The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1884-06-18
Gasetto's New York Letter.
THE PANIC.

conspicuous feature of the display headlines in
the newspapers
We have, in truth, had panic but not the
variety which shook the commercial community in
1873. The panic has, properly speaking been
confined 10 Wall street. and except in SO far as
temporarily higher rates for money could act (for
two days severe stringency here) and in causing
renewed caution on the part of buyers generally
throughout the country, has IN no way reflected
in the legitimate mercantile world. In 1873 there
was a sudden and, TO almost everyone, une1-
pected shrinkage III the prices of staples of all
kinds. This of course, showed a like effect at once
in quotations in speculative lines, and genuine
panic was the result, Ever since the midsummer
of 1881 the prices of commodities have been under
going gradual decline In price. Liquidation has
in this been accomplished in trade circles by a
more natural and healthful action.
NO PANIC IN COMMERCIAL LINES.
There was therefore no room for panic in COM
mercial lines, for interior buyers had long since
been taking from jobbers and manufacturers for
consumption only, mad not been anticipating their
wants 10 any great extent, and had therefore been
skirting along the coast of trade convenient to
safe harbor at the first sign of blow. Wheat at
Chicago is 20 per cent cheaper than it
year ago, and flour nearly as much Cotton goods
are greatly reduced in price, in part owing to the
current setting way and largely on account of the
great increase in new mills East and particularly
in the South. Wool too0has declined in value,
and at present rests dull IN the face of of the IN
coming clip. Nearly one half the woolen machin-
ery in the country is idle. and the Associated New
England cotton goods mills an running on re-
duced time, with a number Of the'r smut Gown.
anthracite fus.aces, of which GO per cent are idle.
pc iTun is 20 per cent cheaper than it was two
years ago for best grades Inferior grades are for
cash, between % and 30 per cent cheaper than
three years ago. Consumption of iron has been
curtaied by the sharp restriction on railway ex-
tension, which in 1883 amounted to something over
5000 mills, as compared with II 900 mills in
1882. To-day furnaces are working on orders only,
are pilng no iron, and preparing when 4 new
demand does come, TO take every legitimate adj
vantage of 1t.
The price Of sugar, raw and refined, has gone off
fully % per cent since the LIST of May, 1888, and
to-day the market is quoted dull. The under-esti-
mating of the European crop of beet-root sugar Is
supposed to- be largely responsible for this Stocks
at New York and London are still far III excess of
those at the like period IN 1888. The most encour-
aging views as TO higher prices however, based
the fact that this years losses will discourage
planters in the Philippines, West Indies and the
beet-sugar men in Europe from producing as
heavily as last year, and that existing low prices
will greatly increase consumption. Coffee, too
has had severe fall, and the Brazilian syndicate
who began year ago an attempt TO practically
corner the coffee market, have failed, and sunk
ten million dollars,
Effect OF suETNKAGE.
All this shrink8ge, then, with that attendant in
collateral branches of trade and industry, has
placed the commercial community where panic
practically impossible. Credits are not so eN
tended, heavy stocks are not the rule and these
facts alone withdraw the fuel essential to a gem
uine panic, which may be described as simply a
loss of confidence in the ability of the trade to
meet its engagements and consequent rush upon
all creditors, thus causing solvent firms to fail.
WALL STREET.
Wall street, however, had not been so successful
in treating itself heroically TO prevent crash.
10 be sure the shrnkage IN tle price OF stocks
had been going on for nearly three years, but the
process had been delayed and throtted and held
back at every possible turn by little crowd of So
"a nlfstg oft he nifty
and of "the street" who after every fresh drop,
would announce oracularly that "the bottom had
now been reached and give orders to their friends
on the board to buy. In this way, through pools
and combinations, they time and again checked a
natural leak of the water" IN stocks and finally
succeeded in loading themselves up very heavily
with their favorite securities. Frequently their
example was followed by host of small buyers
and by their friends and others-to their ultimate
, cost 1t seems strange too, that these men, cap
italiss business men OF experience, many of them,
had not wit enough TO understand that Wall street
cannot find BOOM or advance in the prices of its
securities until the Legitimate business OF the
country itself takes upward turn, until the new
business reflects itself in the earnings of the rail
way telegraph and other corporations whose stocks
are listed and until the great body of traders at
large have begun to realize more profitable busl-
ness for il is out of the surplus earnings of the
country that Wall street thrives. When the peo-
pie are poor or practcing economy, as at present,
stocks must and will show 1t, and he who starts a
boom at such a time will have to swallow it unless
he be shrewd enough to unload his holdings upon
his dupes.
GRANT AND WARD.
In this way Wall street prices had been clogged
in their natural path down hill, on the trail OF
prices of staple commodities, and unfortunately,
swindlers peJ. Sc had made their nests side by side
with bankers and brokers who did not wear the
borrowed plumape of honored names to shield
them Grant and Ward came to the end of thelr
rome suppose | should say Ward did, for every
BODY appears inclined to intimate that Grant was
the fool and Ward the knaye. Fish of the Marine
Bank is hand-in-glove with Ward, and Fish was
practically the Marine Bank. at least far as his
conduct Of the banks affairs was concerned; dhe
bank had had good name. The city had $1,000
900 there. A good many of the heavy sugar rehn-
ing firms deposited there. Its fall, with the news
that Wards operations amounted simply to get
ting the oredulous 10 invest large sums for his
promise of 10 per cent per month profits in mys
FERROUS au1 unexplained Government contracts
which il is now known had no existance-thest
facts say startled Wall street, for it was known
that many in high places had been captured by the
Grant q Ward bait. Grant, as you may see fig
ured, unwittingly of course, as copper in a
swindling game-one on par with "bunko' Wher
the heavy embezzlement of three or four mil
lions (7l from the Second National Bank by it:
presi0srt. Jno. c. Emo, followed, the banks be
stricken. The Second Rational Bank had beer
the soundest bank uptown. 10 presidents fathel
and others interested, advanced tue NECESSARY
funds and il withstood a run, but the emineutly
respectable Metropolitan Band had to close ii,
doors, as its clearing house balance was not mad
good.
IN DEAD EARNEST.
Then the panic began in dead earnest. Tn,
President of the Metropolitan was Mr. George /
Seney. q well known railroad promoter. II wa
this fact-that Mr. Seney Speculative banl
president'-which heightened the effects of tn,
shock. How many more banks were TO follow sui
owing TO having energetic, excessively 'enterpris
ing and Speculative" presidents? That da,
seven stock brokerage houses announced thei
inability to meet their contracts, in some instance
owing to the unwillingness of the banks TO maxi
loans at all the kind of stock collateral the,
had to offer. The banks belonging to the clearing
house got together and took measures for self
protection; each was to aid the other in case of
run In this way they were, OF course, enabled t,
resist any attack which would in any likelihood b
made. They also made arrangements to have thl
Metropolitan continue, which it has since done
The suspension of Donnell Lawson d Simpson
private bank. acting as New York correspondent
for over 400 country banks was due to panic OF
the part of its executive. 1t need not have hap
pened at all 1t had million deposited with tn
Metropolitau After the latter closed its doors
check drawn by d., l.. q S. for 5000 on the Met