CHAPTER LXVIII

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WALL STREET’S WILD SPECULATION, 1900-1904.

MCKINLEY’S REËLECTION AND THE DEFEAT OF BRYANISM SET THE BIG BALL OF SPECULATION ROLLING ON THE STOCK EXCHANGE.—THE TREMENDOUS VOLUME OF SPECULATION BY BOTH LARGE AND SMALL CAPITALISTS.—THE RUSH TO INCORPORATE NEW COMPANIES AND CREATE INDUSTRIAL TRUSTS AND RAILWAY COMBINATIONS.—THE ENORMOUS CAPITALIZATION OF THE UNITED STATES STEEL CORPORATION AND OTHER COMPANIES IN EXCESS OF REAL VALUES.—THE RAPID GROWTH AND POPULARITY OF NEW AND OLD TRUST COMPANIES AND THE EFFECT OF THEIR COMPETITION IN FORCING BANK CONSOLIDATIONS.—THE BOLD AND RECKLESS SPECULATIONS IN RAILWAY STOCKS OF THE NEWLY ENRICHED WESTERN CAPITALISTS.—THE GREAT NORTHERN PACIFIC PANIC OF MAY 9, 1901.—THE CAPTURE OF CONTROL OF THE LOUISVILLE & NASHVILLE RAILWAY BY JOHN W. GATES, AND ITS REDEMPTION BY J. P. MORGAN & CO., ACTING IN THE INTEREST OF THE LOUISVILLE & NASHVILLE AND SOUTHERN RAILWAY.—THE SLOWING DOWN OF WILD AND RECKLESS SPECULATION IN STOCKS AFTER SEPTEMBER, 1902, THROUGH THE INFLUENCE OF THE BANKS AND CONSERVATIVE BANKERS, THUS AVERTING FURTHER INFLATION AND A GREAT CONVULSION.—THE LIQUIDATION AND DEPRESSION OF 1903 A NATURAL REACTION FROM THE INTOXICATION OF THE PRECEDING PROLONGED BOOM.—THE GREAT RISE IN COTTON AND THE COLLAPSE OF THE TREMENDOUS BULL SPECULATION LED BY DANIEL J. SULLY WHEN HE FAILED.—THE SUDDEN FALL IN THE IRON BAROMETER IN 1903, AND THE GENERAL SITUATION IN 1904.

Wall Street changed with almost magical suddenness from depression and apprehension to confidence and buoyancy with the defeat of Bryan and his silver heresy, and the reëlection of McKinley in November, 1900. Large capitalists all over the country began to buy stocks and bonds on so heavy a scale that prices shot up rapidly, like the celebrated Gilderoy’s kite, and very soon orders poured into the Stock Exchange from people of smaller means everywhere, and a tremendous bull market for stocks resulted, with too many men staking, or ready to stake, their bottom dollar on the rise.

The speculative capitalists and large operators of Wall Street, not of course excepting many of the active Standard Oil magnates and James R. Keene, naturally availed themselves of this state of affairs to manipulate stocks on a grand scale. Having loaded up with them early at low prices, they boomed them with vigor; and we witnessed the beginning of a carnival of speculation, and an unexampled rush to form combinations of industrial and railroad interests, or trusts, and generally to capitalize the concerns taken in for many times the amount of their previous capital or real value. The stock thus created, after being admitted to dealings in Wall Street, was made active and bid up by the promoters to high figures to catch buyers, while the public, which had become crazy to buy, took it in enormous amounts. It bought in haste to repent at leisure, for, I regret to say, most of the buyers have it still; and the aggregate loss its shrinkage in price represents is to be counted by very many hundreds of millions of dollars.

But it was fortunate for both Wall Street and the nation that the inflation which ran riot till September, 1902, was then checked by the conservative action and warnings of the banks and men like myself, for if it had been allowed to continue for another half year it would have ended in a disastrous convulsion, a bursting of the bubble, which would have been felt all over the United States, and in every department of business, as in and after the panics of 1857 and 1873. I was one of the first to sound the alarm and call a halt in this dangerously wild speculation in my weekly letter dated September 13, 1902, in the following words:

