October 11, 1890





Record and Guide.





469





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Vol. XLVI.





OCTOBER 11. 1890.





No. 1,178





IT is becoming more apparent every day that tbe prices of stocks
in Wall street are gradually adjusting themselves to the rates
for money. Three or four years ago the New York banks held a
large margin over the surplus reserve, and money loaned at 2 and
214 P®!' cent. Prices of stocks naturally conformed themselves to
those rates. A good security that paid 4 per cent steadily sold at
par; 5 per cent securities were worth more than par. Everyone
supposed that this reduction of the rate of interest would be perma¬
nent, but this was not so. A revival in business followed; money
has been activ ely engaged ever since and has loaned at higher
rates. Neither is there any immediate prospect that it will not
continue to bring 5 or 6 per cent for some time to come. This being
the case, stocks obviously would become less valuable until they
increased their dividend rate. For the most part they were unable
to do this, and as capital could obtain better returns by being
invested in other directions it left the stock market and
has as yet refused to go back. As soou as the railroads can adjust
their rate difficulties so that they can carry freight at a profit, and
as soon, consequently, as they can increase their dividends so that
money invee^ted in such securities will pay as good a rate of interest
as it will when invested in other ways, we may expect to see a con¬
tinuous rise in prices. Meanwhile, there does not seem to be much
danger in dealing on the bull side of the presen t market. Circum
stances conspired against values during the past week. The reports
of a panic in American securities on the London market which
were displayed in a sensational way on newspaper bulletin hoards
and not removed after the reports were shown to be exaggerated,
scared a good many people, but though the decline extended over
many stocks it was not retained. After a drop such as
has been steadily progressing for the past few weeks,
there must come a reaction. It may amount to much
and it may not continue for a long time, but it means at
least temporary recovery of one-half or one-third of the decline.
And apart from this readjustment of the price of stocks to the
rates of money there does not seem to be any important clouds in
the financial akj. There is every prospect that we shall get excel¬
lent prices for our surplus cereals; and if the present comoinations
and alliances mean anything, they mean better rates for railroads,
and consequently better dividends. The wise speculator in times
like these is he who has the courage to buy in the teeth of a falling
market.





THE different countries of Europe are still trying io adjust them¬
selves to the modification of industrial conditions produced
by the McKinley bill and the recent silver legislation. Various
trades in Austria will be greatly injured by its passage. The
mother-of-pearl industries, particularly, are in danger of being
totally destroyed, and the workers are in such stress of mind about
it that they have been asking the Board of Trade minister to plead
for them so that the provisions of the new act mi^ht, at least, be
applied with mildness. A large number of the skilled laborers
employed in this branch of business have resolved, it is said,.to emi¬
grate to the United States. France, also, continues to be very much
agitated over the tariff legislation; but it is difficult to see what that
country will gain by retaliation. Three-fourths of oiu:
$64,000,000 imports to France consist. of cotton, wheat and
petroleum, which France eitber does not produce herself
or produces in insufficient quantities. These commodities
with the exception of cotton might be procured, at some increase
of cost, from Russia, but as that country is not of the least import¬
ance to France as a customer, taking only about $3,500,000 worth a
year, she would not be much of a compensation for the loss of the
American markets. A duty on cotton would, of course, simply
pimish France herself. As we anticipated last week, Auirtria-
Hui^;ary is considering a return to a specie basis by redeeming
some 200,000,000 paper florins, leaving 112,000,000 in circu¬
lation, which will represent gold instead of silver coin. The sale ot
some 50,000,000 florins of silver coin is also being discussed—a move
wbich may well set our silver speculators to thinking.   Rumors





are current also in Grermany that Russia seriously thinks of a
speedy adoption of the gold standard. The effects of our Silver bill
are also beginning to be seen in England. The rise in the gold
price of silver is being succeeded by a gradual rise in the gold price
of general commodities. Out of thirty-six of the most important
staples of trade, three-fourths have risen in value since silver
ceased to fall. Cotton, for instance, has risen 9.18 per cent, twist
1.48 percent, weft .71 per cent and shirtings .91 per cent.





