Wall Street As A Gauge Of Business Prosperity
( Originally Published Early 1900's )
People decry Wall Street speculation without a correct knowledge of its character. The Street is not a gambler's paradise, but a place where hard, honest work tells. It is a public benefactor and once, at least, saved the country. The center to which the surplus money of the world flows for investment. THE district known as Wall Street embraces more wealth in proportion to area than any other space of similar dimensions in the world. Considering even the mere thoroughfare known by that name and extending from Trinity Church to the East River, the same assertion holds good. This latter limit is the one mentally placed by the great majority of our people upon the financial heart of the country, that throbs with the daily ebb and flow of millions, infusing life into all our vast enterprises. The Wall Street region includes in its wealthy grasp the large majority of New York banks and other financial institutions, including savings banks. It is the great center of the insurance companies, life, fire, and marine; of the great Trust Companies which command thousands of millions of capital, and are the custodians of many of the largest and most wealthy estates in the country. Finally, the region known as Wall Street has virtually a contingent population of three millions, which is just about the census record of the thirteen original states when they cut loose from Great Britain and asserted their independence. In addition to the financial institutions as above stated, Wall Street has banks with large capital connected with all foreign nations. China, no less that the comparatively contiguous London, is represented by banking institutions here. It has been the habit of too many people well-meaning people, too - to decry Wall Street as hurtful to the morals of the country and injurious to our best business interests, -all of which is mistaken. Wall Street has been very aptly described as the "business pulse of the nation," and that is what it is, in the truest sense of the term. As the mercury in the thermometer denotes the degrees of heat and cold, so do the fluctuations in the Wall Street markets show the rise and fall of the business activity of the country. Let there be any activity in mercantile or manufacturing circles, and it is immediately reflected in the Stock Exchange and the other exchanges where values are dependent upon business activity and financial confidence. On the other hand, causes that influence the outside world unfavorably have a depressing effect in Wall Street, and the prices of securities and products take a lower turn. These are the results when natural conditions are allowed to prevail. Of course there are times when speculative syndicates get control, and by their manipulations create artificial conditions and artificial results. Then it is that panics are liable to occur; in fact, I doubt if there has ever been a panic in Wall Street that was not due to the work of such manipulations. Wall Street is a place where the laws of cause and effect are conspicuously potent, and it is as impossible for any combination of men to resist these laws without making trouble as it is for a human being to defy the forces of nature. An irreverent operator in grain speculations, commenting once on the failure of a pool to put up the price of wheat and maintain it in the face of a big crop, said, "It is of no use trying to buck against God Almighty; he can upset the bulls every time." To the student of affairs there is more suggestive truth expressed in these few terse words of a disappointed speculator than in whole columns of the tirades preached against Wall Street's ways by those ministers who have only a superficial idea of the subject they are talking about. Wall Street is not a gambler's paradise. There is no place in the business world where more hard work, closer calculation, keener insight into affairs, and philosophical and conservative conclusions are required than in the offices of its bankers and brokers; there is no class of men who watch events more closely than the operators in its markets. In the stress of war times it has been to Wall Street that the government turned for help. It was from Wall Street that the assistance once came which made a continuance of the government even a possibility, and it has always been ready to respond to any call, when financial or business problems were to be met and solved. It is very true that men have taken a gambling advantage of opportunities afforded by this great market, but these are not the men who have made it reflective of the business prosperity, not only of this country but of other countries,-a place where surplus money from all over the world flows for investment in the securities of the corporations which are dependent upon the material development of the United States of America- the greatest land under God's sunlight. No, we cannot do without Wall Street. How would our one hundred and eighty thousand miles of railroads have been constructed without Wall Street? These great pioneers of development, prosperity, and civilization would have remained exceedingly limited in their extent and scope if the bonds to build them had not been negotiated by Wall Street financiers. Think of the fertile lands that have thus been thrown open to millions from all nations of the globe, and the enormous increase of wealth that has followed this opening of vast national resources. Then again, look at the army of well paid employees connected with the railroads themselves, who, together with those who work in the interdependent trades, - railroad building, car building, and railroad supplies of every description, - amount to nearly two millions. While it is unfortunately true, as I have pointed out in my book, "Twenty-eight Years in Wall Street," and in other publications, that disreputable railroad projectors and managers have, especially through the medium of construction companies, made railroads the means to their dishonest ends; yet in spite of such abuses this vast railroad system, advanced and supported by Wall Street capital, has been the chief instrument for a national increase which has no historic parallel. Not only is Wall Street indispensable to this country, but foreign nations also are feeling the benefit of its operations more and more every year. The London Stock Exchange and the Paris and Berlin Bourses would suffer if the New York Stock Exchange were to be closed for a week or even for a day; the progress of great industries dependent on them would languish just as surely as our own railroad, telegraph, and other enterprises would suffer in the failure of the great financial fountain from which they draw their invigorating tonic. Enterprise everywhere would be depressed as if seized by a sort of financial paralysis. What folly is this enmity toward Wall Street! Let us condemn and cut off its evil, parasitic growths, but let us recognize and glory in the fact that this great financial center is fast approaching the point at which it is destined to become the enormous clearing house of the world's enterprises and industries. In the course of evolution and a higher civilization we might be able to get along comfortably without Congress, but without Wall Street, never.