“A man becomes an inebriate by getting himself into a condition where he ceases to recognize effect as following cause. Under the influence, at times, of the intoxicating beverage he will defy both law and order. This is due to the callous condition he has allowed himself to get into. The stock market of late has been productive of a similar condition of mind with a majority of people. They have been engaged now for such a prolonged period in buying, buying, buying, making profits on all their ventures, as to make them like the inebriate, callous to all adverse factors whenever they come up. High prices don’t frighten them; scarcity and high rates for money don’t frighten them; cautionary signals don’t frighten them; strikes don’t frighten them. Buying and holding on have simply become chronic with them. This may not unlikely continue to be the condition of the stock market until compulsory liquidation sets in, which the strain in the money situation will sooner or later produce. I recommend great caution on the buying side, and, better still, not buying at all at the prevailing high prices. I see no possibility of relief to the money market excepting through the importation of gold. The activity of business all over the country, together with the moving of the crops, is going to keep money thoroughly employed at high rates from now onward and all the way through the new year; therefore, those who buy stocks to carry hereafter, excepting on big concessions from present prices, may meanwhile be overtaken with discomfort from depreciation in values as well as from the difficulty of obtaining money at reasonable rates.

“HENRY CLEWS.”

The intoxication of the time having gradually given place to sobriety, and a slow but heavy downward reaction in prices, we escaped the violent and widespread panic that threatened us, and that would have been inevitable had we not “slowed down” in time. As it was, the decline was long-continued and severe, and impoverished or ruined hundreds of thousands of people, including a vast number of formerly very rich men. Both big and little speculators became the victims of the downward plunge of prices: but the country as a whole was saved from serious disturbance and depression—that is, from the effects of such a tremendous collapse and crash as menaced Wall Street during nearly the entire year 1903. This was very fortunate for all our material interests; and the conservative element in Wall Street is to be congratulated on having so successfully put on the brakes in time to prevent a collapse that would have involved and disturbed the nation from the Atlantic to the Pacific.

The year 1901 was the most remarkable in the financial history of the United States, and Wall Street was a theater of action whose performances astonished not only the entire country, but the world. Their like had never been seen before, not even during the great war between North and South. It would take volumes to fully describe and give retrospective clearness to the leading events of that extraordinary period which made the Stock Exchange continually the scene of wild excitement, daring manipulation, and unexampled inflation.

To say that Wall Street astonished the natives and made conservative business men stand aghast is no exaggeration. There were six influential factors actively at work in that year, namely, the consolidation of railroad and industrial companies at enormously inflated prices, including the disastrous Northern Pacific skyrocket “corner,” the restless sea of reckless stock speculation that swept the American people into its vortex, with all its razzle-dazzle extravagance, the transformation of this country from a heavy lender in Europe to a heavy and urgent borrower, the partial failure of the corn crop, the decline in prices for nearly all the staples except grain and iron, and the collapse in earnings and dividends of many new industrial combinations. These included The Amalgamated Copper Company, and the panicky decline in its stock, which impoverished or ruined many thousands of investors, it being first run up to 130 and then rapidly down to 60 by the manipulators, who sold out and then sold “short,” and who are said to have made more than fifty millions by the up and down movement. Subsequently even this low price was cut nearly in two, as the decline did not stop until 32½ was reached.

A mere recital of events as they occurred would be an eloquent serial story to those familiar with the alphabet of Wall Street; and there is no more interesting or exciting serial story than the stock ticker tells, from day to day, to those interested in the stock market, or one that often excites more joy or sorrow, or carries with it more weal or woe, prosperity or ruin. But the ticker, like Tennyson’s brook, will go on forever during business hours, for we shall never be without a stock market and speculation.

The transactions of the New York Stock Exchange in 1901 were so tremendous in volume as to excite wonder. But they only represented the speculative spirit, the intoxication of the time. The sales in the first half of the year aggregated 175,800,600 shares of stocks and $637,100,800 of bonds at par value, an increase of 109,906,300 shares and $346,900,700 in bonds over the same six months in 1900.

As prices soared the volume of speculation increased, and on January 7th the day’s total sales amounted to 2,116,500 shares, and then went on increasing till they reached 3,271,000 on April 30th. Then came the Northern Pacific bombshell, the panic of May 9th, when stocks came down even faster than Captain Scott’s coon, and the actual sales were still larger, but owing to the intense excitement, demoralization, and confusion that prevailed, it was impossible to keep track of them all, and the ticker registered only 3,073,300 shares.

