August 13. 1887





The   Record   and   Guide.





1067





THE   RECORD   AND   GUIDE,

Published every Saturday.

191 Broad^way, IT- "^T.

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JOHN 370.





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J. T. LINDSEY, Business Manager.





Vol. XL.





AUGUST 13. 1887.





No. 1,013





The assignment made by Ives & Co. led to a rally in stocks yes¬
terday ; but does not the career of the head of that concern point
a moral which our railroad corporations should take to heart?
Here we find an adventurer getting possession of prosperous rail¬
way systems and entering into negotiations to control a groat
trunk line. The mere fact of Ives' partial success is enough to
engender a feeling of insecurity among all who hold even gilt-
edged corporate bonds and stocks. Every corporation, it seems,
with a great surplus and with marketable assets, is in danger of
exploitation by daring and unscrupulous speculators. Is not the
English system of distributing surplus earniuga and assets after all
the correct one? The Pennsylvania Central, the Northwest, the
Baltimore & Ohio aud other great svstems are said to be well man¬
aged, because of the costly asssets in their treasuries and the large
surpluses they keep after paying dividends. But *' where the
carcass is, there will the vultures be gathered together."
It is these accumulated securities which are absolutely
at the control of the heads of the companies which excite the
cupidity of people like Ives. What he did with the Hamilton &
Dayton and the Vandalia may be copied by some equally daring
and conscienceless operators if they can get possession of corpora¬
tions with overflowing treasuries. Even when there is no dishonesty,
a maladroit personality like Mr. Robert Garrett may make " ducks
and drakes " of a property like the Baltimore & Ohio, which in
times past was rich in valuable assets. After all, the best way to
manage a railroad is to pay out the money it earns to its stock¬
holders.    This is the English system, for which there is much to

be said,

------------------------------------------•-----------------------------------------■

The fact has been brought out in financial circles that since July
1, 1886, there has got into circulation among the people $77,507,183.
In other words, while the amount in the Treasury was then and
remains something over $385,000,000, the amount in the hands of
the people has increased from $1,353,000,000 fco $1,330,600,000. There
has been a decrease, of course, in the national bank notes, but an
increase in the gold coin, silver dollars and fractional silver. In
view of this increase the Financial Chronicle asks: " Is there
another country on the face of the earth that has had such an
addition to its note and metal circulation during the same period ?"
A Treasury official says that about $69,000,000 is nearer correct.
But, argue those who think we ought to have more currency,
could we not make good use of additional currency in view of the
enormous development of railroad building, house construction,
and additions to the general business of the nation?





While Wall street is generally felicitating the Treasury Depart¬
ment upon its efforts to get money out of the Treasury so as to
relieve the business community, there are some dissatisfied persons
who claim that Secretary Fairchild is now coining as much gold
and silver as is required by law, aud in so doing he is playing into
the hands of the bears in prices. The Mining Record charges that
the coinage of gold for the past July was smaller than that of any
month for a quarter of a century. Ifc was at a rate that would
give us only $31,000,000 new gold coin for the year 1887. Yet on
the 30th of July the Treasury owned over $89,000,000 of gold
bullion, of which $3,365,000 was received during July. The silver
coinage law requires that at least 3,000,000 standard dollars be
minted every month. The coinage for June was $300,000 less
than this required sum, while in July only $600,000 was coined,

barely 46 per cent, of the prescribed amount.

---------«---------

According to these critics, if Secretary Fairchild really wished
to relieve the money markefc of all danger, he would promptly
convert his gold bullion into coin ; and he would add $4,000,000
monthly to the amount of silver standard dollars minted. He not
only waves the option that the law gives him of adding to our cur
rency, but he actually disobeys the law in uot coining tho minimum
sum of $3,000,000 a month, which an act of Congress makes imper¬
ative.

---------»---------

The Labor party seems to have struck a snag. Ifc is now found
to be composed of fcwo wings, each of which hold divergent views.





