The climax. [volume] (Richmond, Madison County, Ky.) 1887-1897, 1890-12-17
A REVIEW OF THE FINANCIAL PANIC.

manner as may be provided by the act
directing said vote to be taken.
A REVIEW OF THE FINANCIAL PANIC.
Fisher & Shaw, investment bankers Of
Baltimore, under date OF December 18th,
write: The civilized world has recently
witnessed one of the most remarkable
panics that has occurred during the pres
ent century. The causes which led to it
had their origin in countries very far
apart, viz: the Argentine Republic,
South Africa, England and the United
States, and were brought about by the /
continued and excessive creation Of debts /
by governments, municipalities and pri-
vate enterprises. The evidences Of these |
debts, in the shape OF shares and bonds, 4
had TO seek a market in London, and /
bankers in that city, embroidered, no /
doubt, by the ease with which former |
loans had been taken, and lured on by |
the prospects of heavy gains, kept on in !
creasing the quantity of securities with /
out needing the law of supply and de-
mand. Had we been told, in this count |
~, a year ago, that the coming crisis in
the Argentine Republic would be strong
" reflected in New York, we would have
laughed at the idea. So accustomed are
we to rely upon the inherent strength of
our own institutions and to look for pos
sible danger within the limits of our own
horizon, that we forget that the axis of
the financial world rests in London,
whose supremacy as the banking centre
has asserted itself through recent start /
ling events. In the future, as in the past,
the borrowing world will continue to look
to the enormous cumulative capital of
England, and when that market is even
temporarily closed to it, the effect is felt
the most severely, perhaps, in the United
States, where new development is ever
in advance of its accumulation of wealth.
| For months past, our advices as to the
condition OF affairs in London had been
alarming, and we felt sure that, sooner or
later, the storm, which had so long been
brewing, must burst We little thought,
! however, that one of the first commercial
houses in the world would have required
| the support of the Bank of England and
other bankers to save it from failure
The surprise was general, for the cOnserv-
alive reputation which it enjoyed was
such that its name alone was a tower of
| strength and was a fortune in itself. The
united action Of the London bankers was
so quiet and so prompt that it doubtless
averted a general catastrophe, for there
seems good ground for the belief that the
state in which the Messrs. Barring found
themselves only reflected the condition
of other firms
In this country, the supply ofnew secu-
rites had been accommodating for months
in the hands of bankers, waiting TO find
its usual outlet in London, so that when
the crisis came and large blocks Of stocks
and bonds had to be thrown on the New
York market for London account, the
strain was more than it could bear and
quotations fell rapidly.
The demand attracted by the low
prices, which has been the cause of the
subsequent advance, having to all APP
pearanee been satisfied, we shall, for a
while, look for fuctuating market.
Tending as we were towards a period
of great imitation, it is fortunate that the
panic has occurred at this time, for its
severity is confined within a comparative
ly narrow circle, and its results have not
been so widespread as they doubtless
would have been had it taken place
year or two hence. 1t has been appropri-
ately termed by the New York Chronicle
"a security promoters panic" The re-
cent revelations brought to light in Phila-
delphia give evidence of the reckless
manner in which individuals, and even
corporations, have engaged in schemes
of doubtful utility and profit.
A time like this is bound to relegate
the vast crop Of schemers to a long OBJ
livion. After such an upheaval, there
must follow period of dizziness, which
will be felt in all the channels of business.
Railway building, which has doubtless
been overdone, and enterprises of various
descriptions, to say nothing of land
booms, will receive a salutary check
The unsold stock of good securities will
have to await gradual absorption before
new issues will find favor with bankers.
Much foreign and domestic capital has
heretofore sought investment in railway
bonds and stocks, but, outside of the
speculative class, investors are scrutiniz-
ing such securities more closely than
ever for permanent investment. Before
tuI confidence in railway management
shall have been restored, methods viii
have to be devised by which more regu-
larity in the payment of dividends shall
be observed. Their precariousness has
become proverbial.
1t is indeed astonishing and favorable |
indication, considering the alarming con-
ditions prevailing, and which have been
heightened by protracted stringency in
the money market, that sofew disasters
have occurred. In Baltimore, although |
funds have been hard to obtain, the strain
has not been felt as severely as in New
York, Boston and Philadelphia At this
time of writing, the stringency continues
to be severe, and from the indications at
our command, we cannot foresee any i'm
mediate relief, as the return to a normal |
condition must of necessity be slow. The
money has been scattered away from the
financial centres, and, as is always the
case during panics, doubtless a good deal |
Of it is boarded. Funds are never very
plentiful in December, when corporations
are accommodating money to meet the Jan
uary dividends. This month has always /
been a period OF voluntary settlement Of
accounts among merchants, but the pres
ent condition of the loan market is re-
stricting commercial operations and is
bringing about an enforced liquidation,
for notwithstanding the large business
done in November, as indicated by the {
general bank clearings and gross railway