16377. New York Warehouse & Security Company (New York, NY)

Bank Information

Episode Type: Suspension → Reopening
Bank Type: private
Start Date: September 8, 1873
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: c5d3f6dc

Response Measures

None

Description

Contemporary articles (Sept. 8-19, 1873) report the New-York Warehouse & Security Company formally suspended in early September 1873 because of heavy loans to railroad enterprises (Missouri, Kansas & Texas R.R.) and loans to/director guarantees for Francis Skiddy and Sheppard Gandy. A creditors' meeting/extension was sought; no article in the provided set reports a receivership or permanent closing of this specific company, so the most likely classification is a suspension with intent to reorganize/seek extension (suspension with eventual reopening). Some pieces mention runs on related institutions or a run on depositors generally in the panic, but the primary event described for this bank is suspension due to adverse bank-specific exposures rather than a discrete depositor panic. Dates are taken from the publication dates and in-text references (Sept. 8–9, 1873).

Events (1)

1. September 8, 1873 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Large loans and paper outstanding tied to the Missouri, Kansas & Texas Railway and loans to/director guarantees for Francis Skiddy and Sheppard Gandy; unable to meet maturing paper given illiquidity of those railroad securities; directors resolved to suspend and call a creditors' meeting to seek an extension.
Newspaper Excerpt: The practical suspension of the New York Warehouse and Security Company, with which Mr. Francis Skiddy and Shepard Gandy are identified.
Source: newspapers

Newspaper Articles (10)

1. September 9, 1873 New-York Tribune New York, NY

Article from New-York Tribune, September 9, 1873

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A WALL-ST. CRISIS. THE DECLINE IN GOLD WORKS RUIN. SUSPENSION OF THE NEW-YORK WAREHOUSE AND SECURITY COMPANY-A MILLION INVOLVEDSUGAR MERCHANTS EMBARRASSED BY RAILROAD SPECULATIONS- MR. LAMONT'S LAST 'BOOK." The sensational events of the past week in Wall-st. culminated yesterday in a further deeline of gold to 112g, and the formal announcement of the suspension of a heretofore sound financial institution, with the probable failure of two heavy the stock and merchandise operators. With opening of business on the Stock Exchange a series of alarming rumors were set in circulation. Failures of wealthy merchants and bankers were freely reported by the bears," and there was a general rush to sell stocks. Prices deelined from t to 14 per cent. and the whole list was affected. Subsequently, however, there was a marked reaction and a better feeling prevailed. On Saturday morning. the rumors of impending evil which had been causing uneasiness in Wali-st. began to take shape, and suspicion was directed against several houses which as yet, however, have not shown any symptoms of weakness. Great uneasiness prevailed, and on Sunday evening large number of operators who had gone to Long Branch arrived in this city, determined to be on hand, and to avail themselves of the earliest phases of the market in the morning. This select circle of operators had received special information, and had come to the city with the view of selling out their long" stocks, and going short of others. Their information had come from peculiar sources, and was tinged with almost tragle interest. MR. LAMONT'S LAST SCHEME. It appears that the late Charles A. Lamont two days before his death had received intimations of the embarrassments of a financial institution, and with the char acteristic shrewdness of stock operator had promptly determined to turn the information to his own benefit. Knowing the depressing effect it would have upon the stock market, he went short of long line of stocks, amounting to many thousands of shares, and bought " puts" for about as much more. He then telegraphed to William R. Travers, his broker and partner, and some other friends to come to this city, with a view to as sisting him. At this interview with his broker and friends he im parted the information that it was the New-York Warehouse and Security Company of No. 26 Pine-st. which was in trouble, and that Francis Skiddy and Sheppard Gandy,two extensive sugar dealers, were also seriously, if not irretrievably involved. It was just after this terview that Mr. Lamont came to his untimely end. After the discovery of his body in the area, the news of his last financial and stock operations spread rapidly until they reached Wall-st., when other heavy sales were made with the effects noted above. It is alleged that when Mr. Skiddy discovered his precarious position be sought Lamont, with whom he had business relations when the latter was in the sugar business, under the name of Plume & Lamont. Telling him of his circumstances, he was imprudent enough to say that unless relief were extended he himself, Gandy, and the Warehouse Company would have to go under. It 18 reported that Mr. Lamont requested Mr. Skiddy to call again on the morrow. In the mean time Mr. La mont made his book" on the stock market as noted above, and when Mr. Skiddy called, informed him that nothing could be done for him or Gandy. The theory is that he intended to use the failure of Skiddv. Gandy, and the Warehouse Company as means of breaking the market for the profit of the bears." Mr. Lamont's friends, however, indignantly deny this story. SUSPENSION OF THE WAREHOUSE AND SECURITY COM PANY. Application was made to the officers of the New-York Warehouse and Security Company of No, 26 Pine-st., for information. The office was strangely quiet, and the two or three persons apparently connected with it were preoccupied and nervous. The doors were thrown open, but no business was apparently proceeding. An inquiry for the officials elicited a reference to a Mr. Johnson who stood in a corner talking with another person. Mr. Johnson declined to answer any inquiries and hurriedly retired from the reporter's presence to the back office, which was divided from the clerical department by ground-glass partitions. Through these partitions, ever, several men were to be seen, apparently engaged of in earnest discussion. Turning to another attaché the office, the reporter again applied for information, but was refused, with the accompanying remark, that if there was anything to impart, it would be given after 3 p. m. Leaving the uncongenial atinosphere of the Company, the reporter sought other sources of information. and elicited the fact that the troubles of the Company were due to its relations with several of its directors. It appears that Francis Skiddy, importer of No. 101 Wall-st. and Sheppard Gandy of No. 60 Wall-st. both heavy sugar importers, were directors of the New-York Warehouse and Security Company and also directors of the Missouri, Kansas and Texas Railway Company now in course of construction. They had invested 80 heavily in this road and elsewhere that their large resources and excellent credit could not carry them through, and they therefore obtained loans from the Security Company on the stock and bonds of the latter and other corporations. The Warehouse and Security Company, however, had a large amount of paper in circulation which was about to mature, and unless some of the loans which it had made to Messrs. Skiddy and Gandy were taken up they could not meet their obligations. Frequent consultations were held, but without satisfactory resuits, as the disordered condition of the money market and the fact that the Kaneas, Missouri, and Texas se curities were not negotiable in Wall-st., precluded the making of loans in other and less partial quarters. A meeting of the directors had therefore been called yes terday morning, and it was resolved to suspend temporarily and call meeting of creditors on Thursday to take action in the matter. Returning again to the office of the suspended Warehouse and Security Company, the reporter this time sought the Secrotary, D. B. Bell, and resumed his inquiries. Mr. Bell said that it was true that the Com pany was in some embarrasement in consequence of the fact that it had made loans on securities W which were not immediately available, and at a meeting of directors in the morning it had been resolved to suspend, in order that justice might be done to all the creditors, a meeting of whom would be held on Thursday, at which an extension would be asked. In response to inquiries he that the loans were made to a number of Southern said and Western railroads. He could not specify particular road or amount, nor could he give any statement the Company assets or liabi lities. He said the Company had been operation about ten years administration The present with about the same Moses were H. Johnson, Francis Skiddy, directors Lazarus. Sheppard Gandy, Guton of Williams Guion, and Charles Luling. H A. Johnson is the President. The capital stock of the Company $1,000,000. half which is held by the directors. No deposits were re- to ceived, the principal business the Company securities being on proper lend its paper and funds to dealers and the ex paper was held by wealthy persons, tension This asked for would probably be granted. The Comwould undoubtedly pay dollar for dollar pany failure the Warehouse and Security Company was 'As attributed the to its relations with the Missouri, Kansas and Texas Railway Company applicat information was made to for officials of the latter corporation the the Vice President. and H. B. Heuson, Denison, George said that the Missouri, Kansas and Texas the Secretary Railway Company had not gone to protest that its coupons had been and would be paid. The Company was the Warehouse and Security Comunder no obliga tions relations and the ramor that there were any pronof pany, from the fact that two prominent directors ably arose who were also directors of the the Railway Company Warehouse Company, were said to be embarrassed. STATEMENTS OF SKIDDY AND GANDY. Franeis Skiddy is the head of the firm of Skiddy,

