The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-31

European productions of free trade they have been
very seriously affected by the amendment of the
up, contributing to bring about the panic and in.
Although the States are to great degree depen
dent upon Europe for capital their merchants have
engaged largely in export foreign trade with all
parts of the world, and notably with the whole of
South America, China, India and Australia; and
these operations instead Of contributing to the
wealth Of the States, have been drain on their re-
sources. In many cases their merchants cannot
supply suitable goods for outward cargoes and can
not take return produce. American notions 20 but
q small way in making up shipment. and guano is
but in small demand in the States The American
operations are generally large, and the American
houses fail one after another few having real capital
or being of stable character, and therefore i'll able
to compete with the merchants Of England, Ham
burg, or even of France SO far as the import of
sugar and coffee goes there is legitimate basis for
transactions; but American enterprise has been ON
niyerous and heavy have been the losses. Although
some of these fall upon foreign capitalists portion
of the absorption of resources IL felt at home. The
Americans occupy very marked position in many
of the markets. from their enterprise and dashing
speculations but their real resources in the in
telligence and energy of their shipnAsters and in
the ability of the engineers adventures and schem
ers who now to be found IN every corner OF the
earth.
AMERICAN PANICs-
From all these various causes it will be seen that
there have been enough in operation to affect the
whole body of banking institutions. True enough,
the resources of the country have been wonderfully
developed and are making undoubted progress; and
this very year the crops Of grain cotton and tobacco
have been abundant: it is true, likewise that great
part of the capital engaged in financial and CONNER
cal transactions is European; but the banking inst
tutons Of the country have become affected by ad-
vances on deprecated securities, and having been
unable to stem the panic which set in left the whole
fabric of speculation to toter to its fall themselves
being involved in the general crash.
The banks have had the great hand in feeding
railway enterprise, in supplying manufacturing ope-
rations and in accommodating trade speculations;
and when the crisis has come, the resources on
which they depended are unavailing; for railway
bonds are deprecated, mortgages are worthless,
manufacturers ruined and merchants insolvent, and
the note circulation has been embarrassed by the
discredit of the banking operations
The panic has been attributed to the warfare of
bear party and a bear press, and the material pro-
gress of the countryis appealed to as an evidence
that the panic was groundless and even fictitious
Bear operations there are always in every market
and the mercantile community of the Atlantic cities
being essentially speculative, far beyond the stand
ard even of Liverpool Glasgow. great bearing ope
rations always going on in stock and in produces
and so are operations for the rise; but the fall in
railway bonds and shares, and similar securities,
was dependent the fact that line after line had
been found rotten in its management untrustvorthy
in its Statements and destitute of the assumed traf
fc and all other enterprises being eagerly and at
tentively canvassed, many others were found in the
same situation, and delusion could no longer be
maintained
The fall in railway and the like stocks crippled the
resources of the speculative mercantile community
and the banks; loans were drawn in, and the manu-
featuring community, in reality living on borrowed
capital, and having no security but highly priced
works and over priced stock, was in jeopardy the
moment advances were restricted, while the banks
became more jealous and more wary at each stage,
but too late to themselves though quite in time
to aggravate disaster
As the resources of the mercantile community
were trenched upon, mortgages were called in, land
lots found worthless and high rents being no longer
maintainable in an impoverished community great
depreciation took place in real estate. With the
thousands now out of employment, and the general
pressure the trading classes, rents in New York,
Philadelphia and Boston will largely recede, and out
side lots remain unoccuped for time. Thus the
various securities of banks note brokers' merchants
and storekeepers have by the reaction Of the ggan
tic system Of speculation which pervades the coun-
try been reduced to nohngness and large concerns,
with an improving business and accommodating capt.
tai brought TO insolvency.
When the banks began to get into difficulties and
TO curtail their discounts the mercantile classes
were alarmed so the lower classes OF mechanics aud
agriculturists, chiefly ignorant foreigners. were
seized with alarm. and not onysssayed to withdraw
their deposits in bullion but forced in their notes to
be cashed. On all sides the resources OF the banks
were assailed and general suspension, alike Of sol
vent and insolvent banks, became measure of pru-
dence and necessity.
PANIC IN ENGLAND.
We are now enabled to see the links Of connection
by which this panic brought TO bear in Europe,
and It's reaction on the United States. The view
affords us a very disagreeable proof of the intimate
relation between the Old World and the New and Of
the influence Of the latter on our own interests and
condition. We have been so accustomed to the old
idea of Europe influencing America that we have
hardly been prepared for the counter effect although
we should readily accept a westward transit OF
power the spread OF pestilence thitherward. The
n 81 fnt.
mercantile houses in London, and was regarded As
only partial and isolated operation OF little sgnif-
canoe The present panic has, however been of far
more serious extent-surpassng 1887 and lSt7, and
equalling In the terror II has spread and perhaps In
IL appalling effects the great panic Of lS25-'26
The present so-named American panic Is one Of
those events in our commercial history important
in its bearings az the supply Of new gold, and az
various and enduring in its influence and effects in
a general way, we are prepared to admit Inc commu.
nifty Of interest Of oil nations; but we are yet
sluggish in approaching the immediate and decisive
influence which any one nation now exerts on the
destinies of the Others. The change OF cirCum-
stances has indeed been sudden and swift and the
constant developement OF the operating causes sur.
passes our conceptions and our power OF following
and registering the events and their consequences.
We have not merely TO allow for the influence of
railways steam navigation and the telegraph In uni
ting us with the rest OF Europe but for the combined
machinery which brings us in contact with new born
and swiftly growing communities in the West. The
year after year, hour after hour in each month,
competition effects some improvement, y but one
example Of the mode in which our union with Anne
RIGA n being made closer; for the wonderful march
Of enterprise among brethren brings the distant
and but lately unpcoped and unproductive regions
into rapid contact with To say that Quebec is
within twenty-fo hour reach Of New lork-cities
once separated by the long marches Of armies. by
the space of a campaign-is startling fact. but
nevertheless a small one; for Chicago and the cities
Of the lakes reached as quickly railway transit
can effect intercourse and railways go forcing
communication with Michigan and the infant com.
monwealths Of the far West.
To these regions-remote we no longer dare call
them-priccs and commercial intelligence are con-
vtyed by telegraph, and thereon seagoing shipping
Is reghted with produce for the markets Of Europe
In little more than a week the Mark lane prices
reach Chicago. more swiftly than, not long since,
they reached Dantzic or Odessa; and, in little more
time, eargces 90 arrive may be sold Ia the London
market There is an intimacy Of relation established
by the intercourse Of trade; but we should deceive
orsolvpz IL considered this under limit