New-York tribune., 1899-12-24
finanfidl.
The Financial World.

general
jority Of people affected by them are convinced
that the last panic is different from any pre-
ceding one. and therefore VIII not produce the
same effects. This mental state Is caused by
the differences Of detail, since the average mind
IL impressed by details, but does not ma 1t so
easy TO apprehend general causes. If we go
step lower in the order OF intelligence, We ind
classes Of people who are convinced that GER
tain rich men designed the whole disturbance,
TO carry out mysterious plans The fact that
the financial centres OF the civilized world have
been shaken at the same moment and from the
same causes, the disturbances simply being
more acute at one point than another' makes
no impression on this order or nina; TOT the
sufficient reason that 1t Is beyond It's grasp.
The panic that has shaken Wall Street the
past week unusually severe. Ihat some-
thing Of the kind was impending, was felt
rather than seen. week ago yesterday the
market closed In a way that suggested there was
serious trouble The most that one could hope
for was that the fall which was inevitable,
would be spread over a safe period; for all the
difference there is between merely declining
market and a panic, is difference OF time.
Ten points drop in three hours Is panic; in
three weeks 1t is simply heavy market. The
pany. however, on Monday preclpitated the
smash. Many financial institutions took fright
and called loans extensively. Europe was SELL
ing everything the market would take. This
and the domestic liquidation, knocked the bot
tom out of things. 1t was In the afternoon.
when money went to a per cent per day and
might have gone to 2 or 3 per cent that the
market was at it's worst 1t looked as If there
70 ctr
as 1t always does at the acutest stage Of
panic. And just as something other always
does occur at this moment to turn the tide, so
in this case the something took the form Of a
hasty meeting Of bank presidents who united
to send ten millions into the Exchange TO loan.
At 230 K seemed as IL only the coming OF
o'clock could stop the Generalization; at 2:40
the turn came suddenly, with the offerings Of
the bank money. and a rapid recovery took
place The panic was over.
- It is we'll understood that when a panic is
stayed there Is always violent rebound, but
It is apt to be very irregular. In this case. the
irregular movement OF the market from Tues
day to yesterday excessive, and IL came
from the convused state OF the foreign markets.
II London and Berlin had been easy, and our
disturbance here the result OF local causes only,
we should in all probability have had the high
rebound OF prices start strongly on Wednesday
and go through Thursday before there was any
quieting down But II so happened that the
fortnighty settlement had to be made in Lon
don on Friday and Saturday. and fears OF seri-
Gus failures were strong. This kept a pour OF
securities on US from the other side and de-
tered houses here which could buy from buy
ing The effect was that though another ten
millions was subscribed for loaning purposes
and other efforts made to keep the market
steady there were serious declines in a number
OF stocks through the week. even below the
lowest Of Monday; and again critical stage
seemed to develop on Friday. But the panic
did not repeat itself. It never does. The Lon
don failures did not come In the last hour OF
Friday the market turned strongly; yesterday
It opened up In some cases as high as nYe
points above the previous days close. This was
the sort of rally we should have seen earlier
in the week had It not been for the state OF
the foreign markets.
So far, then this panic has followed the gen.
eral rules Of ali panIcs. 1t was preceded by an
increasing tightness Of money, or contraction OF
credits. producing a successive series or minor
falls in the market; 1t prec.pitated by the
failure Of financial institution. the last panic
was precipitated by the Cordage Company COL
lapse the panic was stayed at the moment
when there seemed no bottom for things: and
the violent rebound which follows panic came
along in time. as 1t always does. Whether this
rebound reached its maximum in yesterdays
market the prophets may be able to say; but
the ordinary man cannot. The chances appear
to be that the rally will go farther.
The smash and the rebound may be said 10 be
parts of the same operation The next question
is-What does the market do after the con-
vulsion has exhausted tself7 Here is where the
conflict of opinion comes in. Experience shows
that there follows period Of slow but Irregular
decline, with dull business; in which perhaps
eighty per cent Of the stocks will slowly work
back TO the lowest prices recorded for them dur
ing the. period Of CONFUSION. or the other
twenty per cent, some will not sink so low ana
others will sink much farther. This Is the les
son Of experience; but as the movement IS IT.
regular and not all stocks have the same
fluctuations there remains the chances FOR
speculation. Here. too. is where the conflict OF
opinion operates. The large class Of people VINO
insist that the last panic which happens Is aii-
ferent from any preceding panic, and Therefore
will not be followed by what is conceded to have
followed others, will be in the market. anu
their operations will as much as anything de-
lay and make irregular the receding movement
Of prices.
The contention at this time is that business Is
so active throughout the country. that after lho
market gets steady 1t must resume its for"aiu
movement. That business is active Is uuo
enough: but the effect OF such financial sfh"sN
as we have had, accompanied by serious ran
ures. is to give commercial business ehecA
We have already that II has struck 'io
Christmas trade in many lines the )e"eHS
business specially. The same shock progresses
to a widening circle OF trade; and as II does
business slackens and the demand for money
falls OFF. One OF the after effects OF pahio
following a period of Industrial and financial
expansion. is the filling up OF depleted bank re-
serves, and the relaxing OF interest rates. Inv
shock which the Transvaal war has given 'n'
financial world. will make money easy enous"
in due time simply by contracting the oppo'