The New York herald., 1873-09-22
FINANCIAL and COMMERCIAL.
MORE ABOUT THE PANIC
Unbridled Speculation in New
Railroads the Cause.
S7oO,OOO.OOO ON PAPER.
Who Holds the Promises to
Pay?
What Will Restore Confidence 1.-THE Action
of the Banks and Treasury.
THE MONEY MARKET.
Wide and Wild Tluctuations-Pu Purchase
of Government Bonds.
THE BANK STATEMENT.
What Will Restore Confidence 1.-THE Action
Of the Banks and Treasury.
THE MONEY MARKET.
Wide and Wild Observation-Disclosures
of Government Bonds.
THE BANK STATEMENT.
Stocks and Their Range OF Values In 1871,
1872 and 1873.
WALL STREET.

1872 and 1873.
WALL STREET,
SUNDAY Sept. 81, 1873.
The past weeg closed upon one of the most ex-
citing chapters in the financial history OF America
. chapter replete with meaning and lesson that
will not escape the consideration OF thoughtful
men, ior 1t has presented a new phase OF our mon.
etary condition and evolved new problems that
have to be grapped with by the best intellects OF
the country. The reign OF prosperity never seemed
more firmly established. Crops bountiful, busi-
ness full OF premise, the demand upon the products
Of the nation by foreign countries steadily ncreas
ing, the balance OF trade abroad enlarging in our
favor, money abundant at home and well distrib
pted among the people and all
DISTURBING INFLUENCES
apparently at rest. In the midst OF this peaceful
condition the atmosphere suddenly darkened,
storm clouds dr1fted by ana before shelter could
be found tornado began its sweep across the COM
munity, at once strange in its inception,
curious in its results and unnatural in its
swift career 1t Is only last Monday that
this column presented review Of the
events precedent to the commercial crisis
In 1887 ana 1857 The object OF that article was to
point out the shoals and qutcksands upon which
we seemed to be steadily drifting, and to warn the
people who speculate that the suspensions then
beginning to be reported were only the foybell
o dangerous coast sounding their
NOTES OF ALARM.
Less than week has elapsed and we are tossing
about among the breakers. Fortunately, however,
the control OF the helm has not been lost and good
management may yet rescue tho country from the
perils by which for the moment it seems to be
beset. There is no question that our difficulties
are traceable directly to unbridled speculation
In new and Improbable railroads. OF these during
the last four years there have been built from
R50O0 to 3o0 900 miles, at expense Of say $4,000
to the mile, or, at a low estimate, between seven
and eight hundred millions OF dollars sum total.
Who holds the
''PRoMIsEs TO PAY2''
They are distributed all over the country, are in
the hands Of individuals and corporations and
constitute the securi ties on which capital has been
raised for the prosecution of other undertakings.
1t has been urged that this tremendous expansion
Of credit on 30 weak basis was vulnerable
point Of our financial fabric, and, ut last, events
have fully demonstrated the truth of the warning.
paper balloon had been perforated, and the In
evitable collapse occurred. The failure OF certain
houses engaged in sustaining the credit Of two or
three OF these corporations had its natural effect
upon the speculative arena OF
THE STOCK MARKET,
and with the rapid decline OF values there money
became stringent and banks withheld accommoda-
ton except upon the most undoubted security,
until at last active operatoYstn the stock Exchange
themselves were one by one forced to succumb to
the situation and local panic became
supreme. The suspension OF some OF the banks
and thousand dying rumors concerning Others
served to intensity the excitement. and were 1t
not for the prompt and prudent action Of the Gov
erning Committee OF the New York Stock Exchange
IN closing its doors and shutting down on all fur
ther speculation within or without the Board,
under penalty OF expulsion, no one can tell to what
extent
TIE VOLUME OF DISASTER
might have swelled. Such Is the story OF the hour.
Underlying it all is the principle that when the i'm
provements OF o country are IN excess Of the clear
surplus Of the savings OF its people imitation invari
ably follows and reaction Is sure to result. 1t is
folly to predict when or where the panic will cease.
The banis by their united action, which goes In
force tomorrow mofning, have already provided
one possible check, while the Secretary Of the
Treasury may interpose another by selling gold
and allowing the proceeds to remain in the banks,
taking therefor certificates Of deposit, and by max
Ing use OF his currency balance Of $4,000, 600 In
such manner Is likely to be speedily determined
on by his financial advisers Confidence viii be
further restored BY
TIE RESUMPTION OF PAYMENT
by the Union Trust Company, should such an event
although undoubtedly o source OF much incou.
venience TO Its members, must hkewtse ezers
healthy influence on tie eooerai interests Of the
street. II is however, q good deal like the act OF
the Irishman who broke the thermometer because
he thought 1t made tfe weatheT hot. Deprive one
OF effects and he h not very nbely 10 be troubled
BY causes. Thus ar It is noteworthy tae the CRISIS
has been circumscr1bcd. 1t rs in no sense o com.
mercial panic. Trade and tratiesnen are not SUI.
artp md hact. ,os,l
that shows aGngN. II Is Also significant that all
day Saturday soiid-sooking men, who are rarely
seen on Wall street; artisans and others were
eager in their endeavoss 70 exchange their earn
ings for some of the stocks that had suffered do
probation and ou the speedy Improvement OF
which they counted confidently. In
TIE MONEY MARKET
during the week, the fuctuations wore wide and
wild. Early per cent was the minimum rate on
call loans; later the rate advanced TO u per cent
per diem, and at last In The midst OF prevailing
excitement, stocks were turned at the extraya-
giant price OF per cent per day. representing the
tremendous interest OF l,s25 per cent per annum.
The enort by the government 10 buy
BONDS os FRIDAY
resulted IN the purchase Of only 81 4sa, ESQ., q sum
"oich anorded no pcrccptible relief TO the wants
VI she street. IL VIII be properly Inferred from
this fact that government securities are stronolv
nelo and In their frmnese continue to represent
the popular confidence.
TIE BANK STATEMENT
rs OF unusual interest, inasmuch as A. shows n
weaker condition OF these Institutions and a re-
serve that has been largely reduced during the
past several weeks. The following Ia comparison
OF the figures OF tho past two weeks
Loans, p is ss 20 100 nee greno.
specie 20,442,200 1S,844,CO0 Dec, 1887 100