This sudden catastrophe convulsed the stock market in a way that alarmed money lenders, destroyed confidence, and caused a general rush to sell stocks which brought them down with a crash, involving many thousands in ruinous losses. The revulsion of feeling, the change in the sentiment of the Street was as startling as a violent earthquake, and the consequences were fraught with grave disaster. Up to the very eve of this great convulsion in the stock market the dance of speculation had been fast and furious, among both “the big men” and the little, and its unlooked-for occurrence reminded one of Byron’s lines on the Brussels ball, given on the eve of the battle of Waterloo, when the sound of cannon unexpectedly boomed above the music:

“On with the dance! Let joy be unconfined; No sleep till morn when Youth and Pleasure meet To chase the glowing hours with flying feet. The lamps shone o’er fair women and brave men; A thousand hearts beat happily; and when Music arose with its voluptuous swell, Soft eyes looked love to eyes that spake again, And all went merry as a marriage bell; But hush! hark! a deep sound strikes like a rising knell, Arm! arm! it is—it is—the cannon’s opening roar!”

Fortunately, in the midst of the Northern Pacific panic, the financial belligerents combined to stop it. Their competitive buying for control of the stock had caused the “corner.” But the extraordinarily high prices to which it was bid up by those short of it were reached after the competitive buying had ceased for the want of sellers. The contestants saw the wisdom of coming to terms to restore confidence and check the havoc that was being wrought on the Stock Exchange, where prices had fallen from fifteen to fifty per cent. that day, while Northern Pacific common stock had sold up to $1,000 a share. So J. P. Morgan & Co., the bankers of the Hill-Burlington-Great Northern party, and Kuhn, Loeb & Co., the bankers of the Harriman-Union Pacific party, met in haste, and came to an agreement as to the Northern Pacific stock they had bought, the formal announcement of which caused a violent recovery of prices the next day, but not before the sweep of the besom of destruction had caused several Stock Exchange failures to be announced. The recovery was followed by a relapse of equal violence under a fresh rush to sell, which carried stocks nearly as low as in the panic, and then by a fresh recovery, a usual feature in a crisis where credit has been severely shaken and many have been crippled.

The outcome of this agreement between the two sides was the formation of the Northern Securities Company, practically as arranged for by J. P. Morgan & Co. and Kuhn, Loeb & Co., Mr. Morgan naming the directors by mutual consent. Into this repository, or holding company, the Hill and Harriman companies—that is, both sides to the controversy—put their Northern Pacific stock, as well as Great Northern stock, and the Northern Securities Company later issued its own stock to them in exchange for it.

But when, in 1904, the Northern Securities Company was held by the United States Supreme Court to be a violation of the anti-trust law, and it became necessary to distribute its assets, a new controversy arose. Its directors proposed to make an equal, or _pro rata_, distribution of the Northern Pacific and Great Northern stocks deposited with it, whereas President E. H. Harriman, for the Union Pacific, which deposited the lion’s share of the Northern Pacific, namely, $78,000,000, wanted all its stock back again; in other words, to eat his cake and have it, too. As this, if assented to, would have given the Union Pacific control of the Northern Pacific, President Hill, for the Great Northern Burlington system, naturally objected, and we all know of the litigation that followed, and in view of the glorious uncertainty of the law, it would have been rash to have predicted its final outcome.

On the Stock Exchange, April was the most active month of 1901, the sales aggregating 41,689,200, a daily average of 1,812,600. On April 24th no less than 652,900 shares of Union Pacific were sold. These specimen bricks furnish a practical commentary on the rampant speculation then in progress.

The new incorporations of the year represented an amazing amount of capital, the total being far in excess of any previous year, even that of 1899, when many of the large trust combinations were formed. The largest and probably the most heavily watered combination launched was the United States Steel Corporation, with its $508,478,000 of common stock, $510,277,300 of preferred stock, and $304,000,000 of bonds. The mania for organizing new companies and making combinations of old ones on largely inflated capital spread to every State in the Union, and the promoters of industrial enterprises, in particular, seemed to be trying to surpass each other in piling Pelion on Ossa in excessive capitalization. Their obvious purpose in most instances was to sell the stock to the public, and the poor public took the bait and suffered accordingly, for much of the stock in a great many of the new schemes became almost entirely worthless, both as collateral and in the stock market, and the rest experienced very heavy depreciation, and, figuratively speaking, like the shaky corporations it represented, went limping along with an uncertain gait and a ragged and down-at-the-heel appearance suggestive of reduced circumstances and hard times.

In every State there was a flood, if not a deluge, of new companies. In New Jersey, 2,346 were formed in 1901, with a capitalization of $4,773,702,000, against 2,181 in 1900, with a capitalization of $1,350,208,400; and in New York, Ohio, and Texas the incorporation mills were proportionately active in grinding out new companies with fictitiously large capital stocks.