2. September 9, 1873 The Sun New York, NY

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AND MONDAY, Sept. 8-P. M.-Wail street was full of speculative excitement, and the operations, more expecially at the Stock Exchange, were of unusual magnitude, having been greater in volume than observed for many months The stock market opened feverish. and with a general selling movement inaugurated in West ern Union, Pacific Mail, Lake Shore. New York Central, and Ohios, the remainder of the list submitted to a sharp decline, which frightened holders into throwing overboard their speculative ventures without regard to cost. Western Union fell off to 88 1/2 Union Pacific, 24% Lake Shore, 9014: New York Central, 102% Ohios, 37 14; Wabash, 644 Rock Island, 105% and Northwestern, 59% The practical suspension of the New York Warehouse and Security Company, with which Mr. Francis Skiddy and Shepard Gandy are identified. added to the general demoralization, although for several days this denouement in private circles has been expected. In the final dealings, however, there was a general recovery and a better feeling prevailed. Attention is invited to the comparative table annexed for the extreme range of fluctuations in the leading stocks. The excite. ment at times was intense The total number of shares dealt in was 210,852 of which Western Union represented 74,100 Pacific Mail. 30,500: Lake Shore. 131.960: New York Central 17,860: Omios, 13,100: Union Pacific, 10,900 ; Rock Island. 9,000: Erie, 6,510; St. Paul, 6,200: Wabash. 6,100 C., and 1. C.,3.000: Northwestern, 2,800 ; Cleveland and Pittsburgh guaranteed. 1,410, at 863.40 87; Panama, 900: Harlem, 600: American Ex press. 405 Atlantic and Pacific preferred 400: Northwestern preferred. 400: United States Express, 300: Canton 200 at 98: Ohio and Mississippi preferred, 200 at 70: St. Paul preferred. 100. Adams Express. 100: New Jersey Central 400: and Hannibal and 81. Joseph. 100. The operations in gold were attended by less excitement than on Saturday, and the Huctuations, though reflecting a downward tendency, were less wide and frequent. The elique still continued to sell out their pool gold. and have to-day nearly. if not quite, closed out their combination contracts. The price further declined to 112, as against 112% at the opening. but afterward reflected a slight reaction, and closed at 112% There were no new features beyond those already given. but the active speculation in this market is practically over. In gold loans the rat b paid for having palances carried ranged from flat for immediate delivery to 6 # cent., and afterward from 1.32 to 1-13, with unal negotiations at 1.32, 5, and 3 & cent. The total clearings at the Gold Exchange Bank were remarkably large, and amounted to $212,746,000 Build

