auspiciously for all speculative interests. But in February came the notorious break in Richmond and Danville, from 219 to 130, that flurried the stock market and increased the general uneasiness concerning all investments. Nevertheless, the total volume of business transacted throughout the country during the year was very large, no less than $350,000,000 being expended in new railroad construction.
The general financial and commercial conditions that prevailed during 1883 may be summed up as follows: There were 9,184 failures with aggregate liabilities of $172,874,000, as against 4,735 failures in 1880 with aggregate liabilities of only $65,752,000. Not only was there a large decrease in the total volume of trade, making retrenchment in nearly every line of industry an imperative necessity, but a general distrust of the integrity of all stocks and all bonds prevailed, with a consequent enormous decline in the market values of many securities, including even those of the new telephone consolidations. An eminent financial writer in referring to the speculative fever that had raged during the previous two years, 1881-1882, declared that:
Nevertheless, notwithstanding these discouraging conditions, or the gloomy outlook for the coming year, or the nine thousand failures in other lines of business, or the low market value of the stock of certain large licensee companies organized to absorb the handiwork of the speculator as portrayed in numerous small and unprofitable exchanges, the art of establishing new telephone exchanges, especially in small towns and villages, progressed even more actively in 1883 than ever before. So many investors believed that it was only necessary to establish any kind of an exchange in any kind of a village, no matter how small or how unprofitable the rates might prove, to secure profits of three for one, that the editor of an electrical journal wrote: "No fable concerning the telephone is too gross to receive credence; no prediction of its future can be wild enough to provoke a smile." And the daily papers fed this delusion by constantly referring to millions of dollars alleged to have been made in the telephone business, although the parent company had paid no cash dividends prior to January, 1881, all of which statements many readers accepted as applying solely to exchanges established in small villages, just as three years earlier many investors believed that large profits would be derived from building small branch railroads. And had it not been for the many investments made by farmers in railroad securities, in the aggregate amounting to several millions of dollars, from which no return was secured in many cases, it is quite probable that the farming community
