The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-06-18
THE MONEY PANIC.


HtstOry OF the Fontss OF the lent0ry.
The following account Of the several pan thai has .
occurred within the present century, Including that just
Witnessed Is from circular u hesrs Traycrs of Lon
dom
The number OF well defined and purely monetary
panics that have been Witnessed In the present century
has BEEN including that Of the past week, Ave In
the cary part Of the century there numerous
othersndced they then ~ rapid occurrence, but
these up 10 isis were all connected with the arlng
fortunes OF war II In 1873 that the FIRST purely
speculative panic took place. In the preceding year
consos had steadily advanced from A7s 10 gsss, and
this upward movement had been accompanied by IA.
for the establishment OF joint stock companies Of all
descriptions Mines In Mexico and other parts Of south
iis height there scarcely conceivable branch of
occupation, from pearl fishery In the Pacific down
TO the washing Of linen and an equitable system Of
pawnbrokng AZ home that was not organized in pro.
tpcctus or that failed 10 command premium Bank
directors were IN the vortex, and n some Of the most
indcrous concerns the names n leading merchants hg
ured The proposed capital Of each company was how
ever, In those days much modest than nov, the
usual range being from $50 600 600 instead Of
from halt miHlon 10 nvc millions with power OF 10
crease ~ ~ present Al length rapid drain of bull
lion set IN the funds precPisiey Went down. and con
upon the banks took place and Lombard street and Bar
thoomew lane presented scene not unlike that OF hi
government aid 80 great that wss rcsoived to
authorize an advance not exceed ng hreo millions ser
cares Commissioner were appointed 70 carry on, ,hs
arrangements IN the principal commercial towns and
naenoe wa g. "nos' ,os.,. Ins & sp
had been expected aud In many places tho eomms
. Ind almost sinccure.
Tho panic occurred In 1881, but this was Of
restricted character and attended with any
violent fluctuations Ia tho funds 10 the OF dis
count II from eagemcss make loans 10 the
various states of the American Union aud from system
OF open credits TO tho merchants of New York New
Orleans, &c The chief London houses By whom these
credits had been granted were IN the lrst dan ger
sisted 70 extraordinary extent by the Bank Of Eng
land. bnt II ultimately found impossible 10 pre-.
The preceding had been marked by the ntroduc-
ton q ralisay projects 70 the amouD, g about
600 600 600 and by the elevation OF Mr. Hudson .
chief promoter. Consols the lat OF January had
stood within fraction of -, and 10 October they
were down 10 'sk. The drain of god wps extremely
having been reduced 10 IL i7o,TSo, tho govern.
mont, representation from the principal dls.
count houses, authorized the suspension of The
Charter art which had then been three years In
operation. The minimum rate st which advances
" he made that occasion fired per cent The
resolve 10 make advances on goods IN 1870. In t~s
months coD-ois recovers from TsI 20 s5 aud within
months the rate of discount down 10 3k pef
cent In the following year vent 10 az, and a then
remained With little variation ranging between and
per eent for nearly tbrcs years in the pan Of 1857
on the part Of exporting merchants chiefly Supported
~ reckless credits from banks Liverpool Gisgow aud
essvhcre the suspension of the act took place The
9th " Hovembes and the minimum rate for sdysre.s
vas nnsd ss 10 per cent, beng per higher than
the previous occasion Consois VII eh bad previously
s,c,d :. esH wen. during the panic 70 ss, ssd Me
bank reserve vss dows q fss7 fio; but ths ls
osme sssasces Ne rsssvery rapid and contnaoas
u the neu yess eonsots aood 81 Sst and The rate ~
discount had fallen V ~ per esnt sss which for wo
yesrs rsnssd besws~s ~ sod 70 ths rsospt panic
Ne stisf fsaiafs Aas - Ne ksh nssaa vh;sA ear