New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-01-05
NEWFOUNDLAND'S WOE.
RUIN AND DISTRESS THROUGHOUT THE
MOST ANCIENT COLONY.
THE BANK FAILURES CAUSE DEARTH or CUR
RENcY AND sToPPAGE OF BUSINESS
THE UNDERLYING CAUSES OF
THE FINANCIAL CRASH

THE UNDERLYING CAUSES OF
THE FINANCIAL CRASH
PROM SPECIAL CORRESPONDENT OF THE rsrRrxy.
st Johns ~ F.. December %.
Whatever else may be said OF Newfoundland.
II cannot be denied that IN recent years 1t has at
tanned sufficient notorle'y. In 1890 1t attracted
the attention OF the world by the spirited resist
II offered to the arbitrary. and. IA II turned
out. illegal measures adopted b. the British
Government for the settlement Of the French
shore difficulty. The little colony showed
wonderful pluck In fighting against the modus
v,vendi and successful In proving In the
highest cour; Of law that the Imperial authorities
had no legal power To enforce its provisions.
Then followed the nquitous Coercion bIll'
Of Lord Salisbury. designed II give legislative
sanction to that harsh and unjust measure. and
the historic scene in the House II Lords. when.
before the most august assembly in the world, tho
delegates o. Newfoundland defended their rights
20 successfully to win the sympathy and ap-
prova Of the Parliament and people OF England.
Almost the whole press OF England applauded the
address OF the delegates and approved the dlgni-
Acl and judcious position assumed b. them. The
obnoxious measure was withdrawn and a com
promise Effected. The sea-glrt Isle had
out Of the conflict with honor
Not long after. in July. 1892. the name Of the
island was all lips. as the scene Of a terrible
confederation which destroyed more than half
tho city Of 81 Johns and left II 900 people house-
less. Help came from all quarters The people
bore the calamity bravely and set to work
courageousy to rebuild their capital. In two
years the burned portion was restored and great
! ~ improved and the sun Of prosperity was shin
ing brightly.
1t would seem. however. that the colony IL
destined g. be now as formerly the sport ~ his
torIc misfortunes." Lord Salisbury pithily de-
scrlbed Il. II IL now PROSTATE under calamity
tenfold more disastrous than the fire OK 1892 The
10th u December ~ The present year Will long b.
memorable as the Black Monday" Of Newfound-
land This time II was financial tornado that
suddenly bIrs: upon the unhappy country. the
effects ~ which likely q he far more ruin
Gus and widespread than any previous historic
misfortune ON the morning ~ that day the
only two banks IN the Countrywide Commercial
and Iinion-closcl their doors creating universal
panic and distress. The next day six OF the larg-
eat mercan,il" firms suspended payment. increas-
ing The dl-may business at once parayzed.
Amos; the sole currency of the country consisted
| - the notes u IN. two banks. These now
! vaIu-icss one would receive them. Few per-
sons had more than few gold pieces and a small
supply ~ silver IN their possession: many had
/ but two or three dollars In their pockets. Gold
was hardly ever seen In buying and selling-the
notes answering all purposes. Those who had
/ money I'm their houses found that It was In the
} dis 'redtcd notes. and tina, their money current
account and deposits were locked up In the closed
/ banks without any warning. the community
was deprived Il us circulating medium and near
~ all buying and selling came to -tandstill ex-
/ cept on limited credit The shops were open
/ but IN. customers few and far between. \ splen-
! did assortment II Christmas goods In stock
or stood temp,ingiy In the windows. but few could
touch them The people found themselves as In
an enchanted casile-bewlldered. powerless I'M
able g. comprehend the situation.
Speedily employers u labor of all kinds find
/ ing themselves without the means Of paying
wages and that demand for their articles Of pro-
duciion had ceased. were compelled to dis
charge their hands Day aborers were no longer
required. Dismay was pictured on every face.
! and the question on very tongue. What Is
going to be the end Of ,his?" The condition OF
| affairs was entirely unrrc ederted here or else
| where
But when p meeting Of the shareholders Of the
Commercial Bank was held. frightful reveal
tons were speedily made. and the condition Of
the bank was found u be FAR worse than any
one had deemed to be possible Msma gemen,
OF the grJssest and most culpable kind came 10
light. Overdrawn accounts To the extent OF a
million and quarter ~ dollars were found IN
the books For these advances no proper securi.
ties existed. One merchant who also q
director Of the bank mad overdrawn his ac.
count TO the extent Of $4,000 Three other
directors had obtained each one-third or hall
that amount. Many traders and private indi
viduas had obtained smaller overdraNs Tn,
notes In circulation amounted to $3.50 900 Thes.
were held by persons all over the country and Il
was soon seen that they were almost wort HESS
The deposits In the ban. were large. and Their,
were amounts lying on current account Tn,
shareholders who were liable. by the charter fo
double the amount OF their shares were strucl
with dismay. The great sulk ~ them were per
sons OF moderate or small means who had in
vested In shares 10 make n provision for de
clining years or for their families Many wer
widows and orphans whose little all was I,
these shares The tales OF utter ruin and almos
bcggary among this class are heart -rendne
Noteho.ders. OF whom many are poor men, ar
no less TO be piticd These may recover 10 cent
out OF the dollar-hardy more Depositors vii
also lose heavily. The liabilities OF the ban
amount to nearly two millions OF dollars. As
sets not yet known. The mercantile ii---
indebted to the banks will have to go int
. liquidation. The bank is a complete wreck an
entails widespread ruin on thousands.
The condition Of the Union Bank is consdcre
to be fairly good. 1t Is believed. at present tina
It will pay Its debts. but shareholders will los
the value Of their shares. Noteholders wi
probably obtain so cents on the dollar The sam
system Of permitting overdrawn accounts wa
In operation In this establishment. but unde
more careful restrictions. Still, some director
were found to be heavily overdrawn. The affair
OF the bank are only partially investigated a
yet, 30 that much depends on what may ye