PANICS, FINANCIAL, OF THE NINETEENTH CENTURY. 



605 



wheat corner iii Chicago, which resulted in the 

 failure of the l-'ideliu National Hank of Cinein- 

 naii. There was a fall of 41 percent, in .Man- 

 hat Ian Elevated, Mr. Cvrns \V. Field U-iiif; com- 

 pelled to sell 50,000 shares to Mr. Gould. The 

 market was thrown into a partial panic June 24, 

 and it was very sensitive when the announce- 

 ment was made of the failure of Henry S. Ives 

 to perfect his deal in the Baltimore and Ohio. 

 The boldness of this operation and the dis- 

 closures of the weakness of this railroad cor- 

 poration exerted a very depressing influence. 

 Late in August, Grovesteen and Pell, bankers of 

 the Rome and Decatur, failed under circum- 

 stances that called for a close scrutiny of col- 

 laterals by money lenders. 



At the opening of 1888 the strike on the 

 Reading was a disturbing factor, and the mar- 

 ket was very dull until March, when the strike 

 of engineers on the Chicago, Burlington and 

 Quincy sharply depressed prices, and then came 

 the extraordinary blizzard, March 12, which 

 caused a suspension of business for three days 

 and great loss to the railroads. The first im- 

 provement in the market came after the an- 

 nouncement by the Secretary of the Treasury, 

 April 17, that he would begin to purchase bonds 

 daily on the 23d, but the advancing tendency 

 was checked by the middle of May, and then 

 followed a decline caused by the reduction in 

 the Chicago, Burlington and Quincy dividend 

 and the loss of earnings by the Atchison, To- 

 peka and Santa F6. 



The most important event in 1889 was the 

 formation, in January, of the Interstate Rail- 

 way Association, for the maintenance of rates on 

 the Western and on the trunk lines. This had 

 a good effect until it was counteracted by the un- 

 favorable financial situation of the Atchison, 

 Topeka and Santa F6. The plan of reorganiza- 

 tion of that road was announced in October. It 

 proved to be one of the most successful schemes 

 ever presented, and it was virtually perfected 

 before the end of the year. 



1890. The market grew strong after the 

 money pressure relaxed early in this year, but 

 there was a check to the improvement after 

 the 10th, when it was announced that no 

 interest would be paid on any of the Reading 

 income bonds. This led to selling of these 

 securities for European account, and the mar- 

 ket was further unsettled later in the month by 

 an attempt to wreck the Sixth National Bajik, 

 which resulted in the failure of 2 small institu- 

 tions. A steady decline in the surplus of the 

 city banks, the passing of the dividend on Chi- 

 cago and Illinois, and a sharp fall in Tennessee 

 Coal and Iron from 86 to 51 contributed to keep 

 the market feverish in February, but in March 

 the tendency was strongly upward. 



In the middle of June the market began to be 

 affected by exports of gold and by the switch- 

 men's strike at Cleveland. The passage of the 

 Silver-Purchase bill, which was signed July 14, 

 had no immediate effect, and the market was 

 unfavorably influenced by the advance in dis- 

 counts in London, caused by the crisis in Buenos 

 Ayres and by liberal selling of stocks for Euro- 

 pean account, which was the chief disturbing 

 factor for the remainder of the summer and in 

 the autumn. The Baring crisis, Nov. 15, affected 



every financial center in the world. The house 

 of Muring Mros., of London, had l>y 1889 become 

 heavily committed to financial enterprises in the 

 Argentine Republic and in Uruguay, and when 

 the emliarra.-Miients of Argentine grew acute, 

 about the middle of 1889, the fall in the securi- 

 ties of that country became rapid, and gold was 

 so largely withdrawn from London that on the 

 last day of that year the Bank of England ad- 

 vanced its rate of discount to per cent. Dur- 

 ing 1890 there were eleven changes in the bank 

 rate, from 6 to 3, and then to 6 again. 



1891-'92. The leading features abroad in 

 1891 were the successful negotiation by France 

 of a loan for 868,750,000 francs, and by Germany 

 of 400,000,000 marks ; the return by the Bank 

 of England, in the original packages, of the 

 3,000,000 gold borrowed of the Bank of France 

 during the Baring crisis : a panic, March 6, at 

 Buenos Ayres; a semipanic at Paris, March 12, 

 caused by the embarrassment of the Societe des 

 Depots et Compte Courants ; the suspension, on 

 the 27th, of the Bank of Leghorn ; a movement 

 of gold in April from the principal European 

 centers to St. Petersburg caused by protests by 

 Jewish bankers against Russian persecution of 

 the Jews and the refusal of these cankers to ne- 

 gotiate a Russian loan, but later the Finance Min- 

 ister of the Czar announced that only a part of 

 the $22,500,000 deposited at the European cap- 

 itals would be withdrawn, and the excitement 

 thereupon subsided. In November there was a 

 crisis at Vienna due to war rumors, and a popu- 

 lar demonstration against President Fonseca of 

 Brazil led to his resignation. The European 

 crops of grain were largely deficient, while uiose 

 in America were abundant, and while there were 

 political and financial troubles in almost every 

 other part of the world, the United States were 

 peaceful and prosperous. Gold exports began 

 in February and continued until the end of 

 August, amounting to about $65,476,000, chiefly 

 to Berlin, and much of it was attracted by the 

 virtual premium paid for it by foreign bankers 

 who were strengthening their position in an- 

 ticipation of the withdrawal by Russia of her 

 balances at the European capitals. After Au- 

 gust gold was returnea to this country, and by 

 the end of the year imports had amounted to 

 132,957,000. Money was in fairly good supply, 

 the exception being a flurry on Sept. 22, when 

 25 per cent, was recorded in consequence of the 

 failure of S. V. White in his attempt to corner 

 October corn. In 1892 the country felt in a 

 more marked degree than in any of the preced- 

 ing years the evil effects of the silver legislation 

 of 1878 and of the silver-purchase law of 1890, 

 and the efforts of the Treasury Department were 

 from time to time during the year directed to 

 the maintenance of the parity be'tween gold and 

 silver obligations. From February to the end 

 of the year there was almost a steady movement 

 of gold to Europe attracted by the demands of 

 Austro-llungary, which empire was preparing 

 for placing the currency upon a gold basis. 

 Twice during the year the passage by Congress 

 of a bill for the free coinage of silver was de- 

 feated only by a combination of opposing in- 

 tere<ts, and each time the advocates of free 

 coinage rallied for a further effort. These move- 

 ments could not fail to attract attention in Eu- 



