The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-08-18
/ NOT HAVING panic
SHOWS STRENGTH.
Such Depression i'll Wall Street
III Former Years Would
Have Brought Crash.
REC OIL cTloNs or 1857
Veteran Newspaper Man Tells
About the Great Panic Of
That Year.
ny WALTER INWARD HARnIs.

by wALTEa EDWARD HARRIS.
WASHINGTON, d. c., & August IL
1t Is fact noticeable in many quarters
that while the:c is disposition to-
predict the coming of hard times at an
early date. rubody is able to give n
clear reason therefor. II hard times
40 cor,c sooi,, 4. viii probably be the
result Of the general expectancy.
Looking for g financial storm may
produc, one.
The recent low price levels reached
by certnin securities, and the hie al
price OF money in New York. wou.l
have cnused a panic TWENTY-FIVE years
ago Even far more recently Will
Street could hot have seer as hard
hit as 1t has been in tho course Of the
PAST SIX inonthn without the cou,try
at large having been seriously az
fectcd. 1t is en- evidence OF the IN
herent soundness Of our financial con-
diticns. ,osssbly. that the canntry 4. 3
not been affected by the Wall Street
sttinse;cy, witch has calscG many big
houses to draw In their horns and
come precious rear to forcing sevataI
moro tc the wall
1t lis Just fifty years ago since the
greatest financial panic. 1t Is true
the country had experienced panics
before, AID has passed through sew
eral since. but among financiers and
financial writer's that of 1857 Is al
ways referred to as 1.-THE Great
Panic II came spon the country like
clap of thunder from clear sky.
For some time there had been
marked uneasiness In the financial
world. but nobody anticipated real
danger. and, as was afterward demon
strated, there was no more cause for
the panic than seized on the business
public, according to Mr.. W. n. Smith.
the veteran newspaper man. of Wash
ington. than there was for that of the
Union troops at the second battle Of
Bull Run.
Mr.. Smith recalls the Great Panic. !
and in the course of conversation to-
day gave graphic account of condi- |
tons and scenes accompanying the
crash Of banks and financial houses.
He has been newspaper man for
many years in Indianapolis and Gin |
cinnati and Washington. in addition
to serving in the army OF the Union
He has known many of the men most |
prominent in public affairs in the J
course of the past forty years, and |
his recollections of public happenings
in that time form mine ofs4pforna II
ton or the historian. SaS,-4s ~ II
Conditions were bad from over |
speculation and from the expansion of
paper currency far beyond the needs |
of business said Mr.. Smith to-day. in
discussing the panic of 1857. But
conditions were not destructive. one{
rene. single failure In New York
was announced. Bankers. merchants
and capitalists. and then the people /.
generally. lost their heads, and within
a few weeks only three banking insti- |
tntions--the Chemical of New York |
the Bank OF the State OF Indiana, anil
the State Bank of Kentucky-were re-
deeming their notes in coin. In many
States every bank went down In thci
crash.
ITO thoroughly understand the panic
OF 1851 1t is necessary to go back and
consider that of 1887. The completion
of the Erie Canal started the widest [
and most unreaso1ing land speeula-
tons that ever afflicted this or any
other country.
1t brought the rich lands of Western,
New York, Western Pennsylvania. Ohio. I
Indiana and Illinois closer to a, market
for their surplus and q tide of emf
grantion started westward Steamboats,
multiplied on the western rivers, and
the era OF railroad building opened.
Railroads and canals were projected I
everywhere. Cotton, which had beeni
only six and eight cents a pound, rose
to eighteen and twenty, making cottoni
lands eagerly sought after. The
United States was the only country in
the world that had made any effort
to pay Its national debt, and at this
time our government was debt-free.
In England and on the continent of
Europe was a vast, amount of idle
capital. and conditions in the United L
States were SO exceedingly favorable
that any kind ofs,American securities
found ready sale in London and
Amsterdam, thus sending constant
~ increasing /stream OF money to this
country. Many Of the States entered
upon elaborate systems OF internal
In this halcyon time of over-speo
ulation the government added an
other and very strong incentive to
the people to speculate more wildly
than ever. President Jackson was at
war with the United States Bank, the
depository of the money of the gov
eminent, and ordered the deposits to
be Withdrawn and placed In State
banks. In making theSe depOSltS tne
Secretary of the Treasury advised
the favored banks to expand their ac-
to the people and loan
money freely. Having millions of
dollars of the funds of the govern
ment at their command, the banks
were not slow in following this adj
vice Of the Secretary Of the Treasury.
Money being plenty ana easily bor-
rowed added to the Juror of specula-
ton, especially in lands New banks
sprang up everywhere. In 1880 there