Evening journal., 1911-04-01
NEW NEWS OF YESTERDAY
A Story Of the Panic Days
of 1893
BY "HOIIand."

'If the inner history of the so-called
Carlisle panic of 1893 were recorded,
| presume no story ever written which
has to do with financial matters would
be found to contain more dramatic and
sensational details said the late Fred
erick ID. Tappan, the finsncier who, in
1896, induced the New York city banks
to loan S20,000,000 in gold to the
United State to avert a financial up
heaval.
You know that the Carlisle panic
was really a money famine II was
caused by the fear that Mr. Carlisle
as Secretary Of the Treasury under
President Cleveland, might be com
PEELED 10 do what he ayowed publicly
he might have to do-pay all the OBJ
legations of the Government i'm silver
There was practically suspension Of
money payment by the banks of the
United States.
"The Clearing House Association Of
New York and those Of other cities felt
that II was imperative that they should
take some action. II was spoken Of as
wonderful thing that the committee
of the New York Clearing House Asso-
citation, which had charge of accepting
securities from the banks and of issu-
ing clearing house certificates upon
these securities, should have been able
to pass instant judgment upon the
value of these securities, although we
were accepting them by millions You
see, We were Obliged TO say, when Sc
curities were brought to us, what the
I value of each kind of security was;
then, having established the value, to
allow proper margin. and then to is
sue clearing house certificates TO the
bank which offered these securities,
these certificates being good I'm pay
ment Of balances at the Clearing
! House.
"But can tell you a much more dra-
matte and important circumstance
than that with which the public was
made familiar through our ability in
stantly to estimate security values,
and it reveals the great part that con-
fidence plays in all business.
The panic was caused by an instant
loss of confidence. I said to my friends
/ in the Clearing House: We must take
steps to restore confidence. There is a
limit to our capacity to lend Clearing
House certificates upon securities, but
/ am convinced that If the Government
at Washington will take the first step
then we can move OFF In time with that
step, and in that way begin to check
the panic
II made a little wager with one OF
my banker friends I bet him that ii
| President Cleveland called an extra
session of Congress TO repeal the Sher-
man silver law-which was the cause
of the trouble-then on that very day
we would notice decrease i'm the de.
mand for Clearing House certificates
Furthermore, I stipulated that If the
House of Representatives at Washing
ton. in a special session called by Mr.
Cleveland should repeal the Sherman
law, We would instantly notice a heav,
decrease in the demand for Clearing
House certificates; and ] also declared
that if Congress should repeal thu
Sherman law. the demand for certif
Gates would cease within a week.
We'll. when President Clevelan,
summoned Congress into special ses
sion in August of that year, we saw a
5 once that the climax of the demand 70
certificates had been reached Tha
meant that a little confidence was re
turning. When the House of Represen
tatives repealed the Sherman law
some two weeks later, the demand 70
certificates fell off heavily. In the ST,
! weeks that the Senate was fighting {,
/. prevent repeal, the demand ceased al
most entirely and the banks began Il
take up their securities by depositinl
certificates. On the day that the Senat
adopted the repeal, practically ever,
dollar of certificates had been redeem
ed, and the day after President Cleve