The Portland daily press., 1873-11-04

NEW YORK, Nov. 2, 1873.
Matthew VII, 26 and 81 furnishes an appro-
pirate text for a sermon to-day, suggested by
the collapse of the great house of the Spragues.
In this first crash of importance in mercantile
circles, we have a forcible illustration of the
penalties attaching to persistent violation of
the obligations of prudence and conservatism,
which every man iDcurs who runs into debt
The cousins Sprague were born rich. Their
fathers were shrewd, thrifty, enterprising man.
ufacturers in Rhode Island and bequeathed to
their sons fine property, and an honored
name. The young men had only to follow in
the footsteps of their sres, pursuing a bust
ness already established, maintaining credit
that had never been imperilled by hazardous
excuses of speculation, and they were sure 10
realize all the enjoyments Of life that mere
wealth could give and to be among the fore
most favortes of fortune. There seemed to be
no adequate motive for their dashing out with
all sails set into the fathomess sea of debt.
The rewards were obviously incommensurate
with the risks. They had means enough to be
able to do business sufficiently large for any
reasonable ambition on a strictly cash basis.
But instead OF this it has appeared as if they
were ucSlTOuS OIL SuOWlUS now luuCu StIdlu
their credit would bear, without it's breaking.
They established house in New York to sell
the products of their factories, and in order to
increase the business of the metropolitan firm
they multiplied their Iuills. Nor were they
satisfied with combining themselves to their
legitimate calling, stupendous as were its
ramifcations, but they embarked in numerous
extraneous adventures. They bought villas by
the seashore, estates at the National Capitol
and undertook to control everything in Provi
dence from trotting park to savings bank.
They soon got short of money and became
chronic and importunate borrowers. Their
New York branch created bureau for the
manufacture of paper, and the time drafts of
A. &. w. Sprague accepted by Hoyt, Sprague
& Co., were on sale by the quire in every bill
brokers' Office hereabouts Whenever there
was pinch in the money market the severity
of it was measured by the rate at which the
product of the Sprague paper mill was going.
When it got to IL per cent per annum, genuine
business paper based on actual transactions
and signed by cautious merchants would COM
mand u or 8. In times of extreme plethora of
money the Sprague acceptances would sell
freely, and at only slight advance over bet
ter article. But in periods of scarcity it was
sure to rise earliest and highest, for the simple
reason that the supply was illimitable.
This has been going on for dozen years.
These people have had several sharp warnings
of the danger they were rushing upon. Their
| solvency has been discussed, their manage
| ment criticised, their inprovidence reprehended,
| and this possibility of their ultimate bank
| fuptcy suggested in many bank parlor and
| money lenders Office Their credit has been
| gradually growing weaker and weaker year by
| year, since the close of the war. First one
| capitalist and then another and another took
| flight as he scanned the pocket books of the
note brokers, and saw in every one of them
vast piles of this stereotyped form of debt
| Credit is a sensitive thing and does not bear to
| be trfed with too much. Considering how
| the Spragues trifed with theirs the wonder is
not SO much that they failed as that they didn't
| fail sooner. Aud perhaps nothing could illus
trate the extent to which blind faith had OBJ
| liberated all the landmarks of prudence of late
years, more clearly than the fact that this sort
| of fnancierng could be pursued for such a
| length ofltime, and ON SO extensive scale with
i comparative impunity.
| At length we have the crash and the exhibit
| 1t is the old, old story. Enormous debt, offset
by assets largely in excess of the liabilities
but hopelessly unavailable and of most pre-
carious value. What happened to Mr.. Wander
| bits proteges in their stock dealings has hap
| pened to the Spragues with their manufacture
| ing hazards. The effects in both instances con-
sist simply of margins, which in the one case
| hoe nd in ho nth Nv nd
| ably will be obliterated, as the rubbish disap
pears which will be gathered around the wreck
of the paper decade, until it has to be removed
to prepare the way for reconstruction.
This failure will be popularity regarded as q
public calamity There are certainly some ele-
ments of misfortune in it. That considera
BILE number of operatives should be suddenly
deprived of wages for work is a matter OF
poignant regret And yetif such a thing were
possible, it would be cheaper for the people to
support every one of these factory hands than
that they should afford them subsistence from
system of expanded credit which in effect
constitutes burden upon the normal industry
of the country. If factory products are sus.
tanned by artificial means, an undue proper
ton of capital and labor will find employment
in that direction until the stern laws of trade
compel readjustment. And it will probably
De demonstrated before this panic is over thai
the facilities with which money has been Dor
rowed IN the open market for few years past
nave had the effect to stimulate undulv the
manufacturing interests of the country. to the
neglect and injury of that more important and
more manly pursuit, agriculture.
However opinions may differ on this point +
is mistaken philanthropy to bolster up a,
improbable branch of industry, for the sak
of providing occupation for the few or tn
J many who get wages by it. And when an,