Then the Spanish War was begun and brought to the nation an unexpected amount of self-confidence, which quickened once more its industrial activity. Such were the internal conditions which made for growth, and the external conditions were equally favourable. In 1898 America harvested 675 million bushels of wheat, and the enormous quantity of 11 million bales of cotton. By chance, moreover, the production of gold increased to $64,000,000; and this, with the enormous sums which foreign countries paid for American grain, considerably increased the money in circulation. This was the time for the stock market to enjoy a similar boom. During the crisis it had nervously withheld from activity and looked with distrust on the West and South, which were now being prospered by great harvests. Everything had formerly been mortgaged in those regions, and from the despair of the Western farmer the ill-advised silver schemes had arisen to fill the eastern part of the country with anxiety. But now the election of McKinley had assured the safety of the currency; the silver issue was laid low; the debts of the Western farmer had been paid within a few years by magnificent crops, and the Western States had come into a healthy state of prosperity. Now the stock markets could pluck up courage. In the stock market of New York in the year 1894 only 49,000,000 shares were bought and sold. In 1897 the market began to recover, and 77,000,000 shares were exchanged; in 1898 there were 112,000,000, and in 1899, 175,000,000 shares.
In the winter of 1898–99 the formation of trusts commenced in good earnest, and this was a glad day for the stock markets. Large amounts of capital which had been only cautiously offered now sought investment, and since the market quotations could rise more quickly than industries could grow, it was a favourable time for reorganizing industry and making great combinations with a capital proportioned to the happy industrial outlook. In the State of New Jersey alone, a state which specially invited all such organizations by means of its very lenient laws of incorporation, hundreds of such combinations were incorporated with a total nominal capital of over $4,000,000,000. To be sure, in just this connection there was very soon a recoil. In December of 1899, a great many of these watered-stock issues collapsed, although the industries themselves went on unharmed. But this activity of the stock market, in spite of its fluctuating quotations, was of benefit to industrial life.