3. September 10, 1873 The New York Herald New York, NY

Article from The New York Herald, September 10, 1873

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UNABLE TO PAY. The Suspension of the New York Ware house and Security Company-Its Assets and Liubilitics-How They Are Involved. Further investigations into the reported failures published in yesterday's issue of this paper prove that as far as the New York Warehouse and Security Company is concerned the information about its suspension was correct. Mr. Bell, the Secretary, would make no other statement than that already given by him. The status of the Company's financial condition will be given to-morrow at the meeting oi creditors which has been called for that purpose. Mr. William H. Guion, one of the directors of this company, makes the following statement:-"Theassets of the New York Warehouse and Security Company amounted to about $2,500,000; but without looking over the books he could not state how much of this was in the form of unpaid loans. The liabilities of the company were in the vicinity of $1,300,000. The Missouri. Kansas and Texas Rallway owed the company $1,000,000, one hall of which was secured by bonds of the road and notes of the LAND GRANT, RAILWAY AND TRUST COMPANY, and the other half by the personal guarantee of five of the railroad directors, two of whom were Messrs. Francis Skiddy and Sheppard Gandy, who are likewise directors in the New York Warehouse and Security Company. Three more of the directors are responsible, but the amount of their guarantee is not officially known. Francis Skiddy is President of the Land Grant, Railway and Trust Company, and it is presumed that the stock of this concern, which recently sold as high as 165. is not worth nearly as much now, and it is doubtful whether it would sell at present at par, since the suspension of the Warehouse Company. It is supposed that the notes of this corporation held by the lormer company will cover all tue liabilities. At the creditors' meeting to-morrow it will be ascertained whether THE SUSPENSION OF THE WAREHOUSE COMPANY will be only temporary or final, as everything depends upon their action. The loan of the last named company, which will mature next month, would, in Mr. Guion's opinion, be good within a year at least. The Missouri, Kansas and Texas Railway is completed and doing a large business, which yielde heavy returns. Already $12,000,000 or its bonds have been negotiated, chiefly in Europe, leaving $3,000,000 which the company had been unable to place. If these were not taken abroad they would be sold here to stockholders of the Land Grant Company, to pay off the bonded debt of $15,000,000. The Warehouse Company also made a loan of $200,000 to the New Orleans, Mobile and Texas Railroad Company, whose road IS not completed. This loan matured last spring and remains unpaid, but IS secured by the personal guarantee of two persons connected with the road, and Mr. Guion believed that the Warehouse Company would eventually obtain the money. He further said that the Warehouse and Security Company made a loan of $50,000 to the West Wisconsin Railroad, which is secured by the bonds of the road and the personal guarantee of one of its officers. This loan was good, but had not matured. and the same was true of loans made to several other railroad companies. In regard to the reported failures of Messrs. Francis Skiddy and Sheppard Gandy nothing further has been ascertained. The latter days that many erroneous statements have been circulated, but he did not feel willing to make any explanations at present. He did not know whether he would be compelled to suspend or not.

