New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-10-13

Baltimore & Ohio and Burlington roads
! cut their dividends. December wheat
option fell below % cents in the month
of October and cotton sold at o1a cents
pound. In November. 1894, the ma
lional reserve stood at around
$62 100000 and bids were again in
vited by the administration for . per
cent bonds amounting to Sj0OO.Ooo.
A bid was accepted for the entire issue
by New York financial syndicate and
this afforded temporary relief.
But confidence had been shaken, and
during the last two months of the year
| SOS, 100000 was taken out of the re-
| serve, and by January %, 1895, the re-
serve had fallen to $56,OOO,OOO, a trifie
above one-tenth Of the government
outstanding currency notes. On FEB
ruary s President Cleveland, after con-
sultation with the late J. Pierpont Nor
gan, announced that the government
had agreed to dispose OF a httIe
| in excess Of So 100000 of 1 per cent
lthirty-year bonds. and the Treasury
reserve had then been reduced to S4l'-
430, 1Sl. BY the purchase of these bonds
on terms specified, the syndicate Cd
tanned virtually a $40 per cent invest
ment in government securities, put
agreed to protect the Treasury from
gold Withdrawals during the life oil the
contract. In order TO do this the syn
dicate sold foreign exchange at hg-
ures that made il Improbable TO eX-
port gold. Following the adjournment
Of Congress, on March !, the stock
market became active and a bull move
ment got under way, but in June re-
action began and, the syndicate ap-
parently having oversold exchange the
outflow of gold was renewed. That
same year the Venezuelan crisis oc-
Cured. and on December 3, in his an
nual message to Congress. President
Cleveland made public the information
that Great Britain had made demand
on this country to arbitrate dispute
in which she was engaged with Ven
ezuela in reference TO the boundary
line between that republic and British
Guiana On December II the Presi-
dent forwarded to Congress word that
the proposals had been rejected, and
declared that he believed that after
| such determination had been made IL
would be the duty of the United states
TO resist British aggression.
This. Of course, practically meant
promise of war in the event of Great
Britain's refusal to accept our view
and when the news reached the stock
market there was sharp decline
throughout the list. The fear OF war
was a severe shock to the financial
centres abroad as well as here, and on
Friday, December 20, stocks dropped
| from ; to 10 points and call money
went up to 90 per cent, accompanied
| by a report that London would with
draw her American credits. Gold re-
serves began a rapid dimnution' ana
December % on the announcement that
| the President had determined on a
| fresh bond issue and that the Clearing
| House had authorized loan certificates
the Generalization was checked ana
+ the market took a sharp rise. on jan
uary >, 1896, proposals were invited for
! S1O0,OO0,0O0 per cent thirty-year
bonds, and a month later, when the
bids were opened, 1t was found that
the bonds had been six times oversub-
scribed. This replenished the gold re-
serve, and since that period the re-
serve has never been in serious peril.
During 1896, Notwithstanding the
success Of the government loan. the
Baltimore & Ohio went into the hands
of receivers, and the stock sold down
from 3jla to 1Gla in a week. The free
silver movement seemed 10 paralyze
trade, bank clearings and railway earn
| ings fell away. textiles. iron and steel
sold lower and lower, credit contracted,
mills and factories closed down. An
army Of unemployed and the farmers
] burdened with mortgages and suffering
dismay, and during the months up 70
the election in November the country
was in the throes of distress.
Regardless of the extreme darkness
that overhung the investment market
and general business from 1893 to 1897,
the most remarkable expansion began in
/ the spring OF 1891 that had been
known in the history Of the United
States. and the credit Of this country
rose to its highest point during the fol-
| lowing ten years. Higher levels were
established in all classes Of securities
and fundamental conditions were i'm
proved proportionately until the panic
of 1907 occurred. There are many
| people to-day who seem to see nothing
| but cloudy future, who argue that
the best days Of Wall Street are over
and that so much uncertainty sur
rounds the investment market that II
is not safe TO purchase securities. 1t is
only necessary to glance back to those
weeks and months Of seeming dispar
which interviewed between 1893 and the
| fall of 1896 To obtain some consolation
and an inspiration OF hope regarding
| the future. 1t is admitted that all IS
not clear with the new tariff to be tried