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“The counterfeit of business is speculation. A man in business always gives value in return for his revenue, and thus performs a useful function.”

— Andrew Carnegie

When asked about the competitive threat posed by newly formed Federal Steel, Andrew Carnegie scoffed that its real specialty was “manufacturing stock certificates,” not steel.

That dismissive comment was emblematic of the 1890s boom in industrial “trust” stocks, most of which Carnegie thought had little to do with business and everything to do with speculation.

There were exceptions — the big…

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