4. September 10, 1873 New Orleans Republican New Orleans, LA

Article from New Orleans Republican, September 10, 1873

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NEW YORK. Suspension of the Warehouse and Befue rity Company. NEW YORK, September :- appears that the grouble in the New York Ware house and Security Company arose from de lations with two of its directors, Francis Skiddy, importer, of No. 10g Wall street. and Shepherd Gandy, of No. 60 Wall street, both heavy sugar importers, They svere directors of the New York Warehouse and Security Company, and also directors of the Missouri, Kansas and Texas Railroad Company, now in course of construction. They had invested 80 heavily in this coad and elsewhere that their large resources and excellent credit could not carry them through, and they therefore obtained loans from the Security Company of stock and bonds of the latter and other corporations The Warehouse and Security Company. however, had a large amount of pape? in circulation, which was about feature. and unless some of the loans which st bad made to Messrs. Skiddy & Gandy were taken up they could not meet their obligations Frequent consultations were had, but with out satisfactory resulte, as the disordered condition of the money market and the fact that Kansas, Missouri and Texas seo curities were not negotiable in Wall street precludes making loans in other and less partial quartere. A meeting of directors had, therefore, been called gesterday morne ing, and it was resolved to suspend tempse rarily, and call & meeting of the on Thursday to take action In the matter Francis Skiddy is the head of :he firm of Skiddy, Munford & Co., of No. :0: Wall street, who are among the heaviest importe ers in this city. Mr. Skiddy has been iden tified with the steamboat. railroad and other interests for many years. and his has always been a good name for financial strength. Sheppard Gandy is a member of the firm of Sheppard Gandy & Co., of No. 60 Wall street. Neither of these houses base suse pended as yet. A director of the New York Warehouse Company states the company's assets are about $250,000, but does not know how much of this is in the form of unpaid loans. The liabilities are $13,000,000. The Missouri, Kansas and Texas railroad owes the company $7,000,000, one-half of which was secured by bonds of the road and notes of land grants to the railway and trust company, and the other half by the personal guarantee of five of the railway directors. Two of these were Skiddy and Gandy, directors also of the warehouse company. The notes of the land grants of the railway company of which Skiddy is the president he considered to be good. The warehouse company also made a loan of $2,000.000 to the New Orleans, Mobile and Texas railroad, not yet completed. The loan matured last spring, and has not yet been paid, but is secured by personal guarantes. A loan was also made to the Wisconsin railroad, amounting to $50,000. which loan was good, though not yet matured. The same was true of several other railroads. Whether the suspension of the warehouse company be tempory ordinal de pends entirely on the decision of its creditors. Susan Coates, the baby farmero was 90. day released on bail, two physicians testio fying she did no wrong. The President Invited to Attend the Mexi can War Celebration Commodore Meade and other officers Vis ited the President to-day with an invitation to join them in celebrating the anniversary of the capture of the City of Mexicco An Appeal 1or Aid. An appeal for aid for the destitute who were burned out of their homes by the Plaza Vapor fire, which involved a loss of $8,000,000, has been made by Alexander & Sons. owners of the Havana steamship line, of this city. The firm was to-day appealed to by telegram from Havana, the dispatch stating there is great destitution there. Suits Against the Erie Railroad. It is stated that a number of suits by Jay Gould will soon be brought againt the Erie Railroad Company, and the directors personally, for alleged illegal acts done in connection with the recent declaration of dividends. New York County Affairs. Controller Green has communicated to

5. September 18, 1873 New-York Tribune New York, NY

Article from New-York Tribune, September 18, 1873

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WALL-ST. ALARMED. A BREAK IN THE MARKET. STOCKS DECLINE FROM 1 TO 71 PER CENT-THE NEWYORK AND OSWEGO MIDLAND RAILROAD GOES TO PROTEST-GROUNDLESS REPORTS OF OTHER FAILURE8. The "bears" held high carnival in Wall-st. yesterday. With the opening of business on the Exchanges they began the circulation of doleful rumors of more than ordinary calamities throughout "the street." Impending failures of extraordinary magnitude were mysteriously hinted at early in the morning, but no positive details could be gleaned. As the day wore on, however, the names of several railroad companies became linked with the evil rumors, and reports of the failure of their promoters were freely circulated where they would do the most harm. New railroad companies, with incomplete or freshly completed roads, were fiercely assailed and with great effect in the stock market. The rumors of the previous day in relation to the entanglement of the Chicago, Rock Island and Pacific Railroad with the Canada Southern Railway were revived, and it was freely asserted that the former had loaned large amounts of money to the latter, in order to enable it to pursue the work of construction. This rumor, however, was officially denied by the officers of both companies. Each rumor seemed tolgrow as it proceeded from mouth to mouth, and the general result was a feeling of depression and distrust even in the minds of the most sanguine. The more conservative were at first disposed to resist the coutagion, but the ofttold stories of dishonesty and disaster proved too much for their logic. Whenever the public-spirited "bull" ventured to speak of the ** glorious future of the great Republic," he was met with the familiar details of the ruin of the Brooklyn Trust Company, city defalcations, the arrest of City Treasurer Sprague and his accomplice Rodman, the failure of the New-York Warehouse and Security Company, the embarrassment of Messrs. Skiddy and Gandy. the entanglement of the Missouri, Kansas and Texas Railroad, the suspension of Kenyon Cox & Co., and the troubles of the Canada Southern Railway. If the " bull " in an enthusiastic and prophetic outburst dwelt upon the good time soming, he was silenced by the hard logic of the facts of the demoralized present. At about noon it became generally known that the New-York and Oswego Midland was the railroad company in trouble this time, and it was asserted that George Opdyke & Co., who were its financial agents, had suspended, or were about to do so. Inquiry developed the fact that the construction and equipment "paper" of the Company had gone to protest, but that George Opdyke & Co. had not suspended and were doing business as usual, though greatly annoyed by the irritating rumors in circulation about them.

