New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-09-19
THE CRISIS IN WASHINGTON.

THE CRISIS IN WASHINGTON.
THE SUSPENSION ANNOUNCED Al NOON OF THE
FIRST NATIONAL BANK AND OF THE BRANCH
HOUSE OF JAY COOKE 4 Goa LARGE NUMBER
OF DEPOsIToRs NEUTRALITY-SUSPICIOUS. RICHARD
son DECLARES THE GOVERNMENT LOSES MOTH
EG-HIs EXPLANATION OF THE SYNDICATE.
Br TELEGRAPH THE ,rRBUSE.i
WASHINGTON, Sept. 1S.-The report Of the suspen-
sion OF the houses of Jay Cooke d CO., III Phiadel-
phla and New-YOrk, were in circulation here more
than half an hour before the doors of their bank IN
this city were closed to the public. The news first
came in the form of report that was very vague
and so worded as to excite suspicion that there was
a fearful crash in the stock market in New-York,
and that heavy panic was threat
ened. This was accompanied by the report
that Jay Cookies banks in Philadelphia and New
York had suspended payment. SO substantial was
the house i'll this city regarded by such of the de-
positOrs had early information of the facts that
no run whatever was made upon it, and for nearly
an hour after the first report came there were no
unusual about the counter and deposits were
made and checks drawn as usual. At about quar-
ter past twelve, however, when the counter as
is usual at that hour of the day, was
thronged with depositors and others and just after
n check of larger amount had been paid we'll
known gentleman presented his check for 800. A
few words passed between the teller and persons
behind the counter, and then the gentleman was in
formed that bis check could not be paid to-day, il
had been decided to suspend pay ment The room.
which is very large and convenient was then cleared
and the heavy doors were shut against the public.
1t did not take long for the crowd to gather, for
little note reading as follows, hastily placed IN
the window:
SEPTEMBER IS, 1873
Tn he NJ TaV Cook AZ n
in New-York and Philadelphia, We have concluded to
close doors until we hear further from them.
Not 10 minutes afterward, the doors leading to the
First National Bank, in the same building and di-
rectly the banking house, were also closely shut,
and this slip was displayed above the knob
The First National Bank OF Washington has found it
necessary TO suspend business to-day.
II. e. SWAIN, Cashier.
The first inquiry Of those who thus made
acquainted with the unfortunate facts, was of course
to ascertain the of the suspension OF these four
mOneyed institutions, among the heaviest IN the
country The more intellig gent portion of the crowd
knew OF thought they knew, that for long time
the firm of Jay Cooke 81 Co. had been sorely OPP
pressed with the securities of the Northern Pacific
Railroad and that they were carrying
more of them than they could afford
to do with the fast accumuating gold
interest ana ~ was not long III WIS
known that the Northern Pacific had been the ruin
of the firm. The crowd was very large in front OF
the bank all day, and of course there was great
anxiety and interest felt on all sides. There was
boisterous conduct and no denunciatiOn there was
a much better feeling apparent than could have
been expected The house has stood so high here,
and has been so popular with all classes from the
highest Government officer and capitalist down 10
the poorest mechanic. that few thought that the
suspension would be final and permanent. and even
tonight when there is little hope IN the minds OF
the people, it is very hard for the depostors TO be-
lieve that they will not be paid their money.
III the absence of information as to the amount OF
the failure the direct cause, &c. there have been
the widest conjectures made as to the result and ITS
effect. The two institutions-Jay Cooke ~ Co. ana
the First National Bankdid the largest business OF
anv banks in Washington. and ranked among the
heaviest in the country, and their deposits have
been very large those of the First National exceed
ing by hundreds of thousands those OF any lnstltu-
ton in the city or vicinity. Should the sus-
pension be final, and 10 such an extent
that depositors would lose their balances 1t Will &C
casion serious consequences i'll tins city and the
South for many of the small Southern banks, and
indeed many of the Northern banks had deposits
with the First National which, in the aggregate,
tonight by all who speak of the matter, that the
| failure of Jay Cooke q Co. was due to
| the large interest account behalf of
| the Northern Pacific Railroad, and that the
First National went down because of its heavy adj
vances to the houses in Philadelphia and New-fork
| The principal amount of the stock of the bank rs
owned by the Cookies, and Henry ID. Cooke, the head
of the Washington branch Of the Jay Cooke firm,
was the President of the bank and it was generally
known that to all intents and purposes the two
| houses were the same.
IL was thought at first that the Government would
be heavy loser, and Secretary Richardson was be-
set by very eager crowd Of reporters to ascertain
| how much of Government money was in the hands
| of the bankers 1.-The Government" said Mr. Rich
ardson will not lose dollar even if the failure is
complete Jay Cooke has not dollar of Government
money in his possession"
| Has he no bonds y was asked.
| HE may have bonds replied the Secretary;
Z" but he had to buy them and pay for them We do
not give bonds TO people, nor lend them unless they
| are paid for"
Has he none of the bonds of the Syndicate placed
| in his hands to SELL"
Not dollars worth said the Secretary warmly.
| 1.-The people do not seem to understand IL; the
Syndicate have the selling Of the bonds; they open
| subscriptions, and when they sell bond or have
market for it they come to the Treasury and pay the
money for it. No bonds are given TO the Syndicate
until their equivalent in money has been delivered
to the Treasury The bonds are sold under the reg
nlaons of acommittee composed of persons selected
by the firms composing the Syndicate from their
| own number, the amount of bonds disposed OF
since last March being about $60,OO0,Oc0.'
Then there can be no discrepancies on behalf OF
the COokes'p
"On the contrary replied the Secretary, the
| Treasury really is ahead. The Cookies have depos