Commercial and manufacturing corporations were practically unknown, that is, in any substantial form, in the United States till about 1850, and then they followed the development of the railways. In 1848 the first general corporation act, known as the Manufacturing Act, had been passed in this State, and companies began to be organized under it; but the law limited their capital and imposed other restrictions, whereas companies may now be incorporated for a thousand years with an unlimited amount of capital. The contrast between 1850 and this era of trusts marks the great and rapid progress of the country in the interval in population, commerce, manufacturing industry, banking, railway building, and general material prosperity.

The growth of trust companies has been the natural outcome of our industrial and economic development, and the freedom allowed by our laws in monetary affairs. In England, France, and other European countries the laws restrict corporation rights and privileges so rigidly that such companies would find it impossible to do business there as they do here. Hence trust companies have practically no existence except in this country. How immensely they have prospered of recent years the banks know to their cost. In 1882 the gross deposits of all such companies in the United States were $144,841,000. In 1892 they were $411,659,000; but after the new industrial combination era began, in 1897, they shot up with amazing celerity, and new companies sprang up like mushrooms in all our large cities, and here and there in small towns.

Being competitors of the banks they shared their business, and so prevented or limited their natural growth, and forced many of the bank consolidations that have since taken place. At the end of June, 1902, their deposits had mounted up to $1,525,887,000. Here was an increase of $1,114,228 in ten years to about half of the total individual national bank deposits of the country, for these on July 16, 1902, were $3,098,875,772. Moreover, in the city of New York the trust company deposits exceed, or did exceed, the individual deposits of the national banks, those of the latter on September 15, 1902, aggregating $603,565,374, while on June 30, 1902, the deposits of the trust companies, as shown by their semi-annual reports to the State Superintendent of Banking, were $760,776,124. This comparison is a very suggestive revelation of where the money goes and how the trust companies prosper at the expense of the banks.

In 1902, again, a few leading factors, or influences, controlled American finance, and shaped the real financial history of the year. These were the good corn crop, following the bad one, and other satisfactory harvests; the overstraining of American bank resources to supply the vast requirements of the new trust and flotation enterprises when the capital and currency of the country were required for its regular trade and ordinary business; the enormous increase in our foreign importations contemporaneously with a very heavy decrease in our exports; the great rise in the price of the raw materials used in our manufactures, as well as in the cost of labor; the strenuous efforts of large speculative capitalists to extend and hold permanent control of their respective railway and industrial enterprises and undertakings; the reckless and unprecedented Vesuvius-like eruption of speculation in railroad and other stocks by wealthy and newly enriched Western stock operators known as “the Chicago Crowd” and “the Pittsburg Crowd,” respectively, aided by heavy bank loans at high rates; and finally the refusal of the public to follow them any longer as buyers. This accords with what I have said about the influence of the conservative banks and bankers in calling a halt on the wild speculation for a rise which raged up to the latter part of September in that year.

The exploit, in 1902, of John W. Gates, backed by his speculative associates, in buying a majority of the Louisville & Nashville Railway stock, was his last successful venture to make a big haul of millions on the Stock Exchange. After that he and they met with very heavy losses in their continued efforts to boom stocks. But Mr. Gates was paid a profit of ten millions of dollars on his Louisville & Nashville purchases by J. P. Morgan & Co., a partner in that firm having made the bargain with him at the Waldorf-Astoria Hotel, at three o’clock in the morning, after it had been discovered that Mr. Gates had really bought control of the stock.

It transpired, in evidence, that Mr. Perkins had gone there at that hour for this purpose, and found Mr. Gates in bed. The object in giving him so large an amount above what he had paid for the stock he had just bought was to get him out of the way as a mischief-maker, for with him in control of the Louisville & Nashville, there was no telling what he would do to demoralize the Southern Railway system. He was looked upon as a bull in a china shop, to be coaxed and tempted out, regardless of expense, before he began to toss the crockery with his horns.

So when he said to Mr. Perkins, “As you want the stock so badly, to keep the Belmont board in control and protect the Southern Railway, I will let you have it if you will pay me ten millions more than it cost,” the proposition was promptly accepted; and the deal was closed on this basis. The Louisville & Nashville and the Southern Railway companies were supposed to have been jointly interested in the purchase, but the Gates stock was finally turned over to the Atlantic Seaboard Air Line.