6. September 19, 1873 The New York Herald New York, NY

Article from The New York Herald, September 19, 1873

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FEELING ON THE STREET. On the 8th inst. the New York Warehouse and Security Company, a monetary institution, in Pine street, established for the purpose of advancing money on collaterals, suspended payment, and it was alleged as the cause that they had loaned money on securities from the Kansas, Missouri and Texas Railroad, which were not met, and in the vortex of destruction Francis Skiddy and Shepard Gandy were reported as mixed up and as having "gone by the board." Speculations in sugar and Pacific Mall were likewise quoted as having been the primary cause of the suspensions, all of which were duly reporte1 in the HERALD of the 9th inst. At that time a prominent banker, who was interviewed by the writer upon the subject of the failure, gave it as his opinion that the beginning of the end had only just commenced, and before the end or September was reached not only the city of New York, but the whole country, and mayhap Europe, would be convulsed with A GREAT FINANCIAL PANIC. The gentleman based his premonitions on the reckless manner in which money was invested in wild-cat speculations, especially in the building of railroads which had no visible means of support, and the loose manner in which financial institutions loaned money on flimay securities. How well the prognostications of this gentleman are verified was painfully visible in Wall street and vicinity yesterday, as made apparent by the suspension of Messrs. Jay Cooke & Co. and others who are named above. HISTORY REPEATS ITSELF. In 1857, on the report of the suspension of the Ohio Life and Trust Company becoming known, the panic which was engendered thereby must still be fresh in the minds of all business men. The ruin which it wrought was not confined to one locality, but had its disastrous effect upon the entire country. Small iry-financial houses made this failure a pretext for suspension, and the effects on commerce were felt for three years after, when the late rebellion brought back similar scenes by a general suspension of specie payment in 1861. Passing rapidly over the stirring war scenes, in field the as all as in financial circles, superinduced the great fluctuations in gr by successes or reverses experie by our armies in the field, we come to the ever memorable Black Friday. and since then comparative quiet has

