Weekly national intelligencer., 1857-10-10
A LONDON VIEW OF THE FINANCIAL REvULsIoN
IN THE UNITED STATES.



The map of the United States in anv English Atlas
twenty ten years old is about as much out of
date the Biographies which occupied half the middle
of Europe with :" Poonia, which described somewhat
less the Kingdom of Moscovie, and gave TO a
few broken outlines of coast in the Indian Ocean the sim
gle name of "New Holland" Regions that in our
school map of the States trayersed by the Otto
ways the Ojibbeways the Sioux or the Mohawks or
generally the red Indians" hickly fretted
with railways Lancashire the suburbs of London
The wonder is first how the railways made; then
how they can pay But we are told look to the vast
cities that have sprung up in the wilderness and to the
lakes and the canals. Then certainly the railways must
help another; yet cannot help noticing how
often route has three competitors 1t is true
that here may go to Birmingham, to Noting
ham, to York by different routes but this is thcky
peopled country, containing good many people who
travel for pleasure in and out of season,
in bad times well in good Then it is comfort to
those who have invested their savings in Michigan or
Illinois railway hear that has been done cheaply
and rudely that Englishman in this country would
trust his limbs to its light rails and timber bridges Yet
considering the mileage, something enormous and the
fact that the population of the States after ALL is so
great that of the British Isles and not nearly so
wealthy the most ssngune believer in improvement and
progress must have his misgvngs paying QUA
| htes of these long thin lines.
But how were they made 1t was State bonds and
Canal shares that Sidney Smith invested with such
halo of nooriey The States borrowed and then repu-
dated. This but elementary stage of American
progress and the British public has long since attered
itself that is awake to the dangers of simple repuda
ton. How is it done, then in these days Our CORE
spondence from New York throws some licbtu6iunr
fculty That gay and lively city sa69 now W
exctements panic, which correspondent ms to
various gregarous terrors and mishaps such isons
rushing over precipice and sheep running through
hedge gap But it is evident that panic in New York
has its redeemng features for there are people there
whe thrive on panic, and get one up. 1t is
evident too that panic is well compared to rush for
it has direction and that direction is as gainful to one
side as is ruinous to another Ii represents run of
money, leaving void at quarter Of the compass and
giving to another rather more than its DUE panic is
not merely species Of commercial pathology it is an
act of intention, strength and Skill with authors mo-
ves victims, and all the that constitutes action
Let us see then how panic at New York operates upon
American railways and their British share
holders.
Let suppose the British capitalist generally
man who has earned his money slowly, and his expe-
rlence still more slowly alive to few of the perls that
environ American speculation Let him be fairly up to
pretended State guarantee informal State qua
rantee with flaw in it, to the danger of rival lines and
of lines made simply to assist in the making of lines
which will ruin them when made; to the dangers of ma
nagement of amalgamaton of leases and sales which
may may not leave the general shareholder in an un
pleasant position. Let the Engshman either devote the
autumn of his days and the fickering light of his de-
enng income to gaining an insight into these curosi
ties of American enterprise let him have the sense to
consult broker who can point out these dangerous
places on that smooth seductive surface Still there
mains one peril which hitherto has not been so fully
illustrated and which many Of readers must now be
learning to their cost Railways in the United States
and few other undertakings appear to have unmit-
ed power OF borrowing in market of which the ups and
downs wholly beyond all English ideas All the great
lines have been borrowing in the New York market on
their acceptances and have done so easily as they
have generally been willing pay the highest rates of
0Vnc dnnn
to their COST but the highest rate of interest here
is not nearly high there and we have not seen
great company going about from house to house begging
for an Immediate loan to pay the interest due its
bonds, and Lombard street crowded with speculators
whose lives depended on the result
On the first day of this month Wall street. New York
was in state of delightful excitement The Septem
Der coupons the Erie second and third mortgage
bonds matured, and the company were without means
to meet them unless the banks would advance $500 OO0
1t not till midday that the banks agreed to do it,
Hadthey declined it appears the little confidence left at
New York would have gone altogether and it is evident
that humanity and patriotism allowed sway the
decision But for this appeal and but for tender
elements In the philosophy of Wall street, what would
have become of the Erie shareholders when the second
and third mortgages would have 90 without their in
terest? The result was the "second and third mort
cages got their September coupons. But how about
the shareholders? Those of readers who NAV hap
pen to have embarked their all in this company will be
interested to hear that has been its wits end to paw
hundred thousand pounds and that it has to borrow
49,
paper could not be done below twelve fifteen per
cent, and by far the largest business two per
cent month" But these panics are periodical and
at no such great intervals There is not railway in
the States that has not to go through few of them
when railway can borrow much it pleases its
own accepances and when the of interest oaps
is at the usurious rate stated above results that the
inevitable operation of United States railway to draw
the money outof the pockets of the shareholders into
that of the Wall street money lenders No railway GER
ainy not any American railway can ever Weld profit
fhpi into
the proht must disappear. In fact the best on
this sort of transaction the value of the shares in the
market What is share worth when it becomes merely
an authority to adozen gentlemen contract any
debts they please at rate of interest thew NAV find
necessary Railway stock which was supposed to have
fallen quite low enough had gone down ten or twenty
down.
The truth is American railways have been burning at
both ends, both their income and their outpoinps
The crops have not been quite good travelling there
fore not quite brisk while railways have had to bor
row money against host of needy competitors There
is crowd OF spectators in sugar. in cotton and in
there are States with debts rather above their present
means, and wanting money still and there are
banking companies with names that would not bring.
them much credit in this country but which hitherto
have won American confidence At the beginning of the
month there crash of them and as one reads the
list one seems to be reading page of some commercial
romance and not matter-of-fact report What would
simple they are have expected from the
: New York Life and Trust Company ?" What prudence
or even honesty was likely to be found projectors ca
pable of such tumble of words Yet this com pany had
hrven at Cincinnati till in evil hour it winged it's
light to New York, and became machine for drawing
ne money Oh the western agrculturist into the coer
If the Wall street money-ender. Then the Mechanics,
Banking Association gave way the storm follow ed nv
dozen private houses Several of the railwsss were
holding meetings to look their difficulties in tho faco
Meanwhile it is evidently the game of NJ merons and
powerful body to keep the panic by mems which mel;
her the taste nor the law of this country would allow
The journals make pleasant remarks On the weakness
! a or fha \
'ils, and the sweetness" of the slot The uutl(
arefuly informed of the difference between cyHpanv
leposltes and discounts; AID when few of the more
distinguished have been duly stigmatized it is added
hat the list is very far from complete No doubt We
AVE had as bad state of things in this country The
regularity OF the New York panic is that it is indus