New-York tribune., 1908-08-04
TWO PAN[CS COMPARED
,oo7 NOT SO BAD As 1857.
1o,ss WindmaIer Says Conditions
Then We're Much Harder.

,r-.5,,,,l,er Of IN. firm Of Louis wind
- e. Rocker. discussed yesterday some OF the
-. ef similarity between the famous panic OF
p-' - the recent financial depression He has
- -. a. business here for more than fifty years ana
os.a5 ont the different conditions that have
-, in the space of half century TO anect
-,.sss In an article in the current NUMBER OF
~ r,,-,,r,.- he has considered in more general
= -hs various financial problems involved
=, ,ofh ranics~ he observed yesterday, hnan-
= -.,.,ions with railroads were AZ the beginning
--o,,hle In 1857 Il was because Of the TOO
- " sx,snsion Of the railroads and the eonfdenoe
= ...sr promoters. who induced banks 10 invest
..svsly on the expectation that towns ano paying
,.lstion would spring up quickly along the ne"
- When this prosperity failed to materis1lSe
% 30 securities the banks had purchased fell far
- .be -urchase price the crash came The re-
-. ss--essjon Of Ier really started in March OF
-. res- when there was an expectation OF re-
,,-sissI by the government cf the rsliroans in
,-sirh financial institutions had large hoidlngs
,s started the decline that ended with fhe coslng
:. - many banks and trust conpa MES.
..-be panic Of 1857 came Ike q bolt out OF blue
., and II caught nearly every one by surprise.
-r.rs were few OF US. however. who early in the
rn-.er drew out all the cash we could from our
,.-ks and kept f. 7 was one Of the few. Why
sfs - I cannot now recall I pretty certain
.r,srb that had no definite sense Of impending
disaster Il may have beer prenlonition but It
-ss ipckv remember that when the Ohio Life IN
x-rznce end Trust Company failed IN August ana
.-s-v hank y town except the Chemical suspended
"a. saved the trouble and worry of most other
business ren-
.-r5a o-1v other house that 7 now recollect
-, --enare5 IN the same way for the difficulty
rs Zou Holman & Co This banking firm was
-,,osA5 ~ three brothers, with Offices in the old
Pc Rrfdtng. IT Hanover street and Exchange
r9..s They drew out some time before the panic
n -. zol5 they could get. and II was 6 large
,,sr-,-v They kept in chests in their offices
,s .he three brothers lived there all through the
manic guarding their property
~. --5-,s ir1norrance Of having cash a. that
.,e zss even greater than during the trouble last
.zr We did not have The maLeshift Of Clearing
Eso,ss certificates and many of the banknotes in
circulation we're of the wildcat variety Each state
h.5 ,rs ourr banking system There vera two sorts
~ hanks The better sort Of these deposited
zfs-v fund with State Treasurer 10 insure their
circulation and 10 protect their creditors The
-otss o. these banks passed usually at face value
The second clsss called free banks and wildcat
tsrks' deposited simply enough 10 secure the
-,o-ebolders The notes from these banks some
times suffered as much as 70 Per rent discount.
Under such conditions il is not surprising that
credit was high. and. as I have remarked in nv
s-ticle in The orun,' knew 4 merchant who
usid Der cent for the Of 4 certain sum for a
s+nsle dav. You can understand that with such
rates business men began 10 fell and factories 10
shut down. The depression. the suffering and the
excitement far overshadowed the crisis last year,
because the country has grown enormously in
wealth snd oUr banking system and currency have
improved. The worst panic Ve ever have had in
NJ opinion. was that Of 1873
Regarding the rapid recovery from the panic OF
TE7 Mr.. Wfn6rfiIler said All the banks IN the
country outside OF New York suspended, as I recol
lsct with the exception Of the hanks in San
Fraucisco But il was late in the summer, and
that wear had unprecedentedly large crops.
These saved the dsv. and soon gold began 10 come
in from Europe and from San Francisco. In the
early winter that wear business began TO struggle
70 rs feet. and conditions were normal by the
bumper crop. and believe the effects Of the recent
depression will ne virtually wiped out as result
In looking hack over the panic Of fifty years ago,
Nr WindmuIler recalled many interesting details
IN the business life Of the city. For example, in
Is7 there were among the dry goods houses those
Of De Rham & Iselin. Speyer. Selignlan & Stett-
heiner and KuaUth. Nachod q Kuhne-
Most of those names" remarked Mr.. Wind
miller are now familiar 70 everybody repre-
ssuttng banking houses This evolution from the
mercantile business the financial Is only one OF
nnsny changes that have occurred in fifty years
And since 7 an on the subject. L might remark
thar in ffty years the auctioneeT has ceased 10 ne
arbiter % business ne once was in those
Gays ! think New York was the greatest place in
ne world for auctions Al the end of the season
importers would close out the entire stock under
the auctioneers hammer He took the bidders
notes. discounted them and paid over the money TO
the importer Also he would pass Judgment on
which bidder should be recognized at the sales; IL
good deal like catching the Speakers eye
IN Congress II al auctioneer had doubts OF q
merchant being good. that merchant might yell
himself hoa-se without being heard by the suc-
ronseT.