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

realized The payments were more promptly met
than expected. The banks looked out for them
selves before the business community had become
weakened by sacrifices to sustain their credit. The
Sub Treasury was rapidly depleted and the surplus
revenue of the government experienced rapid
reduction. The suspension of specie payments on
the part OF the Philadelphia and Baltimore banks on
the 10Th OF September first impressed the public
mind with the fact that a financial revulson was
about being realized, and panic seized upon all
classes. II was at first hoped that the bank
suspensions would not extend beyond those
cities. The managers of the New York and New
England banks assured the public that they were
able to maintain themselves specie paying insttu
tions. The hope of this sustained in measure pub
lie confidence and relief was looked for daily Heavy
failures among the mercantile and manufacturing
classes continued, and the amount OF liabilities In
volved was enormous. The money market never was
before known to be stringent. 1t was utterly i'm
possible to get money, upon any class OF security.
The supply ceased at once, while the demand never
was more active. Most fabulous rates Of interest
were offered.
The month of October opened in the midst of a
financial panic of the most intense character With
in our whole history a nation, nothing equal to 1t
had ever before been realized The failure OF seve-
raj Of our largest private banking houses was an
nounced early in the month. Several railroad COM
panies went to protest on their floating debts, and
made assignments. The Cumberland Coal Company
suspended and assigned; several banks in the city
and its immediate vicinity failed and went into the
hands of receivers and on the l4th of the month
after serious run upon them for specie from their
depositors the banks of the city Of New York sus-
pended specie payments. At that time the contrac-
ton in loans had reduced the aggregate below one
hundred millions of dollars and at the date of sus
pension the specie reserve ranged below seven mil
lions of dollars. At meeting of the
bank officers at the Clearing House, on
the evening of the 18th of October, it
resolved to suspend specie payments, and it was
also resolved to receive deposit the same as their
own bills those of all the country banks of the State
of New York This measure was hailed with much
satisfaction, and the impression prevailed in the
public mind that the worst over-that the back
bone of the panic and revulsion had been broken,
and that a steady improvement would be realized
from that date. II is very extraordinary fact that
most of the largest failures occurred previous to the
suspension of the banks, although there no
change made az the time in the movements of these
institutions. The savings banks at that time sus
of claiming the sixty days grace before paying de-
posters The Secretary of the Treasury gave no
tice about the middle of October that no more gov
eminent stocks would be redeemed upon any terms
His surplus had become reduced below the point
required by law, and suspension was the result. |
About that time the advices from Europe began to |
be bad and fcreshadow financial revusion in Great |
Britain and on The Continent. The arrival in Loa-
IL. v.11%n
suspension of rcmittaDees in every shape, were
calculated TO create difficulties, and il was
not long before they were fully developed. The
moment emittances from the United States
stoned, the entire financial machinery OF
Europe became derange1. 1t only required
some cause to send the whole fabric topplng to the
ground. The entire credit system had become so
expanded. and the bubble had become so enormously
inflated that tring event was sure to produce the
explosion. That event developed itself when remit
tances from this country TO Europe suddenly and I'M
eyrocedly ceased and the result is before the world
While this suspension relieved u.s. il bankrupted,
rather exposed the bankruptcy of hundreds of bank
ing and commercial firms the other side, and
their prostraton and depression will lnger long after
our recovery has been established. From the date
Of the suspension of specie payments by the hanks
OF this city, the stock market pretty steadily i'm
proved. In money matters there was no important
change, for the policy of our banks remained the
same and the contraction continued. The first week
after the suspension the specie reserve of the banks
increased about two and half million Of dollars.
The month Of November inaugurated period OF
quiet and inactivity among business men generally.
Throughout there was very steady bank movement.
In no week was there variation Of more than half
million in the line Of discounts, and at the close the
contraction for the month did not exceed one million
Of dollars. From the date of the bank suspension
the specie reserve rapidly and regularly increased.
In 20 the close of November the increase amounted
10 about sixteen millions Of dollars, having risen from
a. $50 to s24 1903 las. With this ease in the
money market was realized among business men.
Loans were freely offered call at low rates Of in
tercst and spectators in stocks for rise found no
difficulty in hypothecating railroad securities with
favorable margins. II continued as difficult TO
raise money on commercial paper as at any time
during the revulsion. and business matters were
depressed beyond all hope Of speedy recovery. The
importation and expectation of specie going on at
this port a; the same time was sufficient TO show
the complete arrangement Of all financial and COM
mercial laws. After time the importations nearly
ceased when the expectation increased and the
current set almost wholly one way. During the
month there was quite an active movement in the
stock market, but il was confined TO the regu-
lar spectators of the street, and could not he
forced beyond. The banks, anxious TO find employ
ment for their accommodating funds loaned freely
stock securities a, FIVE and six per cent interest and
were glad to get that. Outside Of Wall street the
money stringency continued in full force. No i'm.
Il ,at ,,,
the early part Of December. The money market
remained the same. The brokers in stock could
get all the money they wanted on the right kind Of
security The banks for the first time since the sus-
pension expanded their line Of discounts
the Grst week in the month. At that time
the specie reserve had reached the immense sum