The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1873-10-03
PAST PANICS.

after harvest can AFFECT III.
PAST PANICS.
The Great Crises Of s37 and 1857
[From the New York world.l
THE PANIC OF 1887.
The two causes generally assigned for
the panic of 1887 were the Bank of En-
gland in 1886 requiring payment from
the American houses in London, and the
passing of the Surplus Revenue" bill
by Congress, which latter had the eff
feet of causing the bank credits, which
the surplus revenue, to be
transferred from place to place without
any regard to the laws of trade. The
combination of these circumstances was
too much for the banks, and they all
stopped payment in May,
1897, as well as the three leading Ameri-
can houses in London. The deprecia-
ton of bank notes throughout the cour-
try varied from II to % per cent. The
Eastern banks adopted all proper meas
ures to secure speedy resumption OF
payments, but their efforts were not
seconded by those of other parts of the
country, and in the West and South
new banks continued to be created.
During the remainder of 1887 and in
1888 the excess of specie imports over
exports was $4,000, 900, of which part
was sent to the Bank of England to ena-
May, 1886, the banks of New England
and New York resumed and continued
to pay specie. In the August following
the banks of Philadelphia proposed to
pay specie, and by January, 1889, there
was nominal resumption of payment
throughout the country. October, how
ever, of the same year the Philadelphia
banks suspended a second time; resumed
in January, 1871 suspended third
time the 4th of the February following,
and did not permanently resume till
March, 1912. In 1887 there were 1888
banks in the country, employing capt.
tai of 1920, 100000.
PANIC OF 1857.
Up to August, 1857, that proved so
fatal to all the business interests of the
country, commercial affairs had been
pursuing the even tenor of their way on
the highroad of prosperity. Everything
pointed to still more prosperous figure.
The mania for building railways had
apparently been nipped, if not in the
bud, at least before it had extended too
greatly the country credit, and although
there were several hundred millions of
foreign capital in use, in case of its be-
ing recalled the home market could reg
lister the bonds which represented it at
half the par cost. The wisest Solomons
of banking saw no indications of the
coming storm in the commercial skies.
When, on the 9Th of August, the loans
reached the unprecedented height of
1872, 600, 900, even then a reduction of
so, 100000 or $40, 100000 during the
autumn months without injury to COM
merce was declared possible, and in
pursuance of this declaration the banks
began to contract their loans. Never
was an act followed by more fearful
at the Stock Board Immediately fell.
The failure of a heavy produce house,
although accounted for by the depres-
sion of that particular interest in the
market, and the report of defalcation
in leading railway company caused a
suspic on of a coming crisis to faint the
public security, but failed to seriously
effect the general confidence. On the
oath of the month the news of the sus-
pension of the Ohio Life Insurance and
Trust Company came like thunder from
clear sky. The financial circle vibrated
to it's center; banking officers, panic
stricken by the suddenness of the blow,
at once lost their heads. The days
of 81, seemed once more upon
them and financial chaos was
come again. Stocks and commercial
paper were at once sacrificed at ruinous
rates, other failures were announced,
and rumors exaggerated each calamity.
The Clearing House report for Aug. 29
the first after the suspension of the
Trust Company-showed reduction of
"a, 900, 900 in the bank loans for the pre-
vious week. A defalcation was an
nounced on the same day of $4,000 il
one of the associated banks, and sc
great was the general mistrust that
other institutions Immediately became
suspected of similar dishonesty. The
most substantial securities in the market
sold for next to nothing at public sale
and while the regular discounts of bills
by the banks had been nearly suspend
ed, street rates for money on the mos
unquestioned securities rose to wha
was up to that time unheard of here
five per cent. month-and money
could not be had at any rate on ordinar,
promissory notes and bills of exchange
Commercial house after commercial
house, bank after bank succumbed t.
the panic. The panic extended through
the entire country. The failure of thu
Bank of Pennsylvania, in Philadelphia
was followed by that of the other banks
of that city, and by those of Baltimor'
and of the Southern Atlantic States
generally. The panic was no respecte
of persons. Merchants, bankers, mon
eyed corporations, and manufacturing
companies were swept down withou
distinction. Commercial business wa
everywhere suspended the purchase
and transportation of produce entirel.
ceased and the climax only was reach
Led when, on the 14th of October, TIN
bank suspensions of New York and New
England took place. For this almos
universal suspension the banks coul'
not claim the want of faith among tn
depositors to be the cause. Despit
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