The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-09-20

The crash in Wall street, though it involves
a few of the best known banking houses in the
city and has destroyed more than dozen of
the smaller operators, cannot have the effect
of some previous panics, notably that of 1867,
upon the business interests of the country.
Jay Cooke & Co. failed confessedly because
they were carrying the bonds of railroad
which was paying little or nothing upon the
capital already invested, and which promised
so little in the future that these bonds could
not be negotiated. Fisk & Hatch. who also
failed yesterday, were dealing in the same
kind Of insecurities. The smaller houses were
to some extent dependent on the large ones,
and Of course were operating in the same class
Of stocks. 1t is because of this fact that we
think the general business interests of the
country will not suffer. Most Of the railroads
whose stock is now embarrassing the specula-
tors are wildcat affairs, built, as Commodore
Vanderbilt phrases it, from nowhere to nowhere
and it was impossible that they should long
continue to Withstand the shocks Of specula-
ton, based as they were upon mythical capital
and being without business and without profits
A reputable house which conducted the nego-
tiation of their bonds was doing q wrong to
oil the legitimate commercial interests of the
country. When Jay Cooke 4 Co. undertook
| to carry the bonds of the Northern Pacific
Railroad they were laying the foundation of
their destruction and the destruction Of all
similar dealers in similarly baseless enter
| prises. The downfall of this house, owing to
their relations with this road, was impending
for long time but now that the crash has
come it is to be hoped that the atmosphere
will clear and that speculation will no longer
be allowed to divert sound and legitimate COM
mercial enterprises from their regular chan
nels into the devious way of the gamblers of
| the street.
Too many American business men are
in great haste to be rich They cannot
! confne themselves to the quiet and plod-
ding ways which are the only secure road
to wealth. If they were able to pay as they
60 they would feel that they are not doing the
business of which they are capable, and they
consequently undertake much more than they
can accomplish. Under such circumstances
it is not long before their paper is tossed about
failure inevitably follows In the language of
Commodore Vanderbilt during recent inter-
view, there are too many men who ''want to
be rich too quick" It is the story in
nutshel-the keynote of failure, not
merely of one, but of hundreds. But
for this feeling among business men, this
haste in amassing wealth, we should not have
been compelled to record the long list of dis
asters yesterday and the day before. It was
this desire and the ambition of young specu-
lators to be princes of the money market and
kings of the railroad monopolies that brought
the crash of the hour. The houses whose
failure is in the mouths Of everybody are all
| Cooke 4 Co. we're built up through the
favoritsm Of Mr.. Chase in the early days Of
the war, and people had come to regard them
as in every way as sound as the government
bonds, the negotiation Of which gave them
their financial standing before the country.
Fisk & Hatch were also new as compared with
other well known bankers, but their established
any shock if they dealt only in legitimate ven-
lures. The Same remarks apply, ALSO
to some of the other houses which fol-
lowed in the wake of these, both in their
methods of doing business and in their down.
fall. These young men in their desire to be
rich forgot the old-fashioned maxims Of bust
ness, but, fortunately, while by their failure
they made o stir on the surface and created
widespread fear and alarm among the young
brokers who, like them, are indulging in the
reckless spirit of speculation, they failed to
affect the solid and substantial interests of the
country. Many depositors will suffer losses
through them, but aside from this individual
suffering business will go on without material
| disturbance.
The good results Of these failures-for even
disaster often brings goodwill be to straighten
out the doubtful enterprises which have been
| the ruin of the unfortunate brokers. Ever
| since the war it has been the custom with
many leading houses, and especially with
those which acquired reputation during the
war, to glut the market with the bonds Of
projected railroads. The successful construc-
ton of the Union and Central Pacific gave
great impetus to these projects, and high rates
of gold interest we're promised on roads where
scarcely rail or tie was laid. The whole
thing was o bubble, and it was certain that all
of the worthless companies would collapse in
the end. Now the collapse has come, and
with it it involves the destruction of banking
houses and possibly of railway corporations,
which were sound before they became ex-
tended by their efforts to monopoGze the en-
tire trade of the country. These things not
only bring failure to those who undertake
them, but the public are victimized and Amer
can credit is scandalized and weakened, both
at home and abroad, and especially in foreign
markets. When the crash comes the only
thing that is consoling is the fact that the
mythical enterprises are swept away and that
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