, 1874-10-05
His Address Before the New York
Chamber Of Commerce,
How Panlcs Arc Caused, and How
They May Do Prevented.
What Banks Are, and Why Bank
Notes Arc Not Money.

o,rio. .,a t,,oir oa,,soa Tho Chamber waa wel)
pA.oo a'u NV, 1,r,,',sT 11o11o ,ho 1ro,, n..;,
represented, william ~ pooso, 'no non' oa'1o
ooorea g. mes, on,rse me " W H. yoryo, Pees - ooopoe e
Nathan Cl,andlcr, Charca Il. Marshall, James s,
n s.sa,,s,,an ana s1mon IN v,aaor heirr on,onr
=. ostnl"u'u' A1 '1s no.,ao :. n,,.;. 'tAes ,.."
thoao present. Mt' Dooso a7 ohalrHan, intro"
ducod Prof. Prico rs ono ~hoho attatnmonts In
tho study Of financial questions wero we'll known,
saving tint an expression OF his yiovs unon tln
.ns.,,odc cr1uo. IN com,norc,ol h,story Womb hs
sh,,oo. 1. w.consd hv to non'har s "'' ~,or
Frico's addrosa Tas long, and was llHeoncd to
with great attention. Ho spoke Ia follows.
THE Address ~
Nm, PRESIDENT AND GENTLEMEN. think
you worry warmly Tor tho honor you haVo dono
mo in asking me to speak to you, aud OK
trcrncly regret Tint MAS not aware that I should
aad Known 't oefoFehana 5hon'd bavo writ
ten ont a lecture which would havo presented
tho question hettor than Gun now. But I shull
feel great pleasure in touching upon tho msin
cailangcd it viii 10 ou1y a front dnljcht to n,e
fhat tho tliifjcnlties urret aranat Il should In
stated. Tho aucutjon ihen fa !. CriaorsS y7bat
a,o er;ses? droat disturbances Of tho monoy-
morkct dinaon1tv or nhfotninr advencos hioj,
rates of dIsconnt rroat firma in danrGr.
trh, ~! .am"J M, aho ;a nn.arnI A's",' 3,,,'
known, vloso money IL aafc, whoso il unsafe
= matter of orent Uncertainty. Jnst a. Il Waa
scon in Enciani in 1sgG. It is = tirno whnn thoac
who nro tho stroneest aro oxposol 10 tho mn,t
ycq In
isCs tlan Il the % arcnt London and Westmnster
1snn1,' I'm }sryest in Enr,and, nna on, nf in
eblest cn,,ducicd. Tho eanar of lilo cr;sia WA
a'y a,nr,ae s;7,;s tbss tbo, xsat hoisa "
rconio whn baI intrustod f,,nffa tn ths tnstttt,.
ton not into whist nay bn caIio,l panlo, to sse
r,,sSnd for tSo,r ronnnv yrrv ,nanv catn,;ma tnn IN
nonnnon vh,c hocs;ns rooro tsh;no, haa, sno
- NnS ,,nreoannnh'n Tbcyo i, noth!n's ,,,,,ro
atirr,no linn alarm vl,ich Ina m defini.o cansn
ltn,, s,na ~ [,n1r .s!,nt ~ .,oas .,an ,,as.t
thnroforo s,,snnrtu onv rnusn of in;acsl,iof ha,
canno K Inn nons tint II eonit1 mt ia f'nrcr
nnon, wa know thu acouies Of Tint t;mo. Nc
know know tint tho greatest firms, especially Old Old
auI% ar r,,cht ror, 1soa aI,aotcv ,nccrtn;n Az g
~ annT M bnyo snrn i, Ennnnd t,,,+ 14,'n IN
fathers Of tho city tic great bankers md wiae
1 otle1r "What ie the cure r. hut q Eano is rS not
casy ourod by eittinr I'll, all niri,t. Boma nonI1
nav from thoir reocpurronco that thev como t,nier
somo physical law; aro periodic visitation iiiio
Lurricano % is W eiyon % BY aomp % AZ law '1a Of 'tna
montv mnrSot You nrs boani, to bn r11inc1 averv
TIM voaras Ton nro not consctous that vou havo
done any wrong, But ii ia simply eroat typbton
rarinr t,nnn a 1rrnk rrmller Of erit tAta n,ipda
Il I this aof Il T iaw 81 bunineas % hat amounts MOUNTS
to phyyieai law? If It in, Il certainty ia
a na.t ' n9tranrd;,aTv nho,none,,on r"' AMI ns
ono which requires very much bigger
R{so1 a tasn tbe sssaffsnss Il PsaS;ss
roedx ~ typhoos ana ~ no
noc.,a' ra}oa II thcy are Tho law Of tho rnonoy-
market you must reduce your sails, stand by
iho loss Of mast or two. But Of iii tbat ho.
Uoyo nothing [ beIieyo tho cause Of these rnn-
les can be stated and when you know tho dan
ger and The cause likely to disturb vol, oar, take
of tIo losa nlone Which constitllteg 81 cris}s'
pSsTuuoTIoS AIoSS Nor Tns osusEs
A bad harvest in England is loss Of ESQ G5o-
900; that is, in such |. case you have rot 10 b,1y
over You hsyo sown WV Won " basn A ti3'e iTea9
you haYo nut tho mapuro on tho
land, but tha August rain comes
in, tlle corn is not mnf1lrcd. nnff yo,t
havn got TO live. SO you nust bny II from tho
ciai agony. It is dead losu: a calamity aomo
timoH bigger than q calamity iu tho monoy-mar-
lot. But it doeB not generate fuancial ntorno.
Then BID ID war a VIZ j. tho %Sss destructive
mon to destroy they destroy food. clothnr
irop, ships. Nothing destroys iIe 1aar. il Il
tle most uneoonomicat thing on earth. but Il.
war docs not necessarily prcauco panic. It is
q Iurr!caao ID London. Very ucll. heain
tako q cotton famine in England. Il wua ter.
rife loss Of n,onoy, Wcalth In thoao districte
was paralyzod bocauua Amorica Lad no cotton
Tho poor mon had no wagcs ali tIat
vast apparatus Of capital was earn
inn noth1ur consuming buyinc. bnt uot
selling. Buf tharo was no panic. That
vonr il not enumerated as oue Of Storm. rhoro.
fora va ionk cot. bY mo,o destruction alone.
into reign Of panic T4cn again. auothor
curious thing. Tho tvDhoon las tiiig Character:
tLat II yhips IN tic water torrbyiu q particular
rnos, hut thp neichboring waters arc dead cnln.
At t.o time ia Gt}' in ". aud Other tmea. when
Observation-Disclosures woro al 20. whom poonlo couI
not cet ndYancos on tho best securities, when
tAo bnnk had to say, ~ can't" all this ti!no tlo
market for ndyancin. money on agriculture. to
rnires ani rnuntry Tenklenien wae an that tfev
canld get all they wanted at ner cent. That is
absolutely hlstorical Therefore these couvul-
souB hayc romcthiug yory peculiar about thotn.
Tlo real fury of the storm in its national i'm
portauco u distinction to ipdiyiduas, is its bear
ing upon bnnks, upon dscounts. It il not 10
~. -. Ii...,.1 1I~A l.. III