River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1873-10-14
PANICS OF THE PAST.


Tne Great Crises In this Country and
in London-'37, "a, go, and 90.
PANIC OF 1897.
The New York World of September
% thus reviews the history of former
financial hurries
"The two causes generally assigned
for the panic of 1887 were the Bank of
England requiring payment from the
American houses in London, and the
passing of the =" Surplus Revenue" bill
by Congress. which latter had the
effect of causing the bank credits,
which represented the surplus revenue,
to be transferred from place to place
without any regard TO the laws of trade.
The combination of these circumstances
was too much for the banks, and they
all simultaneously stopped payment in
May, 1887, as we'll as the three leading
American houses in London. The
depreciation of bank notes throughout
the country varied from IL to % per
cent. The Eastern banks adopted
all proper measures to secure
eBttuN VI pay
ments, but their efforts were not
seconded by those of other parts of
the country, and in the West and
South new banks continued to be
created. During the remainder of
1887 and in 1888 the excess of specie
imports over exports was SIS, 1000, 900,
of which part was sent to the Bank
of England to enable American banks
to resume. In May, 1893. the banks
of New England and New York resumed
and continued TO pay specie. In the
August following the banks of Phila-
delphia proposed to pay specie, and by
January, 1889, there was a nominal re
sumption of payment throughout the
country. October, however, of the
same year, the Philadelphia banks sus.
pended a second time, resumed in
lS4l suspended a third time the 4th
of February following, and did not
permanently resume till March, 1912.
In 1887 there were 7S3 banks in the
country, employing capital of $780,
900, 900.
PANIC OF 1857.
| Up TO August, 1867, that proved so
4 fatal to all the business interests of
the country, commercial affairs had
been pursuing the even tenor of their
way on the highroad to prosperity.
Everything pointed to a still more
prosperous figure. The mania for
building railways had apparently been
Bipped, if not IN the bud at least be-
fore 1t had extended too greatly the
countrys credit, and, although there
were several hundred millions of for.
eign capital in use in case of its being
recalled the home market could regis
ter the bonds which represented ii nj
half the par cost. The wisest Solomons
of banking saw no indications Of the
coming storm in the commercial skies.
When, on the sth of August, the loans
reached the Unprecedented height of
1922, 600, 600, even then reduction
of $l0,000,00 or Sl2,00,000 during
the autumn months without injury To
commerce was declared possible. and
in pursuance of this declaration the
banks began 10 contract their loans.
Never was an act followed by more
fearful consequences. The prices Of
securities nj the Stock Board imme.
diately fell The failure of heavy
produce house, although accounted for
by the depression of that particular
interest in the market. and the report
of u defalcatlon in leading railway
company, caused suspicion OF a com.
ing crisis to faint the public security,
but failed TO seriously affect the gen.
eral confidence On the oath OF the
month thu news of the suspension Of
the Ohio Life Insurance and Trust
Company came like thunder from n
clear sky. The financial circle vihrated
ta its center, banking officers, panic
stricken by the suddenness Of the blow,
ut once lost their heads. The DAYS of 81
seemed once more upon them, aud
financial chaos was come again. Stocks
and commercial paper were at once
sacrificed AZ ruinous rates, other fail
ures we're announced, and rumors
exaggerated each calamity. The Clear.
\ iag House report for August 2g-the
/ first after the suspension of the TrHst
4 Company showed reduction of
/ $4,000, 900 in the bank loans for the
previous week A deialcation was an.
nounccd on the same day of S70, 900 in
one Of the associated banks, and so
great was the general mistrust, that
other institutions Immediately became
suspected 81 similar dishonesty. The
most substantial securities IN the mar.
KIT sold for next 20 nothing az public
sale, and while the regular discounts
Of bills hy the banks had been nearly
uspended, street rates for money on