The Sun.
London, England, 1866-12-03 00:00:00

A Fraud Panic.

There has THE
En
aCgßeloSdthdeOalFoflBd6i6s.cussion as to
what pre-fix would justly describe the panic of
1866. It has been termed a financial or credit
bathis
d word
business
dealersto imply
iamoney
pisst'ahliwiiccah.shtßandey mainly brought the calamities on the
land. It was not a commercial panic producpeadmb.cya
over-trading or by over-manufacturing. All
are credit panics, and resolve themselves into money
difficulties, whether the cause arises from speculatin
in produce, or from speculating in stocks and shares.
If the panic had arisen out of the bad business of
dealers in money when the concerns on which the
directors had brought ruin had been found out and
passed into liquidation, taking with them the mass,
of bad paper floating about, a more healthy state
would have supervened, and confidence gradually
have been restored. Though millions upon millions
have been lost—though compAnies by the score have
been swept into bankruptcy and disappeared, exer-

cising in themselves uo longer a pernicious influence
—the tone of the market at this moment is, if any-
Th
thin gemea,adnwra
dsrwo:ori
aestnlneh
dti
stghhoN avel
thatind
with
al ofot
etnavhattei
srynryeiafsntoetri
:To f
appearanceet
thanr period of the panic.
eetytdiscounthe fahc aeso been
eoabewnna enrkk,nbtooi
known
abund-
ance
for
f
for a lengthened
s aperiod.
of money continuing
Nor can complications be
exercise any pernicious effect. The world is
at peace, and though nations are arming
there is no sound reason advanced why this peace
should not continue. What, then, is the cause of
the unsatisfactory state of things on the Stock Ex-
change ? We believe that the true pre-fix for the
panic of 1866 has not yet been given. It may be
humiliating to English pride to have to acknowledge
the real cause. There was a time when the word of
a respectable English merchant was said to weigh
as heavily as his bond ; when honour was his guide,
and his well-known commercial integrity gave him
the greatest facility in concluding contracts ; when,
in one word, he inspired confidence. The transac-
tions which have this year come to light have given.
this feeling the rudest shake it has yet experi-
enced. Bitter as may be the truth to those whose
honour is still preserved among the people to
whom the nation has confided its financial transac-
tions, there is no disguising the fact that the crisis
has been produced and is now kept up by fraud.
The panic has been a fraud panic. People in the
City have no belief in each other's word. Published
reports are looked on as mere traps to catch the
credulous and unwary ; the more solemn the state-
ment, the greater the suspicion with which it is re-
garded. It is in vain for accountants to certify to
the truth of balance-sheets, when they have a hun-
dred times before certified to statements which a
few months have shown to be a concoction of lies.
The law relating to joint-stock enterprise is alike
unsatisfactory to shareholders and to creditors. The
swt
hr uegagrl i s
ee b
ebteht w
lie ekneltyh et sho
baerceehmo led evri se
tiamnd s,
wc rhe
idl
ei t ors,
openwillprolatn and oinf
deed, directorshu.
swindling
pass unpunished.lingof promoters
hu-
miliating to think that this great centre of the
commerce of the universe should be reduced to such
a position. 'While the savings of the nation are
accumulating, the money is hoarded wherever the
owner considers he can place it with safety, instead
of finding a natural outlet in the channels of pro-
ductive industry. The most difficult problem that
suggests itself to the minds of those in the posses-
sion of available means is how to invest their
money. At the same time that every kind of pro-
perty is a drug iu the market, and no better time has
existed within the memory of man for picking up
securities that will return an immense interest on
the capital employed, few dare invest. And why ?
Because they have no confidence in the honesty or
in the truth of those who manage the various con-
cerns which have absorbed the joint-stock enter-
prise of the day, It is almost impossible to exag-
gerate the terrible blow given to credit by the col-
lapse of such concerns as OVEREND, GURNEY, and
Co., and the London, Chatham, and Dover Rail-
way. Both stand prominently forward as samples
of incredible mismanagement and dishonesty—the
one, the greatest of our money-dealing houses,
the other among the greatest of our railways.
Among numerous enterprises a few dishonest
concerns may rationally be looked for, but the
commercial world may well stand aghast, when
in the highest places the worst specimens are re-
vealed, and little surprise can be felt that under the
black shadow of these baneful trees a crop of
poisonous fungus should have sprouted up. A
system of railway mismanagement, involving pro-
ceedings to which a term stronger than questionable
could fairly be used, supported by financial con-
cerns half the dupes—half the supporters of a body
of contractors who seemed to have but one object
n view—to extract money from the public regard-
ess of results—has been a main cause of the present
:otal prostration of credit. Never was the' truth of

