h2 Atlantic TO the Ia
cific railroads W nj into the hands of
receivers.
Let us pause Il moment. There was
no rate Legislation 20 bring aiuat these
failures. The panic came because Of
insufficient regulation of banks, or
trust companies and of transportation
concerns. If there had been a wise
inspection of our banks-if there had
been a rigid regulation of great fnan-
ciaI institutions-if the issuance of
watered stock and speculative securi-
ties had been made impossible-that
panic, which cast a shadow over this
country for months and years, would
have been averted and the railroad
com pdIllrS anu DdllhS NOulu iSiNC btCll
all the better for it.
Again | challenge attention to the
fact that there had been no national
and practically no state interference
with railroads.
The panic of 1893 again ilIustra-
ties my thought. Surely at this time
the Interstate Commerce Commission
had not laid its blighting hand upon
the transportation business of the
country. Surely at this time the rail
roads had been allowed to run without
erferance-"busines was untram-
meled." The genius of the railroad
promoter was permitted to develop it.
self without interference.
Yet the Aldrich monetary report de- |
cIares that railroad after railroad |
went into the hands of receivers
some from over-capitalization, some
because they had undertaken to go into
business which did not belong to tran
SpOfJaIlOn com pdHItS.
Indeed, the immediate cause of the |
panic was the failure of the Philadel- |
phia and Reading Railway, which had |
attempted to gain control of the great |
coal fields, and also under
took to gain control of great Transport
tatiOn companies operating in New
The road was loaded with
an enormous floating debt The final
collapse of the company depressed the
stock market and brought about fail
lre after failure.
At last came the fearful panic OF
that year. The Commercial and FL
1anciaI Chronical of that day summed
IL the situation in this language:
"a stock dividend of 100 per cont
ash in January and receiver in May.
This is a brief statement of a method
If financing which has led up to and
lrecipitated one of the worst stock
)anics we have ever known.
The story is almost counterpart of
hat of the Philadelphia & Reading r.
r, which paid per cent on its pre-
erred income bonds Just before going
ntO the receivers hands,"
| could pursue this theme for hours
md pile illustration upon illustration
md fact upon fact. Enough has been
aid to demonstrate the fact that bust
less unregulated by law becomes as
he individual unregulated by law
dangerous to the community and dan
rcrOus to itself.
The great problem that lies before
IS is to regulate-but regulate wisely
TO regulate with the idea not Of des- ,
roying but of cOnserving-of cOnserv-
ny business interests of the country Z
nd at the same time conserving the
party has set itself. 1t
nay make mistakes, but it will pro-
eed more in the spirit of the student :;
nd philosopher than in the spirit of .
he mob. 1t will be guided by the