Year: 1875

the Union. ------ &C.,





DUNCAN, SHERMAN & co.


There are times when most of US, even
men of steel nerves, weaken and, so to
speak, close our grip" To do this is to
confess vulnersbility which seals the fate
of banker or commercial man of the
present day, whose chief capital consists of
the credits he is able to maintain in the
marts of the world. Credit is built up
largely of ''cheek" or pretense, when
coupled with promptitude in the payment
of all obligations. To be the known pos
sessor of boundless wealth does not consti-
tute credit either at the banks or upon
Change. Thequestion is: Does he prompt
ly pay his promises at maturity Ifhe does,
his credit is good and his paper is negotiable.
Men are rarely credited on account Of
their known responsibility. Capital does
not want the trouble of coercion. Prompt
and willing payment at maturity with the
rate agreed upon for its use is what sus-
tains the credit of house or of an indi-
vidual in financial and commercial opera
tions. .


But when a firm, which has ever en-
joyed an unlimited and unquestioned credit,
loses it grip or nerve so much as to ac-,
knowledge its momentary weakness and at
the same time solicit aid to bridge over an
acknowledged chasm, it is "gone up"
The quicker it succumbs the less disastrous
will be its fall.


If Mr.. Duncan had not made the ac-
acknowledgement that he was really in need
of permanent aid he could have raised the
necessary millions on the unsuspected credit
of his house. But the moment he pro-
claimed his insolvency confdentially to
those friends whom he knew could lend the
required aid they took the alarm, and not
only refused the money, but privately. of
course, cautioned their immediate friends
to ''pass" the paper of the firm. The fair
fabric of the credit of one of the heaviest
firms in New York was blown out with q
breath. Yesterday worth nsmeless mil
day, not paper dollar. And such
is imitation ! This is credit 1t is the diff
ference between promise to pay gold and
the payment of gold ITSELF In the one case
there is room for doubt in the other there
is certainty.


The failure of such a firm as that of
Duncan, Sherman & Co. at this time is
greatly to be deplored, in so far as it may
add to the timidity of capitalists and check
that returning confidence so necessary to
the free investment of money in wealth.
creating enterprises. 1t is to be hoped that
it portends no widespread disaster like the
panic of 1878. We shall not be surprised,
however, 10 hear of the failure of more or
less of the cotton-speculating houses both
North and South. A fall of three cents in
the pound, with q stoppage of thirty
thousand spinners IN England for an indefi-
mite period, are of themselves an alarming
feature in the formation of prices for the
incoming crop. Whenever the labor
of the cotton zone shall be again as fully
employed in the production of cotton as it
was before the war, our crops must be
greatly increased in volume. With such
increase it is but natural to look for a re-
duction in prices to something near the
ante bsftum 1evel. IF the English spin
ners cease their demands for three months
it should not surprise us to see our great
staple hunting market at 8 to 10 cents
per pound. If we assume that the cotton
factors OF New Orleans and New York
have already advanced these figures upon
the incoming crop, we must look for some
smashing and crashing in that trade before
the freights, insurances, storages and COM
missions are paid. Meanwhile the crop
is reported TO be, especially in Alabama,
the finest ever made. If it is safely gath
cred it will afford splendid showing of
exports.


The failure of Duncan, Sherman & Co.
may serve to open the eyes of cotton spec
ulators to what is impending, and induce
such reflection and caution of movements
as TO enable many to ward off disastrous
consequences. With that firm failure was
only question of time, and that probably
but few weeks at most; for the decline in
cotton, which may be deemed assured by
the shutting down of the British mills and
the abundant yield of the incoming crop,
would inevitably have caused it to sue
cumb. The increase of production in cotton
exceeds the enlargement of the demand
for consumption. Africa and India have
now fairly entered the field against US as
producers, and although they cannot com.
pete with our fine quality as yet. their low
grades come in such volume as to cheaper
prices of our superior fibre. ...a


We arc no alarmists. We simply present
the common-sense thoughts which are sug-
gested by the failure of one of the largest
cotton firms in the country and the
deductions which, as appears to us, may
be logically drawn from the facts. The
whole shows us one of the methods by
which commerce endeayors occasionally to
purify itself Of the demon of imitation.