Eaton weekly Democrat. [volume] (Eaton, Ohio) 1866-1875, 1873-10-02
THE FINANCIAL PANIC.


The Failure of JAY Cooke g. Co.-Other
Suspensions Follow In Rapid Success |
sion-The Excitement at New York, |
Philadelphia, and Other Points.
NEW YORK, Sept. 18.-Another day of in |
tense excitement has passed over Wall street.
Early this morning predictions were made that
this would be hard day, and enc that would
see the downfall of more than one financial
house. The Chicago fire, it was thought,
would occasion a drain upon deposits and tend
to panic. Stocks for the first two or three
hours fuctuated wonderfully. Western Union
fell 10 per cent. without upward struggle,
but about noon recovered its opening figure.
At noon the report was whispered that the
house of Jay Cooke & Co. had suspended. At
first the rumor was considered All idle one, or
at most started by some scheming faction.
However, it had great effect. Men and boys
ran races from office to Office. The telegraph
was incessant in it's operations, and the ex-
it was officially announced that the suspension
had occurred, the reasons therefor being
advances made to their Philadelphia
house. which rendered them unable to
meet the demand made upon them by their de-
positors here. As soon as it became generally
known that Jay Cooke & Co. had suspended,
many rumors touching other prominent houses
sprang into existence, but all reports about the
suspension of firms excepting Jay Cooke 81
Co. Richard Schell, and the small firm of Rob
inson & Co. upon investigation proved to be
without foundation When TINS fact was MADE
known on the streets, confidence was again
restored, and at the close of business stronger
feeling prevailed.
The liabilities of Jay Cooke & Co. cannot be
ascertained. 1t will take some time to make a
statement of the affairs Of the house. The
creditors are mostly banks and bankers, there
being but few individual depositors in the list
The suspension will greatly interfere with the
Of ha probably
pend the negotiation of per cents.
The Tribune says q" Late this evening the
folio owing reasons we're given by Mr.. Fahne-
the failure of this house. For several weeks the
uneasy feeling which prevailed In connection
with the new railroad scheme caused heavy
drains upon the deposits both of their Phila-
delphia and New York houses. The deposits
in both cities suffered continual dlmlnut1on,
until at the beginning of the present month,
their deposits were lower tn. f9an , ar any EIe The
drain upon the deposits, already SO heavy, was
still further increased by the recent suspen-
sions and demand for money was lncessant,
and is felt still more severely in Philadelphia.
Tho Philadelphia house was compelled to call
upon the New York house for aid, and large
amount of assistance was rendered. line
Philadelphia house was under large advances
to the Northern Pacific Railroad Company, in
volving large sums of money, preventing them
from maintaining the reserve ordinarily kept,
and they were therefore unable to respond to
the demands of their creditors. In this sea-
son they were unable to return to the New
York house advances made by the latter, or to
supply them with any collaterals available IN
New York at the present time. Owing to thls
the cash balances became exhausted, and sus-
pension became inevitable. Fahnestock said
| that of course the different members of the
| firm were possessed of a large amount OF prl-
! vate and personal property, but none OF TINS
| was available in an emergency such as the
| present He was not at the present time, nor
was any member of the irm prepared to tell
/ ~, As4y<N nfu Of ft,n
| firm. He believed that all the creditors would
| be paid in full, and hoped that the suspension
would only be temporary. On this point
nothing could positively be said at present,
| and some time raust necessarily elapse before
| the exact amount of private property of the
] firm can be decided"
| PHILADELPHIA, Pa, Sept. 1s.-Third street
was thrown into an uproar at II o'clock this
morning by the report thst the old banking
house of Jay Cooke d Co. had suspended.
| The rumor caused the most intense excite
ment amid all circles, and the intelligence e flew
| Persons interested, as well as those not inter
ested, turned their steps toward the office on
| Third street to see for themselves the condl-
| ton of affairs. Very soon a constant stream
| of people we're seen debouchiDg from all the
| adjoining streets into Third, until that street
was filed with people, all intently and excited
ly looking at the building. The doors were
| closed and guarded by officers, and all except
| those having business with the firm were pro-
vented from entering.
Mr. Cooke authorized the posting of a notice
on the doors. The crowd then rushed toward
| the spot all being derious of seeing and read
ing themselves what was upon it. This was
impossible, and a voice from the crowd CRIED
out, "Read it aloud" The demand for this in
fifty M 5he read qneSd
to be heard in the middle Of the street, the
following:
NTo THE PUBLIC: We regret to be obliged
to announce that, owing to unexpected de
mands upon us, our Office has been obliged tt
suspend payment. In a few days we will bt
able to present q statement of our affairs t.
our creditors. Until that time, we must asl
for their patient consideration. We believ'
our assets to be largely in excess of our Il liza
bilities. JAY COOKE d Co."
This statement settled the existing doub
which still fingered in the minds of many o
the crowd, who, Notwithstanding tn
evidence which the closed doors of a banking
house exhibits, still hoped against hope til
almost the very signature of tho firm was read
The expressions upon every side were thos'
of commiseration and of sympathy for firm
that has always so highly maintained its cred
| it, and which will raise up from this temporar.
prostration stronger than ever.
Many reporters tried to gain admittance
| and but few were fortunate. The reporter o
the Eueraing Telegraph was the first to enter
and followed shortly afterward. The bank
ing room was darkened the clerks were scat
tered through the building, some in groups
chatting about the disaster, and others a
busily engaged at their books as upon ordinar
| occasions.
, We found Mr.. Cooke in his private ofic
, calmly dispatching his orders, and unexcitedl
conversing about the sudden and unexpecte
blow that had befallen him. He pleasant
welcomed whoever called upon him to expires
sympathy and confidence. He said: 'Yo
= can announce that the firm has temporaril
suspended. Please state also that l beliey
this house will speedily be relieved from en-
: barrassment and that to this end, if needs b.
: every dollar of the means possessed by I'll
| members of the firm will be applied. n
one who has a dollar on deposit here will los
it. Every liability will be faithfully discharged
| l can say no more now"
Mr.. Cooke then directed notices of the ten
| porary suspension, couched above, to
| sent abroad and stated that this event close
+ the doors of three offices-the three leadir
= | houses of the firm in Washington, New Yor
? and this city. Then, with his brother men
s bers, he commenced investigation to a
=. certain the exact financial standing of the firr
e The temporary suspension of the Americs
house does not effect in any way the LondC
:, house of Jay Cooke Mccullough & Co., fro
J | whom this afternoon came the following cabl
q gram. Its statement, when made known
:, the public created the iveliest satisfaction.
q "LoNDoN, Sept. 18.-The London firm
n Cooke responds to his suspension by statil
that all drafts and letters of credit on theI
. issued by Jay Cooke & Co., will be duly no
l. ored."
:, NEW YORK, Sept. 19.-The liabilities of J
n A1Air afaEl f,.~