the proverb that " Honesty is the best policy" more
clearly illustrated than in these disastrous proceed-
ings. The contractors seem, with few exceptions, to
have broken down, the railway system to have
col-
lapsed,
the financial institutions*. to be paralysed,
and all engaged in this bad and disgraceful business
to have met the fate which sooner or later seems
sure to overtake such culpable practices. The
miserable part of the story is the ruin in which it
has involved thousands of honest investors. The
losses have fallen where they are least deserved,
and most felt by Half-Pay officers, country
clergymen, small shopkeepers, and widows form
the mass of those who are caught in the end.
Surprise has sometimes been expressed at this fact,
though the reason is obvious enough. People whose
capital is very small are compelled to seek the in-
vestments which pay the highest interest. With
little knowledge of the dangers, and urged by the
immediate gains, such classes invest and having
no means of knowing the under-tide which
is sure eventually to bring a flood of disaster to the
surface, they remain in a pleasing state of security,
lulled with the satisfactory reports put forth by the
companies in which they are interested. They
awake from their dream only when caught in the full
force of the current, and in too many cases it will
be found that the very men who had recommended
to them the investment had themselves cleared out

25
26
26
27

17
23
25

like rats from a falling house. It is a pity that the
statistics of the ruin wrought by these concerns
cannot accurately be ascertained and laid before
the public, as well as the lists of promoters and the
gains netted by that class. Could the misery
caused for the sake of the comparatively small gains
be laid bare, it is probable that much of the dis-
honesty would have been checked, for even the most
unscrupulous, if anything human remains in his
nature, would recoil from the perpetration of such
wholesale cruelty. When Parliament meets the
causes and results of this frightful panic must be
fully discussed, with the object, if possible, of apply-
ing a legal remedy. But no remedy can have any
ed theirenterprise
A names
im h
ee
ms l
aa tovy
real force that does not bring within the tightest
atl
grip of the law, promoters who issue lying pros.
pn eo cwt stands
teas
n,
negligent d
ad
andsh e
dishonestdirectors
results
management.°
lof w
joint-stock
be summed up in these words—." License to rob."

A Paris telegram through Mr. Reuter's agency
informs us that, in consequence of an understand-
ing between the English and French Governments,
thet e
lExtraditionth
of
fp
ee
December
Treaty of 1813, which expires on
h tuber next, will continue in force
until the beginning of September, 1867.
The Pall-Mall Gazette says that speculation in
public securities is carried on to an enormous extent
in Paris at the present moment. Not only is there
the Bourse proper, but there is also the Petite
Bourse, a sort of Stag's-alley, which may be seen in
full operation on the asphalt° of the Boulevards
after the regular establishment is closed for the day.
From this little Bourse it is a common enough thing
for a passer-by to see a man expelled by a kick, but
it is an unusual if not an unprecedented event to
have 16 defaulters expelled en masse on oti one day,
anda
s
was the case a few days back at the Bourse de Paris,
The affair, as may be supposed, has excited a good
deal of consternation among the stock-jobbing
finaticiering fraternity.

Naval and Military Intelligence.