Buying control of the Louisville & Nashville by Mr. Gates was a far bolder operation than President Hill’s purchase of the stock of the Burlington & Quincy for the Great Northern, or than the Moore Brothers’ purchase of control of the Rock Island and their subsequent great inflation of its stock and bonded debt, because Gates bought it merely as a speculation, without any desire to manage the road. He was fortunate in being able to sell it so easily to those he had frightened by his daring coup.

It is interesting to compare the leading influences, or principal factors, in Wall Street in 1903 with those of 1901 and 1902. Stock Exchange transactions in that year were very much smaller than in 1902, but not nearly as much so as the total in 1902 had fallen below those of 1901, the year of the greatest activity and excitement in this memorable speculative period. The sales in 1903 aggregated 161,099,800 shares, against 188,497,600 in 1902 and 265,945,700 in 1901. The largest total on any one day in 1903 was 1,539,000, against 1,996,000 in 1902 and 3,202,200 in 1901. The largest in any month in 1903 was that of January, 16,002,300, against 26,568,000 in April, 1902, and the smallest in 1903 was 10,731,000 in November, against 7,884,900 in June, 1902.

The barometer of the iron trade was still rising at the opening of 1903. Good crops had been gathered and were being sold at good prices; railway earnings were large, and railway companies were making heavy expenditures for new equipment and improvements, and every department of business and manufacturing industry seemed prosperous, with the iron trade enjoying its full share of that prosperity. So heavy, indeed, was the demand for iron and steel that the capacity of our works was unequal to it, and we were importing iron and steel largely, as we had been in 1902.

But in June the iron industry experienced one of its time-honored lightning changes. That barometer suddenly fell. The demand subsided with surprising celerity in all lines, and by November prices in some of these were fifty per cent. lower than in January. The boom in the iron trade which commenced in 1899 was at an end after lasting for four years. At the end of the year, however, the trade began to revive, and 1904 witnessed a slow but steady improvement in it, as the reports of the United States Steel Corporation’s earnings have shown. Consequently that highly inflated company, after being forced in 1903 to suspend dividends on its common stock, was encouraged to continue them at seven per cent. on its preferred stock. But this carried cold comfort to the hundreds of thousands who had been impoverished by buying these stocks at the high prices at which they were floated here and in Europe.

Before the end of 1903 liquidation on a large scale in stocks had run its course and exhausted itself, and the market quieted into comparative steadiness; and in 1904 we had, on the whole, nothing more than a dull trading market, with the outside public very largely absent. But there has been a general tendency toward slow improvement, although the net earnings of both railways and industrial companies have, on the average, shown a heavy shrinkage, a reflection of the reduced volume of trade and more or less industrial depression following the overstimulated boom of previous years. Just as 1901 was the year of the most unbridled and unrestrained inflation, 1902 witnessed a constant battle against the tendency to a downward reaction, and 1903 saw and felt the reaction, which was all the more severe because it had been so long delayed.

In the cotton market, however, as wild and extraordinary a bull speculation raged in 1903 and the early part of 1904, under the lead of Daniel J. Sully in New York, and William P. Brown and a Southern clique in New Orleans, as ever excited the Stock Exchange. Through their manipulation, helped by the statistical position of cotton and the prospect of reduced production, cotton rose, under an enormous and unprecedented volume of transactions, from about eight cents a pound here to seventeen cents, with frequent violent fluctuations, and Mr. Sully was avowedly planning to carry it up to twenty cents, when he found his resources insufficient to carry, on a falling market, the amount of cotton sold to him. So after going up like a rocket, he came down like the rocket stick, although his previous profits by the rapid rise had run into several millions. It was well that a halt was thus practically called to this excited speculation and excessive advance in cotton, for it had inflicted heavy losses upon spinners and caused the closing of many mills. Sully’s failure was the logical result of a too daring speculative campaign, and reminds us of that vaulting ambition which overleaps itself and falls on the other side.

Glancing at other countries, I find that Canada made more material progress in 1903 than in any previous year in her history, business increasing substantially in nearly every branch of trade and finance, stimulated by bountiful crops and 150,000 immigrants. But in England the continued decline of British Consols to the lowest prices in a generation reflected a low financial barometer, the legacy of the costly South African war. France, however, made the best showing of the year in Europe in finance and general prosperity, while in Germany a vigorous industrial revival lifted that country out of its previous depression consequent on over-speculation and bank failures.