THE investigations of the Fassett Committee this week, while
they have not proved sensational, have been none the less
interesting. The three Commissioners examined have been
nothing if not frank, and while doubtless they could have
" revealed " more than they did, if so it pleased them, they none
the less deserve credit for having so unblushingly acknowledged
their utter lack of fitness for the positions they occupy. When, by
the simple practice of asking obvious questions from the heads of a
department it can be ascertained that this department is run
exclusively for the benefit of Tammany Hall and its allies, that the
inspections are worthless, that the giving of bonds is a mere
form, that half the expenses of the department are utterly useless,
that the excise laws are a mass of contradiction of which no one
can make head or tail, and that, furthermore, these Commissioners
have done nothing whatever to reform these abuses, no one can
feel very much douH as to one, at least, of the causes of our misgov¬
ernment. Of course this was all known before, in a sense—that is,
we knew that notoriously bad places retained their licenses and that
the protests of restpectable people frequently had not the slightest
effect. Now we have additional information as to the way the law is
evaded. With incompetent and unscrupulous inspectors, with lax
Commissioners who, though appreciating, make no attempt to
remove the abuses, there is every opportunity for mismanage¬
ment and none for reform. We shall doubtless hear from this
investigation later. Senator Fassett, among other objects, really
intends, by his investigations, to provide the data for sweeping, if
not radical, changes in the details of our administration; and there
can be no doubt that the excise department will come in for its
fair share of the reform. A good deal more, however, will depend
on the next mayoralty election than on Mr. Fassett's laws.





WHETHER we like the fact or not it is not to be questioned,
that the trend of reform these days is very strongly
towards socialism. It is not that people are becoming professed
socialists, but in facing the problems of the day they find what
seems to them to be the readiest and most satisfactory solution in
State action. Especially in European countries, one of tne most
difficult questions which has troubled philanthropists is how to
provide for the respectable poor, who, through sickness,
accidents, old age, or unmerited misfortune of auy kind, are
without the means of support. It is in this field, during the last
half century, that private charity has been most active; but,
despite the immense amoimt of good that has been done, the num¬
ber of noble institutions established and endowed, the amount of
suffering that exists in all large cities—the result of what may be
broadly termed the vicissitudes of life—is appalling and heart¬
rending. Individual effort has done little more than mitigate it in
a casual way, alleviate slightly a few of its most apparent manifes¬
tations. Those who have studied the matter deepest are unanimous
in declaring that from a widely-organized effort only can any
result, permanent and adequate, be obtained. In its superficial
aspects this matter may be regarded as a sort of " bread and butter
problem," a mere feeding of the hungry. But this is only a super¬
ficial view, for, as Amiel says : " The animal in us must be satis¬
fied first, and we must first banish from among us all suffering
which is superfluous and bas its origin in social arrangements
before we can return to spiritual goods." The most noteworthy
attempt that has been made to deal with certain phases of the diffi¬
culty is the scheme of national insurance which has been put into
working order in Germany ; and news now arrives that an attempt
is to be made in England to pass legislation to establish national
insurance and pensions for workingmen in that country. It is pro¬
posed that every workman, between the ages of twenty and sixty,
sball contribute weekly twelve cents to a general fund, collected by
employers and transferred by them to an official treasurer. Tbe
government is also to contribute cent for cent what the men do,
and this fund is to be devoted to relieving families of deceased
workmen, workmen permanently incapacitated, and workmen who
have attained the age of sixty-five years. In all of these cases the
assistance given is to amount to $2.50 a week. The politicians are
now discussing the measure, or perhaps it is more correct to say
that aftor the manner of their kind they are dallying with it, trim¬
ming their sails a little this way and that. Mr. Gladstone says that
he has always been in favor of national insurance for workingmen.
Lord Randolph Churchill also gives a quahfied support to the
scheme, and Radicals and Socialists look kindly on the
measure. A bill is to be introduced into Parliament, and the matter
will then become a legislative question, over which, of course,