Imágenes de páginas
PDF
EPUB
[graphic][merged small]
[graphic][merged small]

Europe. The increase in the values of the principal stocks on the market since November has aggregated an almost incalculable sum, which must be expressed in billions.

This increase in values is not all nor perhaps mainly fictitious. Very much of it is real and is likely to be permanent. There are at least two reasons for an increase of real values-the assured establishment of the gold standard, and the consolidation of competing corporations. Now for the first time since the Civil War all fear of possible change of our currency standard is utterly gone from the public mind. And an interesting measure is thus given of the incalculable loss and of the serious retarding of our progress caused by the long agitation of the greenbackers, the silver men and the whole brood of currency-inflationists. But for them we might have reached a period of somewhat similar prosperity years ago.

The other reason why much of this increase of values is real is the consolidation of hitherto competing companies. If competition be eliminated or reduced and the issue of stock be fair and the management good, the saving of waste ought to increase their earnings.

Many of our great railway securities-of roads that have been long established and are well managed-have for a long time been kept at prices lower than their real value. A stock that is secure and that pays 6 per cent. must rise, so long as capital remains as abundant as it is, to 150 or even to 200-that is to a 4 per cent, or a 3 per cent. income-yielding basis. But there is no power on earth that can long hold the price of any property higher than its earning capacity warrants.

Fortunately the era of wrecking and of reckless gambling in great properties is passed. But there is still danger that incidental and insufficient reasons will cause a too rapid rise in stocks of insecure value. When all the world is rushing pell-mell into Wall Street, that is a good time for careful investors

country and in the world that the owners of billions of it were content to invest it in securities at a price that will yield only 2, or 3, or at most 4 per cent.

ment.

But all this buying has not been for investMuch of it has been to secure the control of properties for consolidation with other properties; and most of it has been sheer speculation provoked by the activity of the market. For the moment money is abundant, and confidence is great. A man with any credit can borrow easily. Now the part of all this stock-buying that is done for purely speculative purposes-done with money that men expect to put back into productive uses as soon as they are done speculating, or with money that has been borrowed—this much of it is on a false basis; and for this much of it a day of reckoning is bound to come. Damage is wrought to character as soon as men begin to feel that there is a shorter road to riches than the honest production of wealth. To rush into Wall Street to speculate or to send money there purely for speculation instead of employing it in productive ways-this makes for demoralization both of values and of character. The extent to which this abnormal activity is demoralizing we shall know later; but nothing is more certain than that we shall know in due time.

But it will be an interesting experience for many a man to recall on a quieter and wiser day—how men (and women too) came to New York in such numbers as to overcrowd the hotels, all to trade in stocks; how Wall Street was filled with a mob; how the brokers and their clerks were utterly exhausted; how a seat in the Stock Exchange sold for $70,000; and how some great fortunes were made in a day; and how life at last swung back to routine work with health, and every body thanked Heaven that the fever was past.

to calculate the earning capacity of what they A

buy very conservatively.

[blocks in formation]

SAVING IS HARDER THAN EARNING

ND it is not in Wall Street only that we are paying the penalty of undue excitement over our good fortune, and are running the risk of losing our calmness. In Texas the continued discovery of oil is suddenly enriching many men-good fortune this, surely; but in the feverish organization of corporations (in Texas of all states in the Union!) some men will not only lose money but will suffer economic demoralization.

[graphic][merged small][merged small]

There are symptoms, too, of land-booms in the Northwest, because of the rush of many settlers. These are the penalties of prosperity-expériences that put to the severest test the sturdy qualities of the people.

There seems no reason to fear that the foundations of our prosperity will be shaken, but nothing is more certain than the loss by many individuals of savings that were hardearned. The faculty of saving money is much rarer than the faculty of making it, and it calls for the exercise of a higher degree of good judgment and of more self-restraint. In a word, it requires more character.

THE

A GAMBLING EPIDEMIC

HE gambling instinct in a large part of the population has been thoroughly aroused. Woman have gone wild with excitement; clerks and even messenger boys have staked their earnings or their borrowings; and the sensational newspapers have been publishing the winnings of chorus girls and of head waiters. You have read the story of the butler who, overhearing the conversation of his master and his guests at dinner, staked all his savings next day and made $14,000. All through the West and parts of the South small shop-keepers and the whole army of clerks have besieged the local brokers' offices; and orders came in to Wall street in such a rush as to cause the physical collapse of the stock-exchange. The New York brokers simply could not keep up with the business. There were hours when a million dollars worth of stocks were sold every minute.

In the Texas oil region there has been a simultaneous excitement. New companies have been formed as if by contagion, and every part of the population has been gambling in lands and in shares. Fortunes have been made there too fortunes little or big have been picked up in every part of the land; and the foundation has been laid for a large crop of failures in the future-not bankruptcies that will seriously affect the business of the country, but failures of individuals who mistook gambling for thrift and neglected the homely lessons of careful management.

The damage done to youthful character and to the character of those who are economically weakest lessens the resources of the nation more than the rise in values seems to add to it; for the real resource of the nation is the economic sanity of the whole people. One

man of sturdy thrift and of productive energy is worth more in money as well as in character to a community than a dozen rich adventurers. And, after all, the great mass of sturdy people have read about the excitement, have smiled, and gone on with their work. Great as the number of the excited seems to have been, relatively it was very small-perhaps one-half of one per cent. The astonishing thing about any epidemic is how few victims it finds, not how many.

IS THE SOLID SOUTH TO YIELD AT LAST?

WORLD

WORLD-WIDE economic revolutions have taken place, Asia has been opened to Western trade, Africa has been partitioned, Egypt has been reclaimed, and dynasties, ministries and policies have changed, since the talk began about splitting the solid South; but it was as solid in 1900 for Bryan as it was in 1868 for Seymour. Grant tried to break it by appointing Longstreet to an important office; Hayes tried it by appointing Key; Mahone tried it-there has not been a Republican administration since the civil war that did not try it.

The reason given for the failure of every effort has been the fear of Negro domination. But now there are two new forces at work. The mass of Negroes have been disfranchised in many of the states, and soon will be in more, and the full flood of industrial prosperity is now having effect. An increasing number of men hold fast to the gold standard and believe in expansion. Senator McLaurin of South Carolina, therefore, has a better chance to divide the whites in his state than any man has had before for thirty years, and his practical defection from the Democratic party has secured the help of the Administration in encouraging the growth of a respectable white Republican party in South Carolina. President McKinley has appointed two Gold-Democrats to important positions in that state-Mr. John G. Capers to be United States District Attorney, and Mr. W. G. Chaffee to be Postmaster at Aiken-both against the advice of the old Republican leaders there, and it is predicted in South Carolina that both these men will, with Senator McLaurin, permanently separate themselves from the Democratic party— certainly if it hold to silver coinage and anti-expansion.

It is noteworthy that Senator McLaurin is

[ocr errors][ocr errors]
« AnteriorContinuar »