Evening capital. (Annapolis, Md.) 1884-1910, 1884-06-26
PANTCs OF THE PAST.
A History Of the Financial Convul-
sions of 1857 and 1873.


materially affected foreign European
markets. 1t was phenomenal, also, in
its suddenness, and in finding the busl-
ness of the country totally unprcpared for
it, 1t appears that up TO August OF that
year our commercial affairs were gener-
ally prosperous. The local journals
throughout the country represented bust
ness as in a healthy condition. High
prices were said to have enriched the.
farmer, the stock raiser, and the planter.
Trade and mechanical industry fiourished
with corresponding success.
But the storm was coming. On the
9Th of August the banks began to con
tract their loans, and, as a consequence,
securities Immediately began to fall in
price at the New York stock board The
failure of heavy produce house was ex-
planned by the depression Of that partic-
ular interest in the market A report of
dishonest jobbing, and the misuse of
funds by a leading railway company,
caused partial excitement, but did not
seriously disturb confidence in mercantile
credit. The immediate cause of the panic,
however, was the suspension of the Ohio
Life Insurance and Trust company on
August "a. 1t came like a lightning
tense excitement was manifested in all
financial circles, in which bank officers
says Gibbons, participated with un-
usual sensitiveness and want of self
possession. Flying rumors were
exaggerated at every corner. The
holders Of stock and of CONNER
cial paper hurried to the broker, and
were eager to make what week before
they would have Stunned as 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 individual mis-
fortune was announced on the news bull
letin In large letters, and attracted curl
Gus crowds, which were fed by the pass
ing throngs The New York clearing
house report for August 29-the first after
the suspension of the Ohio Life Insurance
and Trust com pany-showed a reduction
of $4,000,000 in the bank loans during
the previous week The most substan-
tial securities of the market fell rapidly
in price at public sale. The safety of
bank notes in circulation was suspected
or denied The publishers of counterfeit
detectors spread alarm among the shop
keepers and wo1kingmen, by selling hand
bills with lists of broken banks, which
were cried in the streets by boys at "a
penny piece" One of the New York
associated banks fell into default at the
end of Au2u st and fraud of $40. 900 by
the paying teller reused suspicion of SIM
liar misconduct in other institutions.
The regular discount of bills by the banks
had mostly been suspended, and the
street rates for money, even on unques-
tionable SECURES, rose to three, four and
even five per cent. month. On the or
binary securities of merchants-such as
promissory notes and bills of exchange
money was not 10 be had Mt any rate. House
after house of high commercial repute
succumbed 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 subject of mutual con-
graduation among bank officers. The
statement of the New York city banks
for the week ending September showed
further reduction in loans of more than
"a, 900, 900. Commercial embarrassments
and suspensions became the chief staple
of news in all the papers of town and
country The purchase and transporta-
ton of produce almost entirely ceased.
From this period, there was nothing lack
ing to aggravate common distress for
money. The failure of the Bank of
Pennsylvania, in Philadelphia, was fol-
lowed by that of the other banks of that
city, and by those of Baltimore and of
the Southern Atlantic States generally.
Commercial business everywhere was sus-
pended. The avalanche of discredit
swept down merchants, bankers. moneyed
corporations, and manufacturing COM
panies without distinction. Old houses,
of accumulated capital, whiah had with
stood the violence of all former panics,
were Frustrated in day, and when they
believed themselves to be perfectly safe
against misfortune. The suspension of
the New York banks and the banks in
Boston and throughout New England,
which occurred in the midst of October,
was the climax of this commercial hurri-
cane.
Such is the outline of the most extra
ordinary, violent, and destructive finan-
cial panic ever experienced in this coun-
try up to the time of its occurrence.
Early in September, 1878, damaging
rumors began to be circulated in Wall
street concerning firms of special promi-
nence, and on the morning of the 18th it
was whispered that strange happenings
would take place before nightfall. The