Arizona republican., 1899-12-29
Nature of the Disaster on
 Wall Street
WON'T HAPPEN AGAIN
Conditions Brought it About Which Would Have Wrecked the Country if They had Precipitated a Panic at Time When There was Less Prosperity-0nly Speculators Af- fected-The Future Bright.

New York, Dec. 2S.-(SseciaI) )-WaJ
 Street has received a severe shock dur
 ing the past week; the direct conse-
 quence of an overproduction of indus
 trials and tight money. It was a sur
 prise chiefly because of the time of oc-
 currence. A collapse of the speculation
 in industrials has long been expected;
 but comparatively few people shared in the often-outspoken belief, dur ing the past six months, that it could happen while the country was on
 the high road of prosperity.
 It is hardly necessary to remind our customers of the causes of this break. For two years, and especially in 1899, we have been creating many new cor porations with enormous amounts of securities of untested merit and con- taining a dangerous amount of water. The fact that many of these new crea- tions were simply consolidated affairs, and that great prosperity was insuring extraordinary profits could not conceal the dangerous extent to which they
 were inflated, an extent which in or dinary periods would have brought an earlier and much more severe collapse. The financing of these great combina- tions and the floating of their securi- ties necessarily locked up large sums of money, especially as the public did not absorb them so freely as expected, and therein is the safety in the present situation. So long as money rates con- tinued easy and business good it was comparatively plain sailing; and had these conditions continued it is quite likely that we should have soon been precipitated into a state of wild bullish speculation followed by a much worse collapse than was witnessed last week. By singular combination of good and bad conditions a very wholesome check has been applied to this speculative tendency; and there is little prospect of seeing it renewed upon the former scale.
 Tight money was the instrument by which these speculations were held in check. The higher rates for money, in- duced by the activity of all branches of trade and industry, could only be re- garded with satisfaction; and it Is worth while emphasizing the fact that good mercantile borrowers have found no difficulty whatever in securing the accommodation they needed on a to ' per cent basis. It was the specula- tive borrowers, particularly those car rying inflated industrials, that met with discrimination; and the day of reckoning was simply hastened by the heavy absorption of funds by the treas- ury as well as the efforts of the great banks of Europe to replenish their gold reserves. Secretary Gage made stren- uous efforts to counteract the effects of the treasury in the money market, but they have only been partially sue cessful. Gold is beginning to go out wards more freely, probably about need cause no special alarm. We have a plentiful supply of gold here and the worlds output this year will fin all probability be larger than last year in spite of the temporary stoppage Of Transvaal production. All that we send to London will simply go where it is most needed and do the most good.
 When the panic was at its height, the clearing house banks and several of
 
 to the rescue and offered some 0.O0O,- 600 of call money. This had the desired effect, it prevented further disaster and there is little question but that the worst has been seen. Losses have been severe in some quarters and any de- cided improvement may be deferred until the full effect of these has been determined and the money market gets into better shape. The latter should be forthcoming after we fairly get into the new year. The enormous liquida- tion of the last few days must result in large contraction of loans; cur rency is now coming from the interior more freely. and as the treasury is in- creasing it's deposits with the banks. from Eow on there is good reason 10 expect easier conditions in the money though much will depend upon the Transvaal war and it's influence in The struggle between Boer and Briton threatens to prove much more serious affair than anyone an ticipated. A considerable issue of British consols is to be expected and this will temporarily but not seriously derange the foreign financial markets. Recuperation from the shock of last week should be more rapid after the turn comes than usual after panic. because of the sound conditions which prevail outside of the industrial spec and a lesson has been learned that should tend towards greater sta