New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-10-27

THE AMERICAN PANIC IN GERMANY

IFRoN THE REGULAR CORRESPONDENT OF THE TRIBUSE.l
BERLIN, Oct ct does not appear that the
financial crash In America affected seriously the Berlin
market. With the Vienna Bourse the relations OF the
brokers OF this city much intimate and when
the storm burst the former last Summer every
exchange In Germany was racked to its foundations
Our escape from similar affection this time may be
ascribed TO two causes, one OF which is credit
able, and the other discredltable 10 America.
There Is OF course. as q general cause, which tho
telegraph has somew hat weakened, the distance be-
tween the two markets. But am speak Of two
special causes. The first Is the preference given
by German capitalists to Federal bonds over all
other American securities, and the steaaness with
which those bonds have held their throughout the
crisis or this fact you may well be proud The inter-
est In American bonds is not speculative Interests that
ia to say. not the speculative interest which depends
1ckleness and fuctuation OF values, the interest," In
short OF stock gamblers but rather that OF the
who ask no more than safe investment OF their title
boards There is therefore, a steady and what may
be called practical demand for Treasury bonds IL Is
a curious fact too. but one which may be easily ex-
planned that there exists greater scarcity OF smaller
denominations, and that these regularly command one
or two per cent more The explanation is, suppose,
that they are sought by the poorer people who have
only small sums TO invest and whose bonds, pur
chased do not readily 40 again upon the market
In other words, they are boarded. IL IL easy to
why the wide distribution OF these bonds among classes
Of people who are practically indifferent TO the move
ments OF the stock lists should mpar steadness to the
value even OF those which not boarded and the fact
! think, agrees with the theory. No more touching
tribute to the credit OF the American Government
be found How admirably 1t contrasts with the pru-
dence OF those Englishmen who now count their
Confederate securities The Germans proud OF their
superior discrimination at the time that first
loans were put forth EYES, we took the Union bonds
and England the rebel, and very well satisfied
with the arrangement" have heard Germans observe
with chuckle
1t Is not so gratifying TO be obliged to confess that
growing Indifference to another class OF American
tiles has, IN great measure shielded Germany against
the late Storm The same prudence which leads Ger
mans to Treasury bonds leads them to suspect
railway loans. The worst and at the same time the
least dsputabe, thing about this feeling Is that it is
growing; and that indeed rapid growth within two
OF three years placed the country in position to escape
the worst Effects which. with you, have followed the
collapse OF such loans. The Germans a slow people
Their railway trains like snails and the telegraph
columns in the newspapers made up with idyllic
indifference to dates. But they slow they also
cautious. They get their news little late; but they
also invest their money with delberation 1t took them
sometime to master Erie under Fisk and Could Little
Emma under Gen. Schenck, aud FL PasO under FIRE.
mont; but, once mastered, these and other curious
problems were remembered, and seryceaby. 1t is, OF
course, truism say that the lesson for
gotten. But It must be said also that the effect
particularly unfortunate in this try account
first, OF the habual caution Of the people, aud second
OF the fact that sales OF American paper here
largely IN the Of permanent investments. There
be different ways OF regarding the apparent indier
of German money centers TO the American crisis
MY theory, have given II TO you, is very simple
one. That Germany was little disturbed by crash
of which " wildcat" railroad enterprises were the
cause best he explained By the fact that
German prudence taught by experience has learned TO
keep clear OF such enterprises.
The overthrow Of great houses Ike Jay Cooke Co.,
Clews CO.. Fisk Hatch, through stock jObbng spec
ulatons, would b. OF course not impossible, but very
difficult in Germany. The reason IL, that the line be-
tween bankers and brokers here more sharply drawn
Od.established banking houses not only do not specu
late on the Bourse they resent imputations
their professional integrity hints TO the contrary There
il no doubt that dscredt which Is here attached 20
stock speculatons is one cause OF the stability OF
great financial houses IL is not exactly dsreputabe TO
he known here broker but no sensitive man
likes to own that his wifes father belongs to
that greedy crowd which assemblies daily in the
Burgstrasse land If German gentleman is talking about
his friend banker he fails add that he is not
a broker ! wish tn avoid giving pain but 1t must be
said that TO call stock operator here Is to apply
a term Of the deepest reproach. BY common consent
the German exchanges left 10 vulgar class Of deal
ers The contempt in which they held secures them
immunity from the reproof OF self-respec and gives
full rein TO the most shameful orgies IN the
whole world Of finance. No exchange In Eu-
rome can boast more scandals than that
of Berlin. And yet precisely because they confined
TO the small gamblers OF whom have spoken, while
the strong reputable houses keep clear OF them they do
not exercise so powerful effect on the commercial
world as at New-YOrk and other cities, where the
participation OF honorable renders the crash
nh Mo ~
financial stability is that honest houses must not put
themselves the mercy the reckless rcksters OF the
BOuTse.
Berlin s suffering however, from disease. which Ia
as unlike your late crisis slow fever Is unlike
stroke Of apOpexy. Banking commerce, building, and
all the monetary relations of society are damaged by
what nothing less than specie imitation The term is
novel but accurate. Germany must thank her victory
over France and the indemnity that there exists
here abundance, glut OF spece-or, to avoid dis
pute about words OF moneywhich IL working the most
disastrous effects industry Speculation is stimulated
to last degree Of rashness 1t Is no eIa2geration TO
say that, as the indemnity began to pour IN, the
Prussan public began to behave like profigate
gameser who has suddenly fallen heir TO fortune and
il has daily fallen deeper and deeper into the delirium
The proverbal economy OF the middle classes gives
TO an always limited by actual means.
The ladies wear more dresses and larger eh0nos the
workngmen ride In cabs. the street beggars
smoke cigars. Prices rise as regularly as the
sun. Berlin, which before the Iwar was one OF
the cheapest is now OF the dearest cities
in the world. I am very sure that gentleman can
live in better style 10 NewYork than at Berlin for the
same OF money. Rents are at least third higher
than Paris All the expenses OF life are nigh, and the
public taste s become perverted that far more pre-
Is exaced OF person who cares to preserve
fair social position. Now this lie wholly an artificial
state OF things that 1t is due to large increase
OF the circulating capital OF the nation without any real
increase Of the general publie wealth. There Is more
money in the land. but more wealth Taxes are as
high @ ever and wages have been but little raised The