7. September 25, 1873 New-York Tribune New York, NY

Article from New-York Tribune, September 25, 1873

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# THE PRESS ON THE PANIC. VIEWS OF THE SITUATION ON ALL SIDES. A BLOW TO ILLEGITIMATE BANKING. From The St. Louis Democrat. A prophetic article under the above caption appeared in THE NEW-YORK TRIBUNE of Tuesday last. It recounted the failures of the Brooklyn Trust Company, the New-York Warehouse and Security Company, and Kenyon Cox & Co., all of whom recently suspended. The cause of failure in every instance was a departure from the line of legitimate banking business, and trading in speculative railway shares. One bank undertook to build the New-Haven, Middletown and Willimantic Railroad. Another made heavy advances to the Canada Southern, and a third undertook to float some Texas, Alabama, and New-Orleans Railway enterprise. TO THE TRIBUNE'S question, "How many more examples will be needed before the lesson is learned?" come the responsive occurrences of the past few days. One after another have the supposed strong men of Wall-st. succumbed to the pressure, and it seems now to be highly probable that the whole class of bankers who have made it their business to divert the capital of the country from its legitimate uses will be overtaken with bankruptcy. The banks of the country are organized and sustained primarily for the purpose of affording facilities for carrying on the mercantile and manufacturing business of the people. When densely populated communities require additional means of transportation, and it is demonstrable that there is a present demand for railways which will unquestionably pay a profit on the investment, it is right for banks and capitalists to encourage such enterprises. It is different when calls are made for money to build railways in all sorts of out of the way places, where there is no population or trade to sustain them. To such applications, sound bankers will turn a deaf ear. Just at the time, however, when the available funds of the country are needed to move the crops of the West, it is ascertained that some of the custodians of the currency in Wall-st. have been scattering the money of their depositors to supply the demands of moonshine railway schemes in all parts of the land. Banks doing such a business must necessarily discourage applications for loans made by merchants and others engaged in legitimate enterprises. Such is the tone of THE TRIBUNE'S article, which appeared two days before the house of Jay Cooke & Co. closed its doors. Other banks that have done business after the same fashion must go the same way, and the houses which withstand the storm will be found to be of that class which is unwilling to hazard the funds of depositors in reckless speculations for large gains, and whose managers have anticipated and provided for emergencies like the present. The views of some of our leading bankers and merchants, which are given in our local columns this morning, will be read with interest. The general tone of opinion in St. Louis financial circles is one of confidence, and this confidence in the stability of our credit, and the soundness and strength of our business men, is well grounded in the knowledge that our bankers and merchants and manufacturers are men of rare sagacity, sound judgment, and unimpeachable integrity. Let croakers and grumblers take off their hats and make their profound acknowledgments to the much abused conservatism of St. Louis. # AN ADMONITION TO SECRETARY RICHARDSON. From The St. Louis Republican. "The Treasury comes to the relief of the banks," is another announcement that will make many an elderly gentleman think twice, and wonder how this transaction can be simmered down to the financial maxims he learned years ago in the school of hard money. The Treasurer will buy ten millions in bonds, and then, if further relief is needed, will open the flood-gates of his legal-tender reserves. That is to say, the Government is the banker of the bankers. The bonds in this case become mere certificates of deposit, and their presentation is a check drawn on the Treasury. This is the first time the Government has been called upon to act in this capacity to any extent, as Black Friday was not a currency panic requiring disbursements to ease the market, but a gold stringency, requiring sales of coin to enable parties to cover contracts. On Black Friday the Government went into Wall-st. as a "bear," and took a tussle with the "bulls;" nothing more. Now it is simply paying the checks of its depositors like any banker, and the banks are making a run on the Treasury much like the people are making a run on them. This suggests the inquiry, Can the Treasury stand the run? The answer is that there are $14,000,000 of currency in the Treasury, and a "reserve" of $44,000,000 beside, all of which is at the disposal of Secretary Richardson. Undoubtedly this $58,000,000 of resources will be enough, and more than enough to meet the present emergency. But there are some billions of representative values afloat, the bulk of which is arbitrary and to a great extent fictitious. Suppose a big tumble, say of 20 per cent on the whole amount, should come one of these days? Its coming is not an impossibility. Twenty per cent depreciation on all the paper values that are afloat would make Mr. Richardson's $58,000,000 sing small. Now, then, in view of the admonition we have just received, and admitting that Secretary Richardson is the banker of the bankers, wouldn't it be well to see our way a little clearer than we do now out of financial troubles that are not by any means impossible and scarcely improbable in the future? # RIGHTS OF THE GOVERNMENT. From The Columbus (O.) State Journal. The Government has no more business to interfere with the New-York stock market than it has to buy the exhausted claim of a California miner in order to save him from "breaking." It is a lunatic notion that the Government should have power, at its sweet will, to go upon the street with a thirty million increase in the volume of currency. There would be an end to everything like a standard of value if such a practice were tolerated as among the possibilities. It is bad enough to have the fluctuations inseparable from our departure from a gold basis; to add to this an additional element of uncertainty and fluctuation, in the shape of a floating volume of $30,000,000, to be thrown hither and thither at the will of the secretary of the Treasury, in such quantities as no man could compute and at such times as no man could conjecture, would be equivalent to giving the Secretary power to announce each day, at his pleasure, any length of yardstick, and any weight of pound, he might fancy, and require the contract of yesterday, with the yardstick at three feet, to be executed to-day upon a yardstick of four feet. # A NOVEL VIEW OF THE CRASH. From The Cincinnati Gazette. This crisis was not brought on by an unusual expansion of credit in the general trade, nor by stock speculation, nor by "bubble banking," or banking without capital. Its very few victims were of the strongest houses in the country. It was caused by extensions of credit to legitimate railroad enterprises, for their construction or equipment. It is the furthest possible from any collapse at which people should rejoice, or of unwholesome speculation. True, it is said, these railroads are in advance of the wants of the country. But is not that the American custom? It is generally found that the railroads themselves fetch the country up to their advance. We go so far as to build railroads to settle a country. Jay Cooke's was one of this character. And this was not without a substantial basis, for it has a land grant estimated at 47,000,000 acres by those who profess to think it so valuable that this failure will be good fortune to the nation if it gets back the land with the loss of the road. # A SIGNIFICANT FACT. From The Boston Globe. By and by we shall begin to see where the lightning has really struck. The prostration of the great house of Jay Cooke & Co. can scarcely be ranked as a national misfortune, although it excites some sympathy everywhere. The Cookes took the responsibly of putting through a railroad that ought never to have been begun, and they must pay the penalty like any other unwise investor. There is a single fact in connection with their failure, which is of particular significance. They carried down with them the First National Bank in Washington, a concern which has been known as the "Ring" bank, and it is barely possible that an investigation of the affairs of this concern, which figured prominently in the Crédit Mobilier investigation, last Winter, as having been Mr. Colfax's banking-house, may lead to some interesting exposures. # CHARACTER OF THE CRISIS. From The Springfield Republican. The failure of another great bond-burdened house, Clews & Co., signalizes more pointedly, if possible, the character of this crisis as one brought on by attempting to carry new railroad loans. It does not seem as if there could be more bubbles to burst, and a reaction is likely, to-day. The opportunity for investment must soon draw to New-York capital sufficient to restore "organic action," as the doctors say. Meantime, we are glad to see that the President, who learned considerable finance by his Sunday experience, is expressing unusually positive and judicious views on the sub-

