Year: 1871


feather which breaks the camels back, and
this, perhaps, is not inapplicable to the great
disaster at Chicago and the financial condi-
tion of the country. That calamity may prove
the additional weight which, bearing upon an
unhealthy and abnormal state of things, may
PROSTATE many business establishments and
create financial revulsion. We hope 1t may
not be 80, but there are indications Of coming
evil. A sudden loss Of seventy-five millions,
q hundred millions or more Of property,
whatever the amount may be destroyed at
Chicago, woald At any time produce
disturbance of the money market; but
under ordinary circumstances, when business
! and the financial condition Of the country are
good, there would be NO great revulsion. Both
tive energies are extraordinary, and the effect
Of such catastrophe under favorable state
of things generally could only be temporary
and limited. At present, however, there is
reason to fear the consequences may be more
serious and wider spread. We would not ex-
cite unnecessary apprehension, and think,
really, that the general estimate Of the loss at
Chicago is much too large; yet we caution
business men and the public to be prepared for
the worst.


1t is evident from the perturbations In Wall
street that the capitalists and spectators
there are in q state Of trepidation. We
may say, indeed, there is a panic
| Money is scarce and at q high rate
| of interest," and stocks have gone down with
a rush. In fact, the effects we see are far
greater than that one cause Of the Chicago
| fire, though that is doubtless the moving or
stimulating cause. We must look for other
causes as well for the existing financial pres
sure and general apprehension. The eight or
more insurance companies in this city that
have either failed or suspended will proba-
bly, place some Of the banks in critical situ-
alton. Indeed, it was understood last night
| that the Stuyvesant Bank had suspended, and
it was said several other banks were likely to
follow. There is no telling how far the crash
may extend. But, as was said before, we
must look to other causes for this state of
things beside the Chicago fire.


Let us look, then, at these other proximate





general. The banks of New York have been
extending their loans of late beyond the limit
of prudence for speculative purposes. The
average loans in September amounted to three
hundred and ten millions, whereas the usual
average had not exceeded two hundred and
sixty millions. Here was an expansion of
| fifty millions. The banks have, consequently,
been brought to the verge Of their reserve, if,
indeed, they have not gone beyond. They
have been accommodating their friends for
stock speculations upon fuctuating or fcti-
tious values. We have over and over again
and for some time past warned them Of the
danger of expansion, of the peril they run in
aiding the stock spectators. They are now
in dilemma. Stocks generally have fallen
from ten to twenty-five per cent, and some
more than that, since the bank expansion cul-
minated two or three weeks ago. If they call
in their loans now they would precipitate
| crisis in the market. Of course they are
afraid to do this. Then, again, can they bear
the pressure and tide over the still declining
market? Every way they are in a critical
situation.


A more remote but direct cause of the
trouble now in the money market, and
of the greater trouble portending, is
the miserable financial scheming and
operations of the Secretary Of the Treas
ury He has been intent on making political
capital for himself and the administration, by
floating loan for refunding portion of the
debt, without regard to, or knowing anything
about, the financial condition or prospects of
the country. He flooded the market with
money at one time for this purpose, and
brought it down TO two per cent interest. 1t
was just at this time that he and the admins
traton organs made loud trumpet blast,
which sounded from one end Of the country to
the other, about the wonderful success Of the
new loan This was claimed to be the acme
of financial skin. But it did not bring down the
capitalists of Europe or this country. After the
screws had been put to the national banks,
and they took seventy millions of the new
loan for conversion of the six per cents they
deposited as security, the Syndicate was con-
cocted for placing the balance Of hundred
and thirty millions out of the two hundred
millions of new FIVE per cents. The loan thus
assigned to or taken up by the Syndicate was
drug on the market from the first, and Mr.
Boutwell, has been straining all his efforts to
give It character and keep it afoat In doing
this be has kept The money market inflated
and stimulated bank expansions and stock
speculations. At last the reaction has come.
Mr. Boutwell, cannot keep gold down nor gov
ernment securities up to the point where the
loan can be foated or the debt refunded ac-
cording to the conditions of the act of Con-
gress. He has, in fact, fearfully demoralized
the financial affairs Of the country and the