Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1873-10-02
THE FINANCIAL CRISIS.

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THE FINANCIAL CRISIS.
The suspension of Jay Cooke & Co., has
had disastrous effect throughout the coun'
try-more marked, however, in the North
than in the West and Southland granting
that the crash is now over, its effects will be
felt for several weeks. An uneasy feeling
will prevail, and for some time yet transac.
tions will be limited Several banking insti.
tutions in various States and different sections
of the country, have either suspended or avail
ed themselves Of the thirty and sixty days no.
tice provided in their regulations, and conse'
quently there is tightness in the money mar
ket unknown in the South since the memora,
BILE suspensions of 1857.
AS our readers are aware, the difficulties
originated in the attempt of Jay Cooke & Co.
to carry through the bonds of the Northern
Pacific Railroad. Asa matter of speculation
they undertook the negotiation of the bonds
of this corporation, making, at the same time,
large cash advances upon them. The demand
for the bonds, with which the fortunes of the
house were linked, suddenly ceased, deposits
were withdrawn from their keeping, and they
were compelled to stop payment. This is the
beginning of the trouble, which is now serious.
ly affecting all branches of business, and
which is thus described by Commodore Van
derbilt, who, since the crash, is reported to
have said:
"People undertake to do about four times
as much business as they can legitimately un-
dertake. There are great many worthless
railroads started in this country, without any
means to carry them through. Respectable
banking housesin New York have made them
selves agents for the sale of the bonds of the
railroads in question, and give kind of moral
guarantee of their genuineness. The bonds
soon reach Europe, and the markets of the
commercial centres, from the characters of
the indorsers, are soon flooded with them.
These worthless roads prejudice the CONNER
cial credit of our country abroad. Building
railroads from nowhere to nowhere at public
expense, is not legitimate undertaking. |
mi ght make allusion to Texas, Midland and
other new railroads, but am friend of the
iron roads, and like to see them stretching to
every corner of the United States. They help
to developour commerce and civilization, and
ought to be encouraged All I have to say
is when railroads are to be built, don't victi-
mize the public to build them. When I have
some money buy railroad stock or some.
thing else, but 1 don't buy on credit I pay
for what get. People who live too much on
credit generally get brought up with round
turn in the long run. The Wall street aver
ages ruin many man there, and is like faro.
Mistrust will be engendered till we, as ma
ton, do our business on a more solid basis and
pay as we CO."
To the same cause the New York Sun at.
tributes the disaster in the following para
graph:
"The failures of the heavy concerns have
nearly all, if not all, resulted from endorse
ments of new railway enterprises. The ex-
pansion of enterprise in this direction has been
enormous within the past few years. more
miles of railway having been constructed in
the past six years than were built altogether
before the war. Nearly all of this construc-
tion has been done on credit, houses in every
other respect conservative having shouldered
the enterprises, relying wholly upon the sale
Of the railroad bonds to meet accruing obliga-
tions. Dull times must come occasionally,
and such have been experienced by these
houses in the past few months Prominent
firms carrying railroad enterprises have con-
sequently been forced to shoulder their load
alone, and the drains upon them for interest
and cost Of construction have been enormous.
Shrewd operators like Daniel Drew and Jay
Gould foresaw the necessary result, and went
short of stocks to large amount at the same
time throwing all their influence to hasten the
general catastrophe. The result is that they
are said to have reaped golden harvest amid
extensive disaster. Most of the smaller firms
which have failed are mere stock brokers and
spectators, who happened to be long ofstocks
and were unable to cover in time to save
themselves from ruin"
While feeling of doubt and insecurity
prevails at the North, and especially in New
York city, where speculation in bonds, and
gambling in stocks is carried on regardless of
consequences, it is gratifying to know that in
the South, where the banks restrict themselves
to legitimate business, no such feeling of in
security need be felt, nor is danger gravely
apprehended. Suspensions have occurred in
Baltimore, Richmond and Petersburg-clam.
ed to be the result of hasty and ill-advised
action of depositors; but those having sus-
pended claim assets in excess of their liabli-
ties. A meeting of the merchants and man.
ufacturers of Richmond was held on Wednes-
day of last week, to consider the financial
crisis. The greatest interest was manifested,
and series of resolutions was adopted with
great unanimity, as follows:
That the present condition of affairs in
Richmond has arisen from causes and infu-
ences external to the banking and mercantile
business thereof, and in nowise attributable to
the operations of banks or merchants; that
the banks of the city are at present believed
to be in state of undoubted solvency, and
that no loss can result to creditors if the
banks are allowed to proceed as heretofore
that the meeting deprecates the uneasy feel
ing prevailing in the city, as tending to pro-
duce panic and run on the banks, thereby
likely to cause their suspension, as we'll as the
overthrow of all business that in view of the
undoubted solvency of the banks, and to
prove their confidence therein, the members
of the meeting pledge themselves to abstain
from running on the banks, and confine them
selves strictly to regular and necessary checks
and drafts in the course If business, making
them as light as practicable, and to continue
as heretofore in making deposits; and they
nrna oil narsons havinr business with the