Green-Mountain freeman. [volume] (Montpelier, Vt.) 1844-1884, 1873-09-24
Gle freeman.
The Financial Troubles.

The failure of jay Cooke and Co. and tina
of Fisk and Hatch, followed by the downfall
of many banking houses OF less Importance
has created an excitement throughout thu
country exceeded only by that caused by thu
great financial commissions of 1897 and 1857
The crises of those years affected disastrouslJ
all the channels of Legitimate business
throughout the United States. The present
trouble will probably be confned to much
narrower limit and not seriously injure the
mercantile class or the general public.
The two great banking houses that have
gone under came into prominence during the
war by their energy and the succ SIS which
attended it in placing" o." working Oft >
great government loans. Since the war Jay
Cooke Co. have engaged largely in railroad
enterprises and it is attempting to shoulder
railways that has broken down these great
firms.
When the war closed the country entered
upon system of enormous railroad expan-
sion. Accustomed to vast expenditures both
the nation and individual capitalists engaged
in the seductive work which was not only to
accommodate our people with needed facilities
of transportation but which was to 6 develop
our vast resources" To join the Pacific
shore and the Atlantic sea board was an IN
dertaking national in its character and, had
it been properly conducted, one whose sue
cesful accomplishment would have brought
honor unmixed with shame upon the man
ayers The course which was really taken
Was to ''pay as you 90 by borrowing" and,
successful in its immediate re- ults, it dazzled
observers and prevented examination for
years.
1t is estimated that six hundred millions
of dollars have gone into railroad enterprises
in the United States since the war. How
much of this has actually gone to pay for
building and furnishing the roads AMI how
much as percentage to bankers for advertising
who must be royalty rewarded fo- lending
the great business ability Of their members
to the work is a hard problem IN simple di-
vision. The money to pay such vast OUTLAWS
has been obtained by wholes lie vending
Of promises to pay, many of which can never
be fulfilled and will gradually become classed
where they properly belong as lies.
Nothing has done SO much to hasten this
classification as the revelations of last winter,
The legitimate result was a want of cOnhlencs
in this class of paper in men who had. money
to loan and it is very likely that the cloud Of
dlstrust settled over many good securities as
well as over those that deserve it. Jay
Cooke i Co. were placing Northern Pacific
bonds IN large amounts. With cOnidence in
the success of the enterprise or in their pow
O. to convince others that it would succeed
they made larger advances to the road. TINS
raj way gets its moaey on the credit of a
great future. 1t is building through wild
erness that is to be the gran Try of the world
so said Jay Cooke & Co . and so said hun
dreds of national banks throughout the couu-
try, lending their own good name in quasi
endorsement Of paper to be sold.
We hope these predictions will all come
true for the good Of those who have bought
the bonds, but should like to know how much
the banks that have sold these bonds 10 out
siders have really invested thems elves. One
thing is pretty certain that men who have
small sums to invest can do better than f.
put them into Tar off railway bonds under
the present state of management in the
United States. If one wishes to engage 10
railway construction there is opportunity
enough without going far from homo AMI if
experience with home railways is not salts
found advantageous. 1t is true that raj ways
develop the country and it is upon an ezag-
geraslon Of this truth that So macy wild aud
proftless operations have been engaged in.
Individuals and towns can themselves see,
when the proposed enterprise is near al
home, how much the general increase in
valuation will affect them AMI 80 judge how
much they can afford to give toward new
line. Aid furnished in this way is on fail
understanding on both sides and no bushes:
enterprise should be sanctioned which gives
an exhibition of nerve - in lying on the
one side OF the other
Jay Cooke & Co. found this summer that
their sales of bonds were not up to the de-
mands of the company for money and over
rating the feasibility of removing the dis rus
and increasing the sales made the large ad-
vances of which we have spoken. Fiilure
has come swiftly after. Other houses en-
gagged in the same SORT of business AMI, not
realizing that buyers will hereafter examine
railroad purchases with the same care that
they do dry goods AMI wheat, have fallen
The dlstrust that has been growing for the
last few months has simply ripened.
The effect if confined where it rightly be-
longs to those who have been engaged in the
speculative enterprises of the day W IL not b.
evil. Many innocent purchasers and holders
OF poor securities will suffer AMI so far tn
coming of the crisis is to be deplored Bur
the arrest of the current aud the savihg o
thousands who would have been swept into
it by various pretenscs is happy thing
There should come to the country a return
to contentment with small profits and t
more careful ways Of business
Many Of the minor incidents of the crisi,
reveal the rotten c)n1 ton OF aff.trs that
comes of careless man ,gement Carlton, tn
Secretary of the Union trust Company, i
found to be defaulter to the amount of hal
a million dollars. The president Frothing
ham. has been for four months 10 Europe an
the directors have let Carlton, who is youn
man, have the entire control of affairs. Th
demand of the stock salers that Presideu
Grant should lend the banks the legal tende