Evening star., 1895-05-28
OVER THE DEAD CENTER,
New York Incident of the Financial
Squeeze of lS93.

A New York Incident of the Financial
Squeeze of 1893.
From the Philadelphia Press.
AS the season Of stress and storm which
began in '93 is passing away the flnanciers
who were in peril at that time are begin
ming to exchange condolences. and these
anecdotes show how great the peril was
and how often it happened that great
business and financial houses stood on the
verge of precipice leaning over, and were
only saved by mutual forbearance, kind
ness and the stretching of business GUS
toms to meet the unusual emergency.
heard of one of these anecdotes a day
or two ago. Right in the midst of the
IN the world of trade, whose name is
known all over this country and Europe
went to friend and said: II am SO near
ruin as this, that while l have millions in
securities l have scarcely thousand dol
lars in cash, and must have $25 900 today
or am done for
He had thrown himself ianguidly into a
chair, as though almost ready to give up
the battle. He knew well enough what
the announcement of his failure meant for
the commercial world. 1t probably would
nave pulled down score or more of i'm
portant institutions, and very likely would
nave preciptated general disaster. He
mad been everywhere with securities in his
pocket valued at hundreds of thousands of
dollars, pronounced good then but he was
told i'll every place. Your securities are
good, but We cannot lend money now" His
position was like that of the castaway
upon the ocean with water, water every
where, nor any drop to drink" His Sc
curitles at their normal value were proba-
bly, worth as much as S10,OO0,000, perhaps
more, but 1t was impossible for him to bor-
row 80 upon them.
The friend to whom he went knew as
well as he what his failure involved; knew
that he was worth at least ten millions in
securities, although he could not command
the s25,GW which stood between him and
the protesting of his paper.
The friend said, well. I'll try to help
you. What collateral have you got?" He
took from his pocket securities which be-
fore the panic would have commanded
easily S50,NO, and said, II offer these"
They are good,' said the friend moth
ing better. Let me see what 1 can do
He went out to a financial institution Of
which he had long been a customer, and
he said to the officer: Il want to borrow
$4,000 on this collateral, which is worth
soo,oD: l will guarantee the paper. pro-
vided 1 have recourse to the collateral in
case it is not paid"
lend that. The collateral is good enough:
but We can't even lend on government
bonds. Nobody is lending, everybody is
trying to borrow"
Well" said the friend then 1 will sub
nit proposition to you. If you will lend
the money on this collateral 1t will earn
per cent Tor you. IL you VIII not lend 1t,
then 1 will draw my own check upon this
concern for $4,000. and l will keep the COL
lateral myself Now it is for you to say
whether for the $4,000 that you've got to
part with you will take security and per
cent interest or whether you will pay 1t out
and get nothing for it, as you must do if
/ check it OUT
OF course the officer, confronted with
such an alternative, could only decide to
loan the money. and ii was the biggest
loan that was made that day. or perhaps
for several days before or afterward-at
least. the biggest new lean.
The friend went back to the capitalist
and said: THE S25.Oo0 is at your COM
mand." When the capitalist heard this he
became a new man. All the energy charac-
teristic of him returned. Said he: This
will carry me over the dead center, for
am satisfied that before any of my other
obligations mature it will be possible to
borrow money on such securities as l pos
sess,'' and that proved to be the case.
The capitalist is now enc of the conspicu-
Gus influences inducing return of prosper
ity. He Is esteemed to be worth not far
from twenty millions, and he can borrow
upon his securities millions of money with
perfect ease. He does not like to think of
the day in '93 when $4,000 stood between
him and ruin.