The Waco evening news. [volume] (Waco, Tex.) 1891-1894, 1893-06-28
FINANCIAL CONCLUSIONS.
The Most Notable Monetary
Crises of Modern Days.


Monetary crises have not been
confined to the modern era, but the
term panic did not begin to lie ap-
piled until comparatively recent
times. As the intelligent reader
would naturally infer the term is
derived from the word Pan, a god
of the old Grecian mythology. Pan
is supposed to have whiled away
good many of his spare hours in
sallying forth suddenly from the
mountain Businesses in which he
dwelt and frightening passing trav-
elers. The abruptness of his COM
ing and the grotesqueness of his ap-
pearance excited terror to such an
extent that all sudden and uncon.
trollable frights at length began to
be attributed to the visitatlons Of
Pan. AT fret the word panic, in
the Greek photography, was applied
to sudden and general manifesto.
tions of alarm in armies and large
assemblages, and it is used in this
connection still in several of the
European languages. 1t was not
until our own time, broadly speak
ing, that the term began to denote
financial crises in which confidence
suddenly vanishes in the business
world and feeling of distrust in
the stability of values and the sol.
vency of individuals takes its place.
There were panics before the
collapse of the South Sea scheme,
but tina. one is about the earliest
which would have interest for read
ers of today. This delusion took
practical shape in I'LL, when
Robert Harley, earl of Oxford, who
was the lord treasurer, proposed to
fund floating government debt
of 100000, the interest,
about 5000, 600, to be secured, the
government making permanent
existing duties on silk, tobacco,
wines and few other articles. The
government was to pay the Southern
Sea Company, which Harley estab.
lished, the 6 per cent interest at
the end of five years, and to grant
to the company monopoly of the
trade with the South Seas, which
means the countries of Spanish
America. Four or five years after
the establishment of the company
its privileges were rendered worth.
less by the refusal of Spain to con-
tinue commerce with England on
the old conditions. The company,
however, concealed its bad fortune
in this respect from the public and
its stock continued to bring high
figures. The company's profit from
other sources at length became 80
great and its credit so firmly estab-
lished that it beca ne rival of the
Bank of England in controlling the
finances of the country. In 1920
parliament accepted the company's
offer to pay the national debt, re-
ecting the offer of the Bank of
England.
This marked the beginning of the
end in tie career of the South Seq
Company. A period of the Widest
speculation now set in throughout
the whole country. Shares Of the
compauy's stock which were selling
at $500 before. parliament had acted
in this direction quickly advanced
to $1,000. At last, in the latter
part of 1920, the report got abroad
that the chairman, John Lunt, and
most of the other officers of the
company had sold out their stock at
the high figures. Then the bubble
burst and thousands were ruined.
The Bank of England stepped in to
save the company's credit, as it has
just now done in the case of the
Earrings, but its good offices were
unavailing. The company's affairs
were wound up, some of its direc.
tors were imprisoned, all of them
fined, and about 33 per cent of as.
sets was saved from the wreck for
the stockholders.
The Mississippi scheme, in its
general features, bore a stricking
likeness to the South Sea affair
John Law, a Scoth banker, %as.at
the head of the Mississippi ,pecula.
ton, and the field of its activity