The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1873-09-24
Financial Lessons - The History o
Money Paniss In America.
From the New York Hera


The financial lessons of the past
should not be without interest at the
present juncture. Wcpropose to recite
Il bit of history. The first real impulse
to speculation in this country followed
the war of 1872 when the government
issued $lG,000,000 of Treasury notes,
and placed loans amounting to $780,
600. 0OO In 1916 there were 2O8 banks,
with capital of So, 100000. When
the peace of Utrecht was declared,
these began to fail, and in n few
months 1900, 900 was swept out of
existence.
The New York Stock Exchange was
created in 1877, and in 1925 the coun-
try witnessed the first mad fever of
speculation. People began to do bust.
ness on margins" even then, and
the temptation to purchase certificates
of shares with but small payment
only intensified the disease.
A water works company, iorinstancc
was authorized to hold $2,OO0,0O0 of
capital; $l0,000000 we've subscribed,
The Morris Canal and banking Com
pany, whose capital was fixed mt ST.
00O, 900, had $40, 900, 600 of subscriptions.
There were 624 new joint stock com
panies organized in Great Britain
between 1921 and 1925. They distribu-
ted immense dividends and thus stimu-
lated speculation on our side OF the
Atlantic. Corporations in New York
and Philadelphia followed sJit, paying
s. 10 and Is per cent sem,-annually.
Then the railroad movement began
and was helped on by States until
securities" were counted by millions.
In the year 1888 there were of bonds
$50, OOO,000 for banks, $40, COCOON for
railroads, $50 zoo, 900 for canalsand go.
0OO, 600 representing miscellaneous and
more local projects. These bonds
chiefly concentrated in the New York
stock exchange.
True, New York to-day does two
hundred times more business than was
done then, but country and capital
have increased in proportion. Reac-
tion set in as early as 1894. The
market became stringent during that
year. and bank loans rose rom lorty-
seven to sixty millions of dollars.
Money continued to harden. Banks
and brokers failed right and left;
Defalcatjons came to sudden light, and
sleepy directors were not unfreqnently,
then as now, amazed ut the discovery
of false entries on their books. Speci-
lation, however, continued to run riot
aIi over the country. Mons,cr swim
dies showed their heads everywhere.
Government agents sold SAC, 0GD, opO OF
public lands in about year, deposited
the proceeds IN lotal f. uanNI I, ur r nnfi
were loaleu GUY GUY o e was for those
the mllalioh "a s sreu,I "' " ~
times something ,sa aan,, nh. horvest
flnaily me cfMsn .an S,,oa, Gould NOT
OF 1880 iaiieu. ny p,ou .oior Gould Gould NOT
pay the retailer the ie,aiiGi SHo' w n0s
settle with the Joppe. tie JunwJ,th tio
unable to meet MS opiiSa!ion1 WIZ W.,
importer, ana every linS III 'ne , uiaaa
OF trade was broken anu ou. vi pay,
The real estate bubble uissolVeu III VIII ,ni,
air, and few months saw we mes'
insolvent. inc losses ahi1ul''eu rh w
hundreds OF nlilllohs vi uolia
consequences ..eStehueu eteiS Imeao'
Sixteen banks dropped on. oi e ~, o"n no1
sinking as tney Went uoT IT, 'i thair set.
ana tne creui,ors iea an,,. on thn dolIor
tiemehls ao9u. olii oe' a w. tho ' nro of mn.
stay laws loiioWeu, aiiu en-. Wv s sao, vi i
per currency anu new S.",e 1 ,n,ents hy
Inc resumption W sptIis pa3 iha,, ~
the New iprk 3pnhs si in w. pmnk
Hse nll,iiol uoiiu ,,s, ,n"i iu,or and Vie
OF Ehgiuiiu wv ye'ia i"i os tbe
Pioeess ", Ie. wbSck we I have not now
80 do,I
" W atai have o,nr,y reco,,ed some of the
tton..n,t S"t R.d "n ~ the nonio of
To- nHEs,r tbot ttbma nnbIic NAV