8. September 26, 1873 The Andrew County Republican Savannah, MO

Article from The Andrew County Republican, September 26, 1873

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FRIDAY MORNING, SEPT. 26, 1873. BANK FAILURES. A prophetic article under the caption of "Who Next?" appeared in the New York Tribune of Tuesday last. It recounted the failures of The Brooklyn Trust Comyany, The New York Warehouse and Security Company, and Kenyon Cox & Co., all of whom recently suspended. The cause of failure in every instance was a departure from the line of legitimate banking business, and trading in speculative railway shares. One bank undertook to build the New Haven, Middletown and Willimantie railroad. Another made heavy advances to the Canada Southern, and a third undertook to float some Texas, Alabama and New $Orleans railway enterprise. To the Tribune's question, "How many more examples will be needed before the lesson is learned?" come the reponsive occurrences of the past few days. One after another have the supposed strong men of Wall street succumbed to the pressure, and it seems now to be highly probable that the whole class of bankers who have made it their business to divert the capital of the country from its legitimate uses will ba overtaken by bankruptcy. The banks of the country are organized and sustained primarily for the purpose of afiording facilities for carrying on the mercantile and manufacturing business of the people. When densely populated communities require additional means of transportation, and it is demonstrable at there is a present demand for railthe which will unquestionably pay a SWAVE the investment, it is right for n' groft banks:ann capitalists to encourage such enterprises. It 18 different when calls in oney to build railways in :all serts of out-of-the-way places, wherethereis 170 pol rulation or trade to susurin them. To such applications. sound bankers . ill turn a deaf ear. Just at tiee time, he wever, when theavailable funds of the country are needed to move the crops of the west, it is ascustodians of certained that some of the of the currency in Wam street have been scattering the money of 1 heir depositors to supply the demands a moonshine of the land. railway schemes in all parts must necesBanks doing such a business. for loans sarily discourage applications engaged made by merchants and others Suel is the in legitimate enterprises. tone of the Tribune's article, wh ich appeared two days before the house. of Jay Cooke & Co. closed its doors. , Other banks that have done business after the same fashion must go the same way, a nd the houses that withstand the storm wi be found to be of that class which is unwilling to hazard the funds of depositors in reckless speculations for large gains, and whose managers have anticipated and provided for emergecies like the present.

9. January 10, 1874 The Pacific Commercial Advertiser Honolulu, HI

Article from The Pacific Commercial Advertiser, January 10, 1874

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# OUR NEW YORK LETTER. NEW YORK, November 24th, 1873. # THE PANIC. Symptoms of a financial crash were evident at the time of my last, in September; one or two small houses had suspended, but no large concerns except the New York Warehouse and Security Company: following that and closely connected therewith, Francis Skiddy was compelled to suspend. Kenyon, Cox & Co. were the next on the list, and it became evident that serious trouble was impending. The bears were busily engaged in crowding down everything they could get hold of, but finally the market became too wild for them to manage, and everybody cried-"Stand from under!" Thursday, September 18th, opened gloomily; excitement was at a fever heat. In the morning it was reported that George Opdyke had failed, and a whole line of stocks went crashing down. The Stock Exchange presented a wild scene, and the shouting was deafening. Several failures were announced during the day; at each the panic grew worse, but about the middle of the afternoon the news of the suspension of Jay Cooke & Co., in New York, Philadelphia and Washington, blew such a whirlwind into the street that nothing could stand before it, and every stock on the list fell faster than the coolest could keep track of. It is reported that Jay Gould invaded the street then and sold short, almost unlimited stock. Thursday evening closed upon a city full of anxious forebodings of more trouble, which were only too true, for Friday, the 19th, proved a more terrible day than has visited the street since the memorable Black Friday in September, 1869-and in many respects it was worse. Instead of coolness and renewed confidence having come with the night, the day opened with general smashing and panic-the scene in the stock-rooms was beyond description. Every few minutes, the sharp ring of the President's gavel brought silence and the crowd struggled forward to hear-only of more suspensions, each one meaning ruin to many all through society; and the confusion became worse than ever. Valuable stocks were absolutely thrown away, and good securities sacrificed. At last came the failure of Fisk and Hatch. The news was stupifying; men stood bereft of speech, then glancing around saw only terror and despair. It was silent as the grave for a few seconds, then the whole mass rushed from the building into the streets uttering fearful yells, then poured back into the rooms, then swayed back to the streets-like a tidal-wave-rising and falling with threatenings of destruction. It was a scene never to be forgotten. The spectators in the galleries were affected and were moved by some nameless terror. Ladies shed tears and men trembled with uncontrollable agitation. It may seem foolish to those not present and unaffected by the sight and sound, but once experienced the memory of the sensations will live forever. After the failure of Fisk and Hatch, business was virtually suspended, for the absurd transactions following were unworthy of such a name. Cautious buyers might have made fortunes, and it is known that a few reaped a golden harvest. Jay Gould made good his "short" sales of the previous few days by heavy purchases at almost nominal prices. Harlem fell from 129¼ on Tuesday to 90 on Friday; Western Union dropped from 90½ to 55½; Lake Shore, 91 to 79; Rock Island, 106 to 87; Panama, 115 to 84; Pacific Mail, 45 to 31; Union Pacific, 25 to 16; and thus throughout the list. Poor stocks became about worthless, but the surprising feature was the immense fluctuations of good railroad bonds and stocks; that Harlem should drop nearly forty cents was the height of insanity. Indeed the whole panic seemed needless to outsiders, but it was inevitable. Saturday, the 20th, was a gloomy day. The excitement was worse than before, and utterly ruined many who had survived the previous days. At last the managers of the Stock Exchange turned out the mob-for such had become the crowd of brokers-and closed the doors. Street operations, though forbidden, became the rule till late in the day, when people suddenly concluded to go home, and at five o'clock almost a Sunday quiet reigned on Wall and Broad streets. It was amusing to see the crowds or country people who had been attracted by the news of a "Wall street panic" into the city. They crowded every corner, the steps of the Sub Treasury and Custom House were thronged, and if two anxious looking men stopped anywhere to converse, they were at once surrounded by a most intensely interested group, to judge from the open mouths and listening attitudes. It is said that two Custom House clerks laid a wager that a crowd could be collected by nothing. At any rate, about half-past two in the afternoon of Saturday, a man ran quickly down the steps of the Custom House to the middle of the street, and shading his eyes, gazed intently at Trinity Spire, then ran back, whispered a word, and again, standing in the street, looked. Two or three more went out to see, then people on the side-walks stopped and looked; more ran out on the street; a cart stopped and the driver looked up at Trinity; a crowd began to collect; people asked, "what is it?" Nobody knew-so it was a mystery; windows opened and heads were thrust out, a crowd collected; on the cross streets everybody began to run towards Wall street, and soon an immense jam was created, which was broken and travel resumed only after great exertion on the part of the police. It was one of the curious incidents of the day, and showed the condition of mind in which people were. Sunday, the 21st, was a day of feverish excitement. All day long the Fifth Avenue Hotel was thronged with spectators of all sorts, politicians and commercial men, and transactions were very extensive and heavy. President Grant was in the city and held consultations with leading capitalists. His action deserves the highest credit. Not for a moment did he lose presence of mind. Though expressing the greatest sympathy for the unfortunates who were in trouble, and offering to do all the law allowed for the general relief, yet he steadily refused assent to argument or entreaty regarding the $44,000,000 reserve in the Treasury. All that could be said in favor of loaning it to the bank was said, but the President was determined in his refusal. President Grant won by his action regarding the panic, the hearty commendation of the best men of all parties and the praise of the leading papers, and it is to be regretted that subsequent events have been such as to withdraw from him the general approbation, for it is certain that the reserve has been encroached upon and part of it thrown upon the country, contrary to the intent of the Act of Congress withholding the $44,000,000 reserve. An arrangement was made by which the government bought largely of its bonds; the result being to materially assist in restoring confidence. The week following Sept. 21st was unsettled and troubled, but gradually business was resumed. Time has elapsed so that the panic may now be calmly reviewed and its lesson learned. The immediate and primary cause was the vast schemes of railway building with which the country, especially

