St. Paul daily globe., 1895-12-26
SCARE CAUSED THE PANIC.
D.
Wall Street Bankers and the Eng.
Iish the Heaviest Suffer-
ers.

While it is not expected this cOun-
try will abandon it's position on the
Monroe doctrine, yet the interests of
both the United States and England
that would suffer from war are too
vast to justify either nation in be-
ginning hoStilities, with no more rea-
sons than appear just now. So 1t is
believed that the misunderstanding
will, without doubt, be settled by
diplomatic negotiation. In the next
place, there were no politics in the
presidents message. All the Eastern
bankers and merchants whom I met
agreed that Mr.. Cleveland had acted
from purely patriotic motives, and
that he had acted wisely. And there
is this third point to be added. An
other bond issue must be made, and
that before many days.
"THE SEMI PANIC
on Wall street was not brought about
by the bankers and stock operators Of
New York. I'm awara, that these
financial storms are always said to
own profit. This view prevails espe-
cially in the smaller cities of the coun-
try and in the agricultural districts.
Somehow people won't stop to think
that, although Wall street men don't
try to avert panics from philanthropic
motives, they are obliged, as shrewd
business men, to look out for their own
interests, and whenever panic comes,
a great deal more money is lost by
Wall street men than is made. Of
course, if stocks go down, the bear
operators and spectators make money,
for they have previously sold the
stocks at higher figures. But it's
equally certain that just as many men
have lost by the transaction, that is,
the former holders of the same stock,
who bought it at one price and sold it
at a lower figure. People say, of
course, that although it may be true
that, whenever one man gains by a
deal in stocks, the other man loses,
vet Wall street has things arranged so
that it is usually the winner and
some country customer is the loser.
But If this were true, every man on
the street would grow fabulously
wealthy, and panics would cause fail
lrres everywhere else except about old
Trinity's steeple. Not only do half the
spectators lose by break in the
market, but the bankers Of Wall street,
the most influential men there, always
lose heavily by a panic, of which they
stand more in fear than anything on
the business earth. These bankers are
never so prosperous as when the coun-
t,.x- toy .tn ,-icir
for they make their money by floating
new enterprises. But let a panic come
and financial confidence be shaken, and
there is no longer any chance of
launching any new scheme.
''The real cause of the recent panic
was the currency question. There is
a lack of confidence everywhere. es-
pecially abroad, in this country's abil-
ity to transact business on q safe ba-
sis until the
CURRENCY EVILS
are remedied. With confidence lacking,
the first shock to the business world
was sufficient to bring dismay. This
shock was given by the presidents
message, which would have caused
very little trouble in New York if the
currency was now in good shape. 1t
was the same way in England. They
say, you know, that the foreign in
vestors brought about the panic delib-
erately in order to coerce the United
States. That is altogether foolish. The
English have lost money as well as
we have, and they simply threw their
stocks over because they got fright
ened. An instance 1 saw in New York
Friday illustrates the situation last
week on both sides of the water. A
heavy capitalist doing business with
the brokers at whose office 1 CHANGED
to be owned about $4,000 worth of
certain railroad bonds. The bonds had
previously been quoted at H. but had
dropped during the break until Friday
morning, as we were seated in the
office, a quotation came over from the
exchange that the bonds had just
touched 1861. 'Sell 'em, sell 'em
quick" exclaimed the old gentleman,
'at the market! any price you can
get!" The broker telephoned over,
but his partner had left the floor, so
he ran across to the exchange him
self. Ten minutes after getting his
order he sold the bonds at par. Within
that space of time the market had
dropped six points and half. A mo-
ment later another block of the bonds
were sold, but the price had jumped
back to 104 Then the old gentleman
realized that he had made a mistake.
He contrived to buy his bonds back
at 105, and day or two later they
were once more at Ill, just little be-
low wherethey were quoted before the
break began. This capitalists alarm
and his utterly
NEEDLESS LOSS
shows exactly in what state of mind
the moneyed men Of New York and
London were for several days. Friday
morning a banker whose name is well
known in st. Paul told me that he had
borrowed $2,0OO000 about $3.50 a. M, be-
fore the exchange opened, at per
cent. When he mentioned the fact to
me it was about half past II and call
loans were then bringing 50 per cent
Interest No, the banks didn't call In
their loans through any preconcerted
action. There was no effort to squeeze
the street, as has been done in the
past. Everybody was simply frighten-
ed.
''It is pretty certain now that the new
bond issue will consist of A per cent
gold bonds to the amount of S1OO,0OO,000
the same as the last issue. President
Cleveland, / think, would have been
glad If congress had provided for the
issuing of "a popular loan at a lower
rate of interest, say 3 per cent. But
unless congress acts very speedily, the
conditions will be those provided for in
the present law, because the loan must
be made quickly. / believe the bonds
will be issued before the first of the
year. | saw, a day or two ago, that
J. Pierrepont Morgan had left New
York for Washington. He probably