VALETTA, Nov. 26.—Just a word by the Psyche,
which leaves this morning for Marseilles with Capt.
"..fends, C. 8., Director of the Transport Depart-
ment at the Admiralty, who is returning to Eng-
land. Col. Ross, C. 8., Deputy-Quartermaster-
General, and Capt. Willoughby, R.N., resident
transport officer, who came over in the Psyche, have
been stationed in Egypt, for the purpose of conduct-
ing the service of the transport of troops through
that country. Formerly our troops were conveyed
to and from India byway of the Cape of Good Hope,
under the Indian Government. In future this service
will be performed by the Transport Department at
the Admiralty, the whole of which service has been
organised by Capt. Mends. The troops will be landed
at Alexandria and pass by Benalassal, via Z agazig, by
the sweet-water canal to SuezlThe large steam troop-
ships, especially constructed for the purpose, will
Commence running next September. Two will run
between Portsmouth and Alexandria, and the other
three on the station between Suez and Bom-
bay. The first departure of troops from England will
take place on the 14th of September next year.
Captain Mends received every assistance from the I
Viceroy and his officers in organizing the service
through Egypt. The works of the Suez Canal are
being very actively carried forward by M. de Les-
seps, who at present, however, is not in Egypt. An
averk,:ge depth of 7 to 9 feet has been obtained be-
tween Port Said, along the salt water canal, and
the rest of the distance to Suez is traversed tempo-
rarily by a fresh-water canal of about 7ft deep, con-
nected with the other by means of locks and power-
ful pumps. As far as GO station the full width of
the proposed ship canal has been excavated of GO
metres. From that point to 70 station at Ismaila,
the width is incomplete. All that has been done has
been done well, and reflects the highest credit on
the science, skill, and persevering energy of the
French engineers. The real difficulties of dredging
in a constantly dissolving sand are now commenc-
ing ; but well-informed persons entertain but
little doubt these and all others may be over-
come by time and money. As to what amount of
these important necessaries will be required to
bring the great work to a successful completion it
is scarcely possible at ;the present state to hazard a
conjecture. Her Majesty's ship Megssra will leave
Malta on Thursday next for England, with naval
and military invalids and time-expired men. The
French Government steamer La Corse left on the
24th inst. for the eastward. The following Govern-
ment notice was issued on the 23d of Nov. :—" In
consequence of official information received, the
officer administering the Government, having heard
the opinion of the Board of Health, has been pleased
to direct that arrivals from Leghorn and Genoa be
admitted to pratique, and that the quarantine on
arrivals from other ports on the continent of Italy
be reduced to five full days."
The greatest expedition is now being used at
Chatham dockyard in hastening foward the con-
struction of the ironclad ships now building at that
establishment. In accordance with a telegram re-
ceived from the department of the Controller of the
Navy, 70 additional shipwrights and other me-
chanics will be placed on the Turret ship Monarch
this morning, in order to expedite the building of
that vessel. The extra hands to be employed on the
Monarch will be taken off the wooden unarmed
Blanche partially completed.
The armour-plated screw steamship Lord Clyde,
24, Capt. Roderick Dew, C. 8., flag of Admiral
C. 8., was removed on Friday from her moorings in
Hamoaze to No. 2 dock at Devonport, to receive a
screw with two fans only.
-The screw steamship Ocean, 24, Capt. C. S. S.
&anhope, was removed on Saturday from Hamoaze
into Plymouth Sound, and will shortly sail for the
Mediterranean.

The paddlewheel steam storeship Dee, 1, Master
Commander George Raymond, having received
some slight repairs at Keyham, was removed on
Saturday to the dockyard at D,r;onport, where she
will to-day ship stores for Woolwich.
Rear-Admiral the Ifou. George F. Hastings, C. 8.,
hoisted his flag on Saturday ou board the armour-
plated screw steamship Zealous, 20, Capt. Richard
Dawkins, and saluted the flag of Port-Admiral Sir
William F. Martin, K.C.8., which was duly ac-
knowledged by the Royal Adelaide.
The foremast of the armour-plated screw steam-
ship Achilles, 2G, Capt. Edward Vansittart, was re-
moved on Friday last, after which she was placed
at moorings iu Hamoaze, Devouport.
The screw steam gunboat Sepoy (tender to the
Dauntless (left Plymouth on Friday with stores for
Hull.

