Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1873-09-23
THE PANIC.

The financial panic has left a long lisi
Of disasters in its train. Not since 1857
has there been such commotion among
the bankers and spectators in stocks and
bonds in New York as visited that city
last week. The effect of it will be felt in
GREATER or less degree all over the coun-
.trv. deranging business and weakening
confidence for some time to come. The
accounts which reach us of the disasters
probably represent the situation in its best
light. The extent cannot yet be fully
known. The names OF the largest and
most prominent firms and individuals
wrecked appear in the reports, but the
loss and oyerturn reach far outside oithem.
Fortunately the blow is confined principal
IL TO railroad bonds and stocks, leaving
the regular business of the country unaf-
fected except in an indirect manner. There
is no evil without some good, and the ben
eft Of this alarm and loss will be TO checl.
extrayagant and unsafe ventures in new
railroad schemes, and keep them within
reasonable and prudent bounds. The les
son was needed and perhaps will be worth
all that it costs. heavy though the expense
may be. The New York Times says:
The banks have been departing from their
legitimate line of business. There has been
4 rsilroad mania, and the banks have lent
large sums of money on railroad bonds, to the
exclusion OF the merchants. If these banks
had confined themselves to the transactions
which come properly within their scope, we
should have seen no tronble in Wall street
this week. They have practically gone into
the business of contractors, brokers, and spec
ulators. The projectors of all sorts Of new
roads have absorbed the capital which right
fully belongs 10 the legitimate trade of the
country. Lastyear, over 5000 miles of new
railroads were built, not 500 milss of which
we're really needed, or can be turned to any
profitable use. The foreign markets have
been glutted with these schemes. Many gross
swindles OF one kind or other have been foist-
ed upon these markets during the last two or
three years. At last, confidence has been
broken down. For some years to come, moth
ing but first mortgage bond will find ready
acceptance. Many of our bankers accumu-
lated railroad bonds in the expectation that
they would be taken in Europe. They sup.
posed they would get commission, and with
this they proposed to retire from the scene
But the foreign markets suddenly failed to
take the bonds offered to them. For the pres-
ent they have had enough. The investments
submitted to them of late years have not paid.
A great deal Of capital has been sent over
here for which no return whatever has been
made. The public would be surprisedif they
knew how many "wild-cat" schemes have
been placed upon the markets in London or
Frankfort with temporary success. Now the
reaction has come, and we are suffering the
consequences of loss of confidence in one
important branch Of our national enterprises.
The Tribune takes the same view of the
situation as the Times, both agreeing that
too much railroad speculation is at the bot
tom Of the difficulty. The Tribune says
Aside from the great misfortune of the fail.
ure of Fisk & Hatch, following hard upon tina
Of Jay Cooke & Co., 1t has been not at all ,
commercial, hut purely fancy stock crash
Not mercantile house is affected Not ,
Savings Bank is troubled. General business
in New York has rarely been better, and there
is little or no alarm outside of speculative cir
Giles. But holders of third rate railroad stock,
have suffered and are destined to suffer. Fo,
many concern not yet reached. there is
through the approaching Winter, bad out
look. Fancy prices have been broken, the
public disposition to invest in fancy stocks is
gone, even meritorious railroad enterprises
will be viewed with distrust, and shaky houses
may expect to spend the rest of the season in
diligent underpinning.
There are many projected lines OF rail-
roads that VIII feel the panic like blight.
1t Will postpone their construction until
they can be safely built on legitimate bus.
siness principles, which, after all, is moi
the worst thing that could happen. 1t i;
suggested that the North Pacific will cal
upon the government for aid. We do moi
yeti that the condition of the compan,
is such as to reduce it to that extremity
although the downfall of their financia
agents in New York, Jay Cooke & Co.
indicates that they must be heavily embar
raised. We imagine government would
be very slow to lend aid for for such pur
pose at this time. although the suspensio,
ofthis great work would be calamity o
national Importance. We hope the roa,
is not in this strait, but that ample mean
VIII be forthcoming from its own resourc
es for its completion. Holder ofits bond
should possess themselves in patience
making no extravaganza sacrifice to turn
theif securities into money, trusting tina
all Will yet be well. Such an undertake.
ing, advanced as far as it is, must and will
be finished by some means, after which
there seems to be no reason to doubt tina
its business will be enormous.
A IDEINTO THE INTERIOR.
GoRHAM, N. H., Sept Is, 1873.
To The Editor of the Journal: