The Manitowoc tribune. [volume] (Manitowoc, Wis.) 1866-1878, 1873-09-25
THE RECENT FAILURES.

From the Wisconsin State Journal Sept. 20.
The panic in Eastern money markets.
occasioned by the failure of Jay Cooke
4 Co., seems not to have abated yester-
day, as dispatches the day before pre-
dicted on the contrary, which seemed
to US the Inevitable result, several other
banking houses have suspended. This
was owing to the sudden fab in stocks
which they were carrying.
The system of loaning on margin of
stocks. as practiced by the banking houses
of our large cities in the East, is always
attended with great risk during panic
The prominent stocks on the Board that
command well-known rates can be bought
usually on margin of from s to 10 per
cent. So if Northwestern is to-day
quoted at 60(as it was week agol parties
can borrow so on it by paying the 10
cents difference and hypothecating the
stock. Yesterday Northwestern vent
down from 60 of week before, to 49,
thus losing the margin, and more. 1t is
therefore readily seen that large amounts
are forced upon the market, and at ruin
Gus rates to the speculator who hypo-
thecated them, and at loss to the ban
ker of whatever amount the rate falls
below the margin loaned upon.
But one 6dak is reported as suspended,
and that the First National of Washing
ton. whose intimate connection with Jay
Cooke 4 Co. was the cause.
Unlike private banking firms, generally
consisting Of two or three members. this
bank has onto nufnDer OF stockholders,
many oil whom are wealthy enough to pay
individually the entire liability. Stock
holders in national banks are personally
liable for not only the amount of that
stock, but double the sum. and hence we
anticipate no loss to the depositors ct
VI ashlngton, for the reason shat the stock
holders are good in themselves.
W hlle under the present pressure we
may expect to see some failures added to
the list IN New York and Philadelphia,
and the ripple of the eastern wave will be
slightly felt in the west; it cannot have
much force outside of the speculative
circles, aud such localities have mainly
depended upon and linked their interests
with the Northern Pacifc-as Duluth and
the extreme Northwest. The intrinsic
rdlue of Northwestern is no less to day
than week ago. The great mass of
business men are worth as much this
as last.
The suspension cf Jay Cooke i Co
was caused by heavy advances made to
carry forward the construction of the
Northern Pacific Railway The road is
to be 2.200 miles in length. About 500
miles are completed and the company
owns seventy-two locomotives and 500
cars The expenditures thus far amou Mt
to SIS. S04, 374. The franchises of the
company with lands aud completed road
will, it is believed by the directors, induce
other capitalists to finish the line. But
doubtless an extension of time will be
asked of Congress in which to build it
The government will not lose cent BY
the failure. The National Life Insurance
Company will not be affected. No bank
in Wisconsin or Chicago deposited with
Jay Cooke & Co. There were dozen
suspensions aud failures In New York
yesterday, and a number more to-day,
but the general beliefis that the worst is
over. The government is to come to the
relief of the market by buying bond.
(which are very low and depositing funds
1t Sought Sl0,000.000 of bonds to-day.
Since the above was written the stu
alton in Financial Circles has improved
ve4y much. The principal houses which
suspended were Jay Cooke & Co., Fisk
& Hatch, Henry Clews & Co. and the
Union Trust Co. The only failure Sc
far reported is the First National Bank,