The New York herald., 1875-09-13
FINANCIAL and COMMERCIAL.
The Business Aspect The True Causes
of Commercial Distress.
EVENTS OF THE WEEK.
Review Of the Gold, Stock and
Bond Markets.
WALL STREET,

With the exception OF two failures, the move
ment In Erie and the rise Of gold, the events oil the
past week in financial circles were unimportant Busi-
gives additional signs of Improvement although
Il is said cheerful tone prevails and stocks OF
goods gradually finding their way into the channels
Of distribution. In Boston the effect of depression is
severely felt in all of her manufacturing industries In
Philadelphia trade is only moderately active
lerialy lower basis. Advices from Baltimore report
That the recent excitement by the failures OF
Stirling, Ahrens Co. and OF the Calvert refinery is
last subsiding and Notwithstanding the figures repre-
Ienng the liabilities are large, it is not believed
that the disaster will materially affect any OF the
mercantile houses financial institutions. Western
states that the weather that section has been
favorable for the maturing and harvesting Of the crops
and has improved the and cotton prospects
From
FRANCISCO
learn that quiet has been there restored. The Mer
chants Exchange Bank has resumed, and the National
Gold Bank and Trust Company reported to be settling
with its depositors and carrying business informally
but the Bank OF California apparently is in Sat quo
Nine new mining companies are said to nave been
organized in San Francisco since the failure with n
total capital Of $7s 700 900. AS has been truly said
'rhe rapidity of the recovery from the shock of the
failure is not only disappointment to the naonists
who too hasty TO the occurrence test
California finances, and the fact that although gold
basis may be disturbed II readJusts itself speedily
Than a paper one does" Indeed confidence might
everywhere be revived at early day if it not
for the efforts of the public and that portion OF
the press who have undertaken to establish one Of
GREATEST PALACES
presented TO the people In the language of
speech by General Garfield, delivered few days ago.
at is ccnspicuousy untrue that the present distress
caused by contraction OF the currency for the
lime when the crash came in September 1873, there
currency in circulation than at any time for
several years previous. that time the greenbacks
fractional currency and national bank outsand-
ing amounted to $40, 600 o0o This twice much
the higlSst amount pushed into circulation at
my time previous to the A further proof
that the crisis caused by lack of circulation
the fact that by the of June 1870 the banks
allowed an increase of currency TO the amount of
$54, 600. This amount would certainly have been
issued had there been a real demand for it, But when
the crisis in 1878 only about half that had
been issued. The business Of the country had not
raed for it.
at is the invarabe lesson of history that great
ofpaper money disturbs values promotes specu
laton and overrading hastens crisis aggravates
its effects In the three years which preceded the great
crash Of 1887 the bank circulation
nearly fifty per cent 1t from $95 O00 900 in 1884
10 s149 900 in 1891 In 1857 the volume currency
had been expanded the highest point it had ever
reached and when the crash of that year there
$215 600 900 in circulation, which after col
'apsed to S135 900, OOO All this
DERANGEMENT INDUSTRY
may be produced by great and sudden increase of
soin. Witness the remarkable crisis from which Prus-
Iia is suffering. AS the result of her late she
received from France the enormous indemnity of
OaO OO1nn nnnt.
he period of two years and half with such vast re-
jources the government commenced the build
ing of extensive public works and thus stimu-
lated to unusual degree many branches
Of industry. The people followed the example OF the
government, and over-production, over-trading and
speculation the order OF the day, until crash
came the Prussia has suffered for half century
An able Prussan writer has lately said it would have
been better for the German people If not dollar had
been paid by France
DISASTER"
ays Mr.. Garfield, ''were that converted floating
capital fixed forms faster than financial health
allowed We lent the deposits of our banks for perma
ncnt works We built railroads at the rate of 1000
miles u year. Our furnaces and mills were pushed to
their utmost capacity Capitalists rushed business
the rising tide of prosperity New furnaces and mills
we're built in all directions The capacity of old ones
increased 1t long before the markets were
gutted, but still the work went Mill owners used
up their surplus earnings in pushing on the work.
and then drew the future A superficial observer
would have pronounced this the happy rally of prosper
pus industry. He would have pointed to the neat and
comfortable homes of miners and mill hands to the
great activity of capital and labor But every day wit
messed the destruction of capital the accumulated
lngs Of previous years Every of iron thus forced
upon overstocked market reducing the value of
ihot oIo or al hod
wasted in starting railroads that could be COM
peted and in completing others that could only be
Rt loss. Seven millions of dollars sunk Of
sight amid the and deserts of the Northern Pa
clc Railroad"
Facts like these require comment.
STOCK MARKET.
The principal points of interest here were in connec-
ton with Western Union and Ere-the first having
declared quarterly dividend of two per cent payable
the 18th of October, and the latter having sent
abroad in comfortable frame Of mind the committee of
English bondhoders who recently made flying tour
the road 1t is said that these gentlemen ex-
pressed willingness to accept for their bonds the
AMOUNT originally paid for the If this arrange
nicnt be effected there will be reorganization of
The company equitable basis the receivership
will be vacated and about $50 0O0 900 be saved Ger
ainy II would prevent foreclosure Sir Edward Wat
kin insisting the reorganization OF the Board,
Messrs Barlow and Marshall o. Roberts retired and
!heir places filled by Messrs Brown, OF
Portland, and Welsh, Of Philadelphia 1t is
alleged that this action necessary from the
fact that Mr. Jewett's had been unpcasantly
complicated with speculative transactions prior
to his appointment The President Of Erie,
like Cpssr's wife, felt that he should be above suspi-
cion and accordingly took the step described, which
puts the road IN harmony with Its English owners.
rrcp papitW W
has assumed new phase, the nglo-American cable
having taken the initiative by reducing the rates TO
Ihng word. 1t said that this reduction does
Ifcct the land lines to Nova Scotia SO that if loss
Ihould be entaed it will fall entirely upon the ocean
cable. One of the principal officers Of the Western
Union claims that "they will be able to starve out all
competition even at the lower rates." but IT would be