The New York herald., 1873-10-13
CLEWS, HABICHT & co.
Failure Of the American House and the lnfln-
encc Of the American Panic in London.
POSITION OF AMERICAN HOUSES
Whv London Was Untouched by
the Monetary Crisis.
LONDON, Sept. %, 1873.

ordinarily feels, and in many quarters this In
terest has been not unmixed with apprehension;
for from the people who tell US good deal about
the international intimacy and relationship OF Eng
land and America we have heard so often that
the extensive concerns OF the two great cities
were inextricaby involved one with the other,
and that it seemed the remotest of possible con-
tingencies that New York should be ruined or even
seriously damaged by financial calamities and
London escape unhurt.
The announcement of
THE SUSPENSION OF JAY COOKE co.
was an absolute surprise TO nearly every one. It
is true there were plenty OF people, as there are
always, who had known all about it for long while,
and who could inform you rather better by winks
than words that they had had special revelation
on the subject and knew the thing must come;
and there were some, amply capable OF compre-
hendng financial difficulties who could see good
reasons for the trouble, but the multitude OF men
were taken unawares.
Attention was naturally turned to the house OF
Jay Cooke 4 McCulloch, in Lombard street. and
this attention took the threatening form OF very
active presentation Of all sorts Of obligations as
soon as business began on Friday, Jay Cookies fai-
ure having been made known to the public here by
the kilograms in Friday mornings papers. There
are several Of these American houses here as TO
whose exact relations with houses in America there
As some little uncertainty People are not fully in
formed whether they are parts OF the same houses
or different houses, only acting as agents for one
another. In this case, being in doubt, they played
what the public always considers trumps in such
circumstances-they presented their bills. And
they all got their money which chagrned and
disappointed them a little, In so far as 1t
seemed to make their apprehension a triie
exact calculations, in virtue OF which they had
reached definite conclusions that this house must
necessarily have gone down in the ruins OF the
other. But people are right In their reasoning as
to the position OF house. and lose their money,
doubt If their success in the reasoning compen-
safes for the grievous necessary consequence;
while If they are wrong, and get their money.
though there is q momentary chagrin there is
later sense of substantial satisfaction that quite
OvercOmes 1t and assists them to become recon-
ciled with themselves.
HOLDERS OF JAY COOKE AND M'cULLocH's oBLIGA-
TI0NS,
as soon as they heard Of the failure Of jay Cooke
in America, were in a state OF alarm, and as they
had to think OF something IN the interval between
their seeing the news in the morning paper and
the opening OF the house, when they might make
their rush al the counters, they naturally
thought OF the things most tormenting TO them
selves, and did their utmost to prove
that the house would not pay. In this
interval 1t was remembered that Hugh McCulloch,
the head Of the house here, had left London for
New York the week before. Some little inquiry
seemed to make IL certain that he had not only left
London, but that he had also given up his house
here, which seemed TO indicate that he did not
intend TO return and from this point people Ia an
excited frame Of mind very readily reached the un
pleasant conclusion that Mr.. McCuoch knew
what was coming and had run away. 1t seems to
me very likely that the excited mind has done Mr..
McCulloch some injustice on this point
Mr. Paleston was
THE ONLY PARTNER IN LONDON,
and naturally found himself in trying position,
OF human nature, Que TO the warm sympathy ex-
pressed in his difficulties by MS many personal
friends and the general tr;nIa expression Of good w
but ! believe he was not compelled 10
as. any Of them to lend him any
ent personally that he had not the slightest init
nation OF the coming event and first knew OF the
disaster, every one else did, by reading the news
McCulloch is not the same as the house OF Jay
Cooke d Co.. but IL had extensive relations with
1t, for the latter had been giving lately heavy com
mercial credits-credits to merchants OF all sorts
purchasing goods in Europe-and these credits had
been accepted Tor payment by Jay Cooke McCul
loch. Consequently the house in Europe was
deeply involved in the difficulties OF the house il
America II was obvious IL must lose heavily, and
1t was possible the gulfs might wash Ii down.
Now, to wake up on tolerably bright september
morning with clear conscience and fail
iaSe musns quietly the easy operaons
the day, and there to turn over the
beautifully PRINTED, Tines 81 Looking ok for the news
you have accepted and must pay Is bankrupt
.'must give us pause" This would arrest the easy
now OF nearly any ones thoughts and embitter the
best possible coffee. To know that you must EN-
pi0y the whole day in paying out money that can
whether you ought not TO begin the day by putting
your own house outside the pale OF solvent houses,
would disturb the temper OF whole academy
OF philosophers. and ! am afraid that the best OF
the stocs himself In such circumstances would
have broken his egg with sucn energy as TO have
made an unsighty spectacle OF the whole table
cloth in his neighborhood 1t is not to be won
dered at therefore, that good-natured and amlable
Mr.: Paleston had the sympathy OF his frlends.
Mr.. Paleston took the advice OF the two expert
enced bankers, j. s. Morgan and j. w. Cater, tC
what he should do, laying before them the wholecon
diton OF his business, and under this advice faced
the storm, paying all bills OF Jay Cooke Il Co. that
were already accepted by the London house, but
declining to accept new ones. Up 10 the present
writing therefore, the house OF Jay Cooke McCul
1och has sustained It's own credit, and IL may be
able to adjust its losses with the American house
when In calmer times the abundant assets' OF
the latter il these are not Imaginary VIII be once
more oi some value In the market
DEPRESSION.
ror Gay or TWO alter the Jay Cooke suspension
tne uncertainty fingered In mems minds and then
the people began To ieel more confidence and TO
natter themselves, as Noah's famous neighbor did,
that 1T wouldn't be much OF Il shower,n and by
wednesday they were iuily prepared for the tele-
8Iani from new ork Wmch appeared in the papers
OF that morning that 'Mr. Richardson believed the
pane TO have endedn on Tuesday evening teie.
gram had been received in LONDON from MIR Henry
Clews saving :-"The panic has entirely subsided
and we have escaped unnurtn But the course or
the day on Wednesday brought NJ and the ciaps or
thunder out OF sky that IL not quite Gear seemed
rapidly clearing.
THE SUSPENSION OF HENRY cLEws K co.
This announcement was. immediately follow ed
by the suspension oil the house OF Ciews HaDicht
Il Co., OF London, the fiscal agents IN Europe OF
the United states government The liabilities OF
this house are stated at f3o5,0 or $500, 900,
and their assets at 100000, or $3000O0. The
partners here are Mr.. &. f. Habcht, formerly
and for many years Swedish Consul General IN
New York, and Mr.. Alexander Taylor, well
known New Yorker. Far the larger proportion o
the above stated liability has been incurred on
drafts from the New York house.
1t seems to be now weestablisbed conviction
here that no European house can be injured IN
this catastrophe; that the difficulty Is American
and peculiar to the transactions OF American
houses, ana can only reacn London through the
presence here OF houses that, though nominaliy
London houses, are really the agencies OF Amer.