The Opelousas courier., 1884-07-19
PANICs OF TIT PAST.
A History OF tine Financial COnvul.
siOms of 1857 and 1873.

A History OF tine Financial COnVuls
siOns of 1857 and 1879.
The panic Of 1857, says the Boston
Herald, wa phenomenal in the circum-
stance that it is the only one which ever
materially affected foreign European
markets. 1t was pheno1I enal, @llso, in
Its suddenness, and in finding the bust
ness of the country totally u%nprepared for
it. It appears that up to August of that
year our commercial affairs were gener-
ally prosperous. The local journals
throughout the country represented bust
mess as in a healthy condition. High
prices were said to have enriched the
farmer, the stock raiser, and the planter.
Trade and mechanicalindustry fourished
with corresponding success.
But the storm was coming. On the
sth 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 a 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. It came like a lightning
stroke from an almost clear sky. An in
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 a 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 comiany-showed a reduction
of 81, 600, 600 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 w%oikingmen, by selling hand
bills with lists of broken banks, which
were cried in the streets by boys at "a
penny a piece" One of the New York
associated banks fell into default at the
end of August and a 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 ans
even five per cent. a month. On the or
binary securities of merchants-such al
promissory notes and bills Of exchange
money was not to be had at any rate. Hous'
after house of high commercial reput'
succumbed to the panic, and several heavy
banking firms were added to the list o
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 subject of mutual con
graduation among bank officers. TIL
statement Of the New York city bank
for the week ending September 5 showet
a further reduction in loans OF more thai
Sd, 00O, 900. Commercial embarrassment
and suspensions became the chief stapl
of news in all the papers of town an
country. The purchase and transporta
ton OF produce almost entirely ceased
: From this period, there was nothing lack
ing to aggravate common distress fo
money. The failure of the Bank Q
Pennsylvania, in Philadelphia, was fol
lowed by that of the other banks of tha
Q city, and by those of Baltimore and c
s the Southern Atlantic States generally
Commercial business everywhere was stu
, pended. The avalanche of discred
swept down merchants, bankers, moneye
r corporations, and manufacturing con
\ panies without distinction. Old house.
Of accumulated capital, which had witt
Q stood the violence of all former panic
were FRUSTRATED in a day, and when the
v believed themselves to be perfectly sal
!. against misfortune. The suspension
2 the New York banks and the banks
Boston and throughout New England
+ which occurred in the midst of Octobe
j. was the climax Of this commercial hurr
cane.
2 Such is the outline of the most extr
% ordinary, violent, and destructive fina
cial panic ever experienced in this cou
"A FRY up to the time of its occurrence.
Early in September, 1878, damagir
le eumors began to be circulated in Wa
Of ;treet concerning firms of special prom
II hence, and on the morning OF the 18th
was whispered that strange happenin!
would take place before nightfall. AZ
ID stock market had opened weak. operate
= wsre not reassured by the flying report
II, AID though the Vanderbilt party d
their best to ward off the despera
Il blows which the bears were dealing
a. the market, their strength weaken
ia every moment, and at II o'clock the e
change was seized by a wild PAM
Stocks tumbled three and four per ceI
he with surprising rapidity, and Weste
lis Union fell off ten per cent. IN as ma
moments. At 1912 o'clock the crier
the exchange raped for attention, a
'es while the crowd listened intently,
is read in a calm and deliberate voice
II BRET announcement that the firm of
Cooke and Co. had suspended. For
cs' Instant there was intense stiffness, a
re, then the crowd broke madly for I
"a. street to learn the particulars OF
failure. The news spread like witdfi
'us within a few moments . mob surround
nal the Office of Cooke and Co., on