The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1884-06-27
The Panic Of 1857.

eign European markets 1t was phe-
nOmenal, also, in its suddenness, and in
finding the business of the country to
tally unprepared for it. 1t appears that
up to August of that year our CONNER
cial affairs were generally prosperous.
The local journals throughout the coun-
try represented business as in healthy
condition. High prices were said to
have enriched the farmer, the stock
raiser and the planter. Trade and me-
chanical industry Hourished with cor
responding success. I'm estimating
probabilities for the future" says j. S.
Gibbons, in his account of that event,
"srcat stress was laid on the fact that
the madness of railroad building was
arrested. The bond market, and with
il Improvement securities generally,
had fallen into disrepute. Stock COM
panies could no longer send an agent
to Europe with five millions of credit
tokens, and receive the money for them
within sixty days from the engraver's
press. Heavy financial negotiations in
this direction We're suspended, and, al
though the country had several hundred
millions of foreign capital to use, there
was no danger OF any considerable por-
ton of it being recalled. since our home
market would reject the bonds which
represented it at half the par cost. We
might therefore, continue to enjoy the
use of this large capital, and avoid the
disaster conse Iuent on a further accu-
mutation of foreign debt. The common
sentiment was that we had passed the
dangerous point in railway credits, and
with the immense productions of the
year at our doors, there was little prob
ability Of serious financial disturbance
The most sagacious of our city bank
officers saw no indications of an I'M
usual storm in the commercial skies.
When the loans reached the unprece-
dented height of sl22, 900, 600 on the Sth
of August, they pointed to the annual
reduction of $1,000, 900 or $l2, 600, 900
in the autumn months, as one of the
regular GIBBS to which the market was
subject; but they had no foresight of
extraordinary pressure, and no dreams
of panic. Credit was extended, but
1.-The country never was as rich"
But this storm was coming. On the
sth of August the banks began to con-
tract their loans, and, as consequence.
securities began to fall in price at the
New York stock Board. The failure
of heavy produce house was explained
by the depression of that particular in
terest in the market. A report of dis
honest jobbing, and the misuse of funds
by leading railway company, caused
partial excitement. but did not serious
ly disturb confidence in mercantile
| credit The immediate cause Of the
panic, however, was the suspension of
the Chic Life Insurance & Trust Com
pany on August ~. 1t came like a
lightning stroke from an almost clear
sky. An Intense excitement was mani
tested in all financial circles, in which
| bank officers, says Gibbons, participated
with unusual sensitiveness and want of
self possession. Flying rumors were
exaggerated at every corner. The hold
ers of stock and commercial paper hur-
ried to the broker, and were eager to
make what week before they would
haze stunned a ruinous sacrifice.
Several stock and money brokers failed,
and the daily meetings of the New
York and Boston Brokers' Boards-the
former. especially-were characterized
by intense excitement. Every individ-
ual misfortune was announced on the
news bulletins in large letters, and at
tracted curious crowds, which were fed
from the passing throngs-the New
York Clearing house report for the 18th
of Augustine first after the suspen-
sion of the Chic Life Insurance Il Trust
Company-showeda reduction of 81
600, 900 in the bank loans If the previ.
Gus week. The most substantial secur-
tiles OF the market fell rapidly in price
at public sale. The safety of bank
notes in circulation was suspected or
denied. The publishers of the counter
feit-detectors spread alarm among the
shopkeepers and workingmen, by sell
ing hand bills with lists of broken
banks, which were cried in the streets
by boys "a penny apiece" One of the
New York associated banks fell
into default at the end of
August, and a fraud of
$4,000 by the paying teller reused sus-
picion of similar misconduct in other
institutions. The regular discount of
bills by the banks had mostly been sus-
pended, and the street rates for money,
even on UNREASONABLE securities, rose
to three. four, and even five per cent. q
month. On the ordinary security of
merchants-such as promisOry notes
and bills of exchange money was not
TO be had at any rate. House after
house of high commercial repute sue
cumbed to the panic, and several heavy
banking firms were added to the list OF
failures. The settlements of the clear
ing-house in New York were watched
with the expectation of new defaults,
and their successful accomplishment,
each day, was a sub, ect of mutual con-
graduation among the bank officers.
The statement of the New York city
banks for the week ending September
), showed further reduction in loans
of more than x4,0CO,0OO. Commercial
embarrassments and suspensions be-
came the chief staple of news in all the
papers of town and country. The pur-
chase and transportation of produce al
most entirely ceased. From this period
there was nothing lacking to aggravate
common distress for money. The fail
ure of the Bank of Pennsylvania, in
Philadelphia, was followed by that OF
the other banks of that city. and those
of Baltimore and the Southern Atlantic !
States generally. Commercial business
everywhere was suspended. The ava
lanche of discredit swept down mer. |
chants, bankers, moneyed corporations,
and manufacturing companies without
distinction. Old houses, of aecumu-
lated capital, which had withstood the |
violence of al former panics, were pros
trated in a day, and when they believed
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