Henry George, McGlynn and their followers are adherents of
Thomas Jefferson^s no government, laisser-faire, theories. They
are radical Democrats, and favor free trade, free immigration and
free liquor, but the other wing of the Labor party accepts the
theory of government propounded by Laealle and Marx, which
looks on the central authority as the collective agent of the com¬
munity to execute the people's will. In other words they are Fed¬
eralists, though of a different type from the school of Alex. Ham¬
ilton. This wing says that common schools, free highways, public
parks, free hospitals and dispensaries, the government control of
railroads and telegraphs, is State socialism or communism, and
that throagh this road must the republic go if the condition of the

masses is to be elevated.

—--------•----------

But for the time George and McGlynn have the largest follow¬
ing and the best machinery. Their personality give them a pres¬
tige such as no socialist has yet secured. So the Labor party, for
a time at least, will be run upon the lines of the old Democrats. It
is a curious fact that this new and threatening organization should
divide upon a theory of government as old as the foundations of
the country, and which was the ground of difference between the
followers of Jefferson and those of Hamilton.





The most important business fact developed during the past week
is the probable partial failure of the corn crop. The government
statistical bureau says that on August 1st the condition averaged
only about 80, against a promise of nearly 94 a month earlier.
Corn had a splendid start, and the acreage planted was the largest
ever known. With a prosperous growing season we would have
had 3,500.000,000 bushels of corn. The terrible drought continued
after the government report, and it now looks as though we may
not have over 1,700,000,000 bushels of corn, although some rain has
fallen within a day or two. The last two annual crops were, how¬
ever, good ones, and we carry over a surplus large enough to give
us a fair average of corn. In the Atlantic, Southern and North¬
western settlements the corn crop promises very well.
----------«------__

This shortage of corn is not an unmixed evil. It gives addi¬
tional value to all the cereals we grow this year. In competition
with the rest of the world we have been forced to parfc with our
wheat at prices that were not remunerative. The farmers thisyear
will get as much for their crops as if corn had been abundant ; but
the effect of the shortage will be felt next year and the year after,
for it wiil tend to diminish the supply of food for animals and will
make these dearer. The shortage of 1881 affected injuriously the
hog crops of 1883 and 1883, and had a good deal to do with the fall¬
ing off in railway returns, and so depressed the price of stocks.
----------*----------

Master Workman Powderly wants stringeu: laws passed to punish
speculators who get up deals and corners in food products. He
thinks it monstrous that the State should permit conscienceless
speculators to enhance artificially the price of the necessaries of
life. He evidently has never heard the reasons which political
economists give for regarding speculators as benefactors of society.
They, it is claimed, save the world from famines by checking the
consumption of food when the crops are bad. Before there were
option sales in the Chicago wheat market, violent fluctuations in the
price of wheat were very common. The market would vary as
much as a dollar to a dollar and p.-half per bushel in a few months'
time. In spite of the enormous dealings in " phantom" wheat of
late years the price of that cereal has been kept unprecedentedly
low, while the variation in its price has averaged from 19 cents to
35 cents for a bushel in the course of a year. Ordinarily specula¬
tion prevents violent fluctuations in price. Unwise cornerers
invariably come to grief, as witness therecentsmashesof the wheat
cliques in Chicago and San Francisco. Ifc is estimated that these
two combinations lost $15,000,000, the greater part of which went
into the pockets of the farmers, and all of it was a loss to the rich
speculators. Surely no laws could punish these people worse than
did the laws of trade.





In years past we have repeatedly called attention to the wild
predictions of disaster made by the Eastern press if the silver coin¬
age was continued. Ifc will drive out gold, ruin the credit of our
government issues, debase our currency, and send the country to
the dogs generally. It was alleged that our government spent
$3,000,000 in gold monthly to buy silver bullion to be coined into
silver dollars which nobody wanted, and which would not circu¬
late. One of the journals that made, perhaps, the greatest number
of statements respecting the silver coinage was the Evening Post*
Yet here is the way that paper now talks about the condition of
our currency:

It is certainly a reassuring fact tbat tbe gold basis of the circulation has
been increasing more rapidly than  tbe circulation itself, a circumstanc
commented upon iu admiring terms by the London Economist.    If doub
are felt regarding the large increase of silver certificates {over |56,0t)0,0f
during the period in question, it should  be borne in mind that althor
the government haa paid only 75 or 76 cents for each dollar of sV^^
coined, upon which the certificates are issued, it  has received 100 <