The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-01-04
Progress or the Revulsion.

On Tuesday last the holders Of Illinois
bonds were told by the State agent here that
no money was forthcoming topay their interest
due on the LIST January. 1t is alleged that the
State had RENTED the money to Messrs Wads-
worth IL Sheldon, but that the funds had
been employed in the general crash Of that
house. It il difficult to ascertain how this may
be; Illinois has certainly been flush of late; but
until payments are resumed, the presumption
of insolvency is sure to rest upon the real
debtor-the State-and not upon the mere
financial agent employed here. When Illinois
takes measures to redeem her credit, and satisfy
the claims of those who have given their money
for her paper, it will be time enough to release
her from responsibility for the suspension Of
Tuesday. Her past financial history forbids
any indulgence being shown to her on this &C.
casiOn.
1t is not to be disguised that this untoward
event will 60 long way towards shaking the
entire fabric of State credits. The past few
months have witnessed series of disasters
affecting most gravely corporate and individual
credit, and tending to take away from moneyed
institutions and merchants the means on which
they have traded for the last year or two.
Stocks of various kinds have ceased to exist
altogether, railroad shares have fallen to the
verge of bankruptcy, Individual paper has
ceased to be negotiable, bank notes have de-
preciated; it is not unnatural that the public
should look with uneasiness to the remaining
class of securities-State bonds-and should
take alarm at the first symptom Of danger
in that quarter. Indiana and Missouri stocks
have already experienced the decline incident
to pressure of large lots Of paper for imme-
date sale. Virginia is understood to have suf-
fered severely in consequence of the suspension
of Selden, Withers & Co., their financial agents
at Washington. And now, Illinois fails to pay
her interest in New York. Taking into ac-
count the antecedents of one or two of these
States, these facts contain very substantial
ground for apprehension.
There are people who still adhere to the fall
lacy-put forth a few weeks ago--to the effect
that I" the crisis" had past, and that the coun-
try was in fair way of recovery. Prominent
among these we find o class of mercantile men
whose chief business is the investing Of foreign
money in American securities, and who, having
bought for their customers large quantities Of
stock, now heavily deprecated, are zealously
attempting to restore buoyant tone to the
market, SO as to enable their friends to sell out.
Many of these have involved themselves and
their credit SO deeply, that nothing short OF
revival of confidence can save them. This mo-
tive may account tor some of the singular
misapprehensions which pervade the financial
circulars at present issued from New York. Ia
their annual circular, dated December 80,
the house Of De Coppet devote much space
to drawing distinctions between the revulsion
of 1887 and the present one, and endeay0r to
show that the existing embarrassment is
q trjding one, and will soon be over.
Their main argument is that the bank loans
and discounts have not exorbtantly increased
of late years. and that )nsequently there has
been no such expansion as calls for any serious
and prolonged contraction. To show this Messrs.
De Coppet compare the figures, which are as
follows
Bank loans and discounts in 1857 .S525 u.s. 702
Do. do. 1904 ........ 1907 2S1 32S
1t would have been fairer to have given the
figures for few other years, SO as to illustrate
the expansion, as follows:-
BANK LOANS AND Discounts IN Round NuxBRRs.
1880. 500 900, 900
oZtovo,ooo
1887 osoVoo ooo