One question of great interest in relation to our new industrial combinations is whether a proper readjustment of their hugely inflated capital and excessive charges will place them permanently in a condition of efficiency, productiveness, solvency, and prosperity, or whether they will ultimately drift, one by one, into the hands of receivers through their inability to make both ends meet, or become hopeless wrecks, like the Shipbuilding Trust. The same fate is liable to overtake many other large flotations into which there was a too copious flow of water, supplemented by chicanery and misrepresentation. Many of these have been organized in disregard and defiance of legitimate finance, and have exposed the stock market and all the monetary interests depending upon them to risks and disastrous disturbances inseparable from organizations whose foundations rest largely on wind and water and on prospectuses and book-keeping that often failed to tell the truth, the whole truth, and nothing but the truth.

It was well that a stop was practically put to the creation of such inflated industrial combinations, as well as to needless combinations and highly inflated stock issues among the railroads for power and profit and stock-jobbing purposes, by the course of the Wall Street banking interest, to which I have referred, in coming to the conclusion that the over-watering of new companies, the marketing of new stocks, and the rise of prices on the Stock Exchange had been carried beyond the point of safety, and that the outside public had bought more speculative industrial and railway stocks than they would be able to carry on a falling market.

They argued, therefore, that their buying power and their inclination to buy were nearly exhausted, and that the stock market had become largely a field of action for certain heavy and reckless speculators, each of whom had suddenly made many millions by the formation of new trusts and railway combinations. Some of these had become multi-millionaires through the early sale of the heavy amounts of United States Steel stock they received in exchange for their plants when that huge corporation was launched in its sea of water. In this they were like some others who enriched themselves by their industrial combinations in the West before they branched out in Wall Street.

Very large bank loans to the brokers of these big operators were gradually called in and fresh accommodations refused them. Without loans it was impossible for them to buy and run up stocks to inordinately high prices, as they had been doing. Therefore they found that, to a large extent, their occupation was, like Othello’s, gone. They were eagles with clipped wings.

The heavy liquidation by large and small operators in 1903 caused a heavy and almost continuous decline in prices on the Stock Exchange. Many rich men were compelled by this shrinkage and the calling in of their loans by the banks to sell out heavy lines of both railway and industrial stocks. Not a few of these lost practically all their capital, while nearly all the rest sold a large part of their best holdings to protect the remainder, which became unmarketable.

This period of liquidation and depression left Wall Street and the country at large in 1904 thickly sprinkled with poor rich men, capitalists with a good deal of property, real and personal, including stocks, but all unsalable in the market except at an almost ruinous loss. Their policy is naturally to hold on to what they have left till the tide turns, and if they are strong enough to be able to do this they will doubtless meet with their reward. History repeats itself in Wall Street as well as elsewhere, and with this prospect in view they can cheerfully say, as the old song says, “There’s a good time coming, boys; only wait a little longer.”

Meanwhile, those who were active in Wall Street during this eventful period of inflation and speculation must note, more than others, the vast change that has come over sentiment and opinion in Wall Street and everywhere else.

Both Wall Street and the outside public have lost the faith that they had in many of the stock-market leaders, the men who were once followed blindly in their schemes of inflation and regarded as omnipotent in their execution. The power and prestige of these leaders, for the present at least, have passed entirely away, and none are so poor as to do them reverence. The devotees of the Street no longer worship the old idols.

Wall Street and the public also lost faith in all new ventures and new railway and industrial bond and stock issues, as well as in the good judgment and good faith of the promoters and corporations concerned. The revelations of fraud, chicanery, and excessive capitalization that have been made in the courts and elsewhere, have undeceived even the dullest and most credulous believers in the schemes and schemers that took the country by storm in the days of Wall Street’s wild and pyrotechnical speculation.

Out of evil there cometh good, and this great change from blind credulity and inordinate inflation to discriminating distrust and severe contraction has exerted a wholesome effect in paving the way to a sounder, safer, and generally better state of things both in and out of Wall Street. But meanwhile one bad sign is noteworthy. The large corporations, being unable to market new bond issues, are borrowing heavily from banking syndicates at five to six per cent. on notes running from one to three years. There is danger in this, and the way of the borrower on these terms may, like that of the transgressor, be hard. But the end may justify the means; and the nation is still growing as rapidly and as grandly as ever in our history from ocean to ocean.

There is nothing to provoke pessimism in the magnificent strides we are making in the march of progress; Wall Street is always sure to reflect this progress and our growth in material prosperity, as well as any periods of depression we may encounter, for it is the great barometer not only of the country and the times, but very largely of the world.

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