10. September 8, 1875 The Richmond Palladium Richmond, IN

Article from The Richmond Palladium, September 8, 1875

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# The Financial Difficulty. The stringency which had occurred in the fall of 1871 and 1872 was significant of the approaching absorption by expanding credit of the legally limited amount of paper currency. In the summer of 1873 the Granger agitation at the West frightened investors from railroad bonds, and crippled the enterprises which depended on the continuance of these investments for funds. The rebuilding of Chicago and Boston had also caused a great absorption of circulating capital. September 8 the New York Warehouse and Security Company failed, followed by one or two more firms involved in railroad construction. Confidence in persons known to be burdened in this way was impaired, and a run on them for deposits began. September 18 Jay Cooke & Co, succumbed to this demand, and a panic followed. The country depositors began to run on their banks, though without panic. The country banks called for their balances, and the city banks called their funds in from brokers. On the 20th the Union Trust Company suspended, followed by two or three other banks and trust companies. 'The panic on the Exchange was so great that the Exchange was closed, and remained closed ten days. The Gold Exchange closed on Monday the 22d, gold at 112. On the 20th the Associated Banks formed an alliance by which seven per cent. certificates were issued for seventy-five per cent. of the value of securities deposited by any bank, which certificates were good for Clearing-house balances; $22,000,000 of them were issued before the tide turned. The President and Secretary were in New York on the 21st, but refused to draw on the $44,000,000. The Secretary ordered bonds to be bought as a measure of relief, and $12,000,000 were bought. This depleted the cash on hand, and before January 1 he was obliged to issue over $26,000,000 of the $44,000,000 for current expenses. This carried the greenbacks up to $382,000. The suspension of paper payments by the banks lasted until November 22. Meanwhile the crisis was affecting industry in all forms. It produced a general doubt of the status and of the future. Hours of labor and wages reduced and workmen discharged. The lack of reviving courage and enterprise has been very marked, and is due to nothing less than the general feeling that there can be no permanent cure until the financial problem is solved. The failures in 1873 were 5,183, liabilities, $228,110.000; those in 1874, 5,830, liabilities, $155,200,000. The act of January 14, 1875, specified January 1, 1879, as the day for resuming specie payments. The people of a new country are not likely to be very careful financiers. They have no traditions to carry down the warning of the past. They are not trained to look back or to look forward. They do not look back, because the great achivements of yesterday only provoke a smile to-day. They do not look forward, because they trust their power to deal with whatever may come. We must not expect what is inconsistent with the conditions. If we look to the past, there has been great progress. The theories on which the colonists based their paper "banks" obtain attention from no sober men today. The banks, whatever their faults, are not like those of 1816, nor yet like those of 1836. On the other hand, we are still struggling with the problems of currency and taxation and debt. A student of our past history can hardly expect that these will be solved by a heroic effort, but by a long and painful growth up to the conviction that financial makeshifts do not pay, and that the first condition of dealing successfully with financial difficulty is to get free exercise of the national productive powers. -Harper's Magazine. # Chicago Parks. Chicago has under preparation a system of public parks, which