Omaha daily bee., 1884-05-16
THE FINANCIAL S17UA TON

'SShio w w NOAS hNhAShAbBt 10 aS"'J
confined to the speculative class of bus
mess that makes its headquarters in Wal
street. The crisis was caused by . reck.
less spirit of stock gambling aud the
initiation of corporate property repre-
sented by fictitious stocks. The most
careful inquiry shows that the depression
is confined to the Atlantic seaboard al.
most entirely. While there have been
business failures here and there in The
middle and western states, they have
been purely local in their character.
They have been in no way connected
with the Wall street crash, nor are they
to be compared in magnitude with the
eastern failures. Among the failures in
in the west, the most important one ia
that of Sabin 81 Co., of Saltwater, Min.
n%esota, who we're recently crippled by
serious fire. Besides, they were working
largely on borrowed capital. Other fail.
ures of less note in the west have been
due strictly to local causes.
In New York the recent failures are at.
tributable to reckless stock jobbing.
The shrinkage in stocks has been unpre-
cedented, and spectators who have been
unable to unload have been crowded to
the wall. There is no denying the fact
however, that these failures in the inan-
cial center will affect the whole country
more or less. First came the collapse of
the banking house of Grant u Ward,
whose liabilities amount to between S.
000, 900 and $40, 900, 600. Developments
since the failure are of the most startling
character, and show that they either
knew nothing about business or were car
rying OH a bold confidence game. The
four partners put in S100, 900 each, and
drew out a salary of $3G, 200 each, or a
total of S144, 900 a year, without regard
to the profits of the business. This rob-
berry in itself would soon have exhausted
the of the bank. 1t ought not
to surprise anybody that they borrowed
money here and there in large sums or
that they should engage in stock specula-
tions of the most reckless character and
in crooked transactions of every sort.
Their whole concern was nothing but a
balloon, and what surprises us is that it
loated as long as it did. Had the col
lapse only affected the members of the
firm no one would have cared, but they
robbed not only a large number of dupes
but dragged down with them the Marine
bank, whose president, it is now shown,
was also engaged extensively in speculat-
ing in railroad and other stocks. The
Marine bank failure was mostly local in
effect. No other banks or business firms
were heavily involved, and the only rail-
road that was directly affected was the
one which received a severe blow. The
heaviest account in the bank wa that of
New York city and all who were ruined
by the collapse of Grant and Ward were
residents of the city. But the immediate
result of these two failures was a further
marked decline in stocks. Next came
the failure of the Metropolitan bank,
whose president has also been specializing
in railway securities, and ~endeavoring to
bolster up the stock of a railroad in
which he was heavily interested.
Naturally enough other banks and brok-
ers carrying on a speculative business re.
ceived blows they were unable to with
stand. Now comes the report that the
prominent bankers and brokers, Fisk &
Hatch, dealers in general securities, have
gone down in the crash. AS each house
of this kind suspends it of conrse in
wolves a large number of persons, but at
yet the indications are that banks thai
have been doing a safe, conservative and
strictly legitimate banking business,
while more or less affected by the various
suspensions of the Speculation houses
will weather the storm. The financial com
motion will not extend to any great degree
outside the limits of New York. Isolat
cd suspensions in the principal cities how
ever, may naturally be looked for, but
they will be failures of houses similar il
character to those that have gone to the
wall in New York.
While the panic in Wall street may
create a stringency in money and in bus
mess throughout the east, we do not be-
lieve that it will extend to the west in
any noticeable degree. The CROP
throughout the west are reported in fa,
vorable condition. The last report o.
the department of agriculture indicates
one of the largest crops on record, and
the cotton crop of the south, according
to Bradstreet, promises well. In many
of the principal cities of the west, notably
in st. Paul, Minneapolis, Omaha an6
Kansas City, there is a great deal Of
building in progress, and real estate con.
tinues in demand at good prices. In
Omaha there is not only a healthy build,
ing boom, but there is q great deal Of
public work going on. Laborers and me,
chanics are nearly oil employed at tail
wages, and money seems to be abundant
! Our banks are ranked among the mos
sslid institutions in the country, and
general confidence prevails that nothin,
will occur to give our city and state a Sc
D back this year. The only effect that tn,