The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1881-08-12
IMr.Senn Thsmpson, 81 New 1S-s' -' "
T1naisciai Paniess Their Causes """
ssegsodyent Return.

-T,Ss i,c,aY PanieS. Their Causes ana
Perfodieni Retnrm. ~.
The following IS from the speech OF Mr'
.Iohn Thompson. os New YORK, before .ne
BANKERS, Convention ct Niagara Weuues'
day: a.. a.tod when
wII, this great prosperity end, or when WIZ
aoother panic sweep over The country .ua'
!, hscomes rot only interesting, but aoso-
tntslv IN our safety, TO yet the best ldeas
nossIhle and 10 analyze the signs OF APP
nroachino danger. Panics do occur ABOUT
every decade, This ten.year period Is qul'e
natnraI. II takes about five years ai'er
reyulsion 10 paw up, compromise. OF WIPE
ont indebtedpess. Then follows I'VE years
~ nrosperity, expansion, confidence III
credits--in fact, " BOOM" Inc hsl
manic Was In 1873; the present pros
neritv commenced in 1878. We have now
had three wears OF extraordinary ahgmenta.
tion Of riches, much OF II real soIu' uut
most of Il emanating from raising prices OF
uniting no quotations. The signs OF an
lanproaching "bliZzard" are numerous, Du'
very delicate as yet. AT present tnere !
bu, one alarming indication OF trouble anu
that is 10 the number aud magnitude Oh ne"
en,ernrIses. involving the issue OF millions
for half OF 1873. this same sign OF coming
trouble was apparent, but TO fract'onaI
extent as compared with the present. AS
mis- is purely a convention Of bankers, and
as am probably the Oldest member OF the
Association, | must be excused In utterIng
word Of caution TO bank managers, more
particularly TO those at the head OF deposit
hanks. We are positively going TOO last,
and il Is the part Of wisdom, and l con-
ceiye Il 10 be our duty, 10 put on the
brakes" that the wreck when 1t does come
NAV be the less disastrous. | instance an
| item OF the panic OF 1878. Early one morn
inc the active managers OF three OF the New
York CITY banks were invited to the once
of Jaw Cooke 4 Co. We were Informed thlt
one million OF dollars were necessary by ~
| o'clock TO save that house from protest
What security do you offer! was asked
| Answer: None; our securities are all useu.
n Is needless to say that the million was uoI
forthcoming. We left. In fifteen minutes
Wall street was in panic. Ana tDls IS
only n duplicate OF what transDired IN 1896
when the OHIO Insurance and Trust Com
many susDepded. | will not elaborate the
nro0rpss and results OF those panlcs, Tor
YOU are all conyers mt with what transpired
in and following 1873 Sufficient to say
that houses Of undoubted standing were
unable to rgeet their engagements and tue
New York city banks, after one startling
failure Uhe Commonwealth, were saved
from suspension OF even currency pay
ments by lodging with a Clearing House
committee securities and taking certificates
that were good only at the Clearing
House for debtor balances. The banks
then, to a great extent, declined c!s9
or currency payments, but ceftined
checks and drafts "goOd through the
q" Clearing. House." This was certainly
untoue financial measure, but it saved the
banks from an Out-and-out suspension OF
even currency payments. Specie was then
out OF the category Of money. | refer 10
these historical events to show that panicS
do burst upon us without warning, and
panics culminate in revulsOns OF some hve
years duration. / am not prOphesYlng
evil. 50 do not stone me. | am only rug
ing the bell to awaken the brakeman, for
unless we "slow up" and guard our assets
nothing in the past will compare with what
i, il the future. The egOtatlons-the
issue OF stocks and bonds-are fourfold
what they were in 1873.