The Rinaldo, 7, screw sloop, 200-horse power,
Commander Buil), sailed from Spithead at 11 a.m.
yesterday, for China, by the Needles Channel.
A detachment of the Royal Marine Light Infantry
will leave head-quarters, Chatham, this morning,
for service on board the paddlewheel steamer Virago,
6, 220-horse power, which is being rapidly brought
forward for special service is Ireland.

An order has been received at Chatham garrison
directing Capt. Edward Coghlan and Capt. Evan
Bruce Gardyne, 106th Bombay Light infantry Re-
giment, and Ensign William Andrews Dixon, 82d
Regiment, to embark for India to join the service
Capt. companies of their respective corps. Edward
W. Kent and a draught of the 2d battalion of the
21ch Regiment have arrived from Burrnah at
Gravesend, and disembarked from the ship Black-
wall, who brought them home.
Staff-Commander Moriarty, C. 8., was on Satur-
day last presented by his brother-officer with a very
handsome and valuable service of plate, in recogni-
tion of his eminent and successful exertions in laying
the Atlantic Cable. The presentation took place
at Capt. Moriarty's
.residence at Woolwich, where
the committee assembled, consisting of Com-
manders Biddlecombe, Noddall, and Hodges, Mas-
ters-Attendant at Woolwich, Deptford, aud
Sheer-
ness ; Staff-Commanders Evans, Penn, Burdwood,
Batt, Marsh, Sulivan ; and Second-Master Smith.
Captain Biddlecombe, in an appropriate address,
warmly expressed the pleasure he felt in being
selected for the duty of making the presenta-
tion to his old schoolfellow Moriarty, as well as the
gratification he had in requesting him, on the part
of so many of his personal friends of the Royal Navy,
to accept the testimonial as a mark of their esteem
and appreciation of the services rendered by him in
the great national undertaking of laying the Atlan-
tic Telegraphic Cable, buoying up the severed line
of 1865 from the Albany, and then placing the Great
Eastern, commanded by Sir J. Anderson, over the
end of the cable, which led to its recovery. Captain
Moriarty expressed the gratification and Fide he
felt in being thus assured of the good wishes of his
brother officers, the staff commanders, masters, and
second masters now around him. He placed, he said,
a high value on the testimonial received from the
hands of Capt. Biddlecombe on their behalf, repre-
senting, as it did, the feelings of his own class, who
could so well appreciate the amount and importance
of what he had been selected to perform, but which,
he modestly asserted, had been over-estimated by
his friends. He regretted, he said, the absence of Sir
d. Canning, occasioned as it was by illness, espe-
cially as being the head of the whole engineer staff
he was always ready and desirous of co-operating
with the nautical men engaged in this grand and
successful undertaking.
The following appointments were made on Fri-
day at the Admiraltyvice
. Commander W. B. Grant,
to the Research,Scott, promoted ; Commander
Bingham to the Yingo, commissioned ; Lieut. F. 111
Keyser and Lieut. Alexander Tupman to the Virago;
Alfred S. Bradley, master, to the Perseus ; Henry
Hoskin, master,
additi°lllalie'rbert
thpe Fisgard, for ser-
vice in the Chanticleer ;
alker, master,
to the Virago ; Sub.-Lieut. Rober.t\BV Pipon,
Charles Sub-
.
Lieut. Sidney G. Smith, and Sub.-Lieut.
Whitelock to the Virago ; Francis
Alex
Taber and I
Sydney A. Holt, midshipmen, to the Virago .
D. M'Arthur, paymaster, to the Virago ; R.IB. H.
Buckner, master's assistant, to the Formidable, as
supernumerary : Henry J. Mills, master's assistant,
to the Virago ; and Henry J. Davies, clerk, to the
Virago ; and the following on Saturday :—Henry
B. Akaster, master, to the Indus, additional, for the
Malabar ; John Elliot, staff surgeon, to the Nar-
cissus ; Joseph Jeans, master's assistant, to the
Victory, as supernumerary ; and James Donne, en-
glum', to the Gladiator,