The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-08-25


EFFECT oF OPERATING N RAILROAD Bosps-The
Ohio Life and Trust Company has Just been
stranded on that rock on which 80 many banking
and commercial institutions all through the
country are being ruinous'y wrecked-namely,
operating in railroad bonds and stocks The all
nouncement caused great sensation in Wall
street yesterday, and of course it is not to be ey-
pected that the effect Of this failure will stop
there. Other companies and firms having large
business transactions with il viii be drawn into
the vortex, and announcements of other failures
may be daily looked for. We refer to our finan-
cal columns for further particulars on this head.
The Ohio Life and Trust Company is an old in
fdence. It's capita stock was $4,000 900. 1t is
not many days since it paid Eemi-annual divi-
dend Of Eve per cent. Its shares of stock were
quoted in Wall street within the present month
at l02, and transactions in II were done within
the last week at from rs TO aj Now all is gone,
and nothing is left to the unfortunate deposi,ors
and shareholders than TO bewail their Ill fortune
in having anything to do with the concern. A
hard and bitter lesson for many poor families
whose all was invested in 4.
The company had is principal place of bu.i-
ness in Cincinnati, and had also branch house
in Wall street Its legitimate business was to
issue bills Of exchange between the Western
States and New York, to advance money at in
terest TO commercial houses On good security, and
TO receive deposits on trust A large proportion
OF it capital was supplied by these deposits IL
was no. bank Of issue. If IL had confined its
operations 10 this course of business IL might
have gone on safely and swimmingly, and those
who deposited their money in the concern would
have had no cause to regret doing 20. But like
too many other banking houses and individuals,
il was not content with its fair and certain
profits, but must needs invest in railroad bonds
1t made large advances TO Western railroad COM
panics on the hypothecation Of their bonds. To
one railroad company In Ohio Il had advanced in
this way some I've or Fix hundred thousand dol.
lars, and TO another two hundred thousand dol.
lars, The security being almost worthless, the
result that might have been expected ensued-
the company broke down under IL heavy labili-
ties, ard Is low aHreck
The lose will fall, a. usual, on innocent parties
II viii fall on the stockholders on the depositors
and on merchants here and in the West who may
have drawn bills OF exchange within the last week
in favor Of their correspondents. There was an
immcnsc amount of business done in this latter
shape and therefore the transactions Of even two
or three days would figure up very large
amount
The moral Of this Lesson is that which We have
been preaching TO cur readers day after day
have nothing whatever 10 do with railroad sccu
ritos When they ruin a company with an
almost unlimited command OF capital, and pos.
-ssipg the very best means Of Judging of their
worth what chance have small capitalists to c..
cape II is well known that most of our Wall
street hanks have gone largely into the same
losing business, and tina. however they may pro-
crastinatc the evil day, il viii come at last And
when it comes there will he the same story Of
depositors wrecked and ruined in fortune. We
have done our duty in sounding the note Of warn-
ing. Those who heed it not have but themselves
TO blame.