The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-09-26

losses 70 the extent OF $780, oO0 0OU, snrinKago
In values In the United States and Canada being
estimated at s2o4, 100000 In an article reviewing
the causes and results OF the great crisis OF that
famous year 1851, the HERALD thus summarizes
From the NEW YORK HERALD, Jan: 20, 1851
By scrutlnizing the chlet causes OF failures ana
about by the extraordinary expansion OF the
credit system and imitation OF prices induced by
corporations OF the Old and New World. when q
barrel OF pork was pushed up to S24 per barrel,
soaa 70 go pc. barrel wheat 70 ~ per c onsse
l2c. and Ice. per pound, and the revulsion came,
the spectators mad TO let 60 because the banks
found themselves unable any longer to sustain
them. rnL
the trading public had for some time based its
credit upon the prevailing nigh prices OF produce
and merchandise. Bills had been made and notes
gwen at ninety DAYS 70 six months. preuicated
upon the prevailing high prices OF produce. noted
ABOVE. Hence when the breakdown occurred III the
arti1cially inflated prices made more stringent and
severe by It's suddenness, bankruptcies followed on
every side. . Each succeeding panic but
EXHIBITS the recuperatve energies OF the United
states states; The late reyulsion was inevitable;
tne lnnation OF prices had been forced
sustained without running consumers. The reaction
was necessary to restore trade and commerce to
t their healthy and legitimate channels. to bring
aDout greater equality between the value OF la
Dor and the value OF products to be given in ex-
cnange f0r IT, and Tree them rom the disturbing in
nuence Of the unnatural expansion OF credit fos-
tered by banks and other Corporations, to which
sne guarantees OF States counties and towns had
Each panic has resulted in making the city OF
New York the centre OF finance and OF trade for
this ConSinent In 1887 1t stood on sort OF strug-
The revulsion OF that period decided it's posi-
ton and gave 1T an advance over them, which
1t has not only maintained, but has increased
ever since. The rivalry between New York and
other cities on this continent has ceased The late
struggle OF 1857 was In great degree between
New YORK and London, and has terminated to the
advantage OF the former city, and the time must
ere long arrive when New York and not London
Will become the financial centre, not only OF the
New World but to q great extent also or the Old
World.
While there is much instruction in this resurrec-
ton OF dead past and some points Of simlftude In
the general consequences produced in 1887 and 1857
with those now current, there is more OF encOur.
agement and confidence IN comparing the different
conditions existing in this year OF grace 1879. this
latest historic epoch In the world OF finance. In
1887 we were dependent upon Europe Tor our sup
ply OF breadstuifs now Europe looks to ua
for both breadstufs, and, In spite OF all expert
ments full supply Of cotton IN 1887 we n nad
dividual corporations elastic, 1t Is true but too
much so for the security 1t offered as permitting
country, gold, being locked up in the vaults OF the
Treasury as surplus revenue. What wonder the
infant giant grew weak and staggered under such
o regimen. In 1857 the same EVIL OF an unlimited
paper circulation upon limited gold basis brought
about q crash IN commercial values over-stimu.
were unable to redeem. Europe shared in this re.
vulsiOn through excessive speculation, and In
reality suffered more than our new country.
How changed all this now Our currency
(S7O0 ,0Oo uniformly resting upon the credit Of
the country. one-hal in direct legal tender notes
OF the United States, the other half national bank
notes, secured by the deposit in the United States
Treasury of bonds Of the United States, the prop.
erty OF the banks In the matter OF breadstufs and
cotton we control the markets Of Europe owing to
the short crop there Our imports and exports Tor
the last year show gradual reverse movement In
trade, the former being below ana the latter ABOVE
the respective amounts OF the previous year. Iron
is just entering into our commerce as an article OF
export inspiring full expectation that 1t Will ere
long turn this balance in our favor. Such are some
OF the great results we have achieved since 1857,
and in the experience OF the past week, an expe.
rience that has also its lesson for US, we lind how
much we have gained, and, while stimulated TO go
forward and complete the work OF bringing con-
fdence into monetary dealings, which we lost
when we substituted the complete security Of the
national credit Tor that Of mere local corporations.
we may be proud OF the record, that In all this
great revusiOn in Wall street, there has not been
one banking or commercial failure caused by In
sOlvency. The banks, instead OF precipitatlng dis
aster as in former periods OF financial distress.
have stood firmly in the breach occasiOned by the
smasn-up vi some weak railroad enterprises.