The Late Commercial Crisis [pp. 100-126]

I HE LATE COMMERCIAL CRISIS.
ramified. Thle sudd(llen collapse in the fortunes of hosts of speculators is no less so. It is idle to say that this panic concerned
Wall Street only, and should not in reason have extended beyond. This could not be. Wall Street is the financial centre of
thle country, and its pulsations are simply those of the whole
monetary circulation and business condition of the country.
The special cause of thle late disturbances in the stocks andcl
banking houses of Wall Street, has been the condition of, and
speculations in, the great railway interest of our country. This
comprises the veins and arteries through which the life-blood
of our national industry and wealth circulates. All labor consists in moving things, so that they mnay reach conditions or positions which make themn useful to man. Railways are the great
motors of the country. They vastly increase the efliciency of
every kind of labor, and there is no material interest of the
country whlich is not very largely dependent upon them. Any
paralysis in these is paralysis in everything. The failu-re of the
great and honorable firms, which inaugurated the wild tempest
in the stock exchange, was upon railroads stretching from our
vast interior to either ocean. It was inevitable, therefore, that
as part of the severe process of arresi:ing imprudent railroad
undertakings and vicious speculation, vast losses shouldI be suffered and serious dislocation and prostration should overtake
many branches of commerce and manufactures. All ths and
m,ore-panic or no panic.
2. But much more distress arose from the panic thus induced
than could possibly have arisen from all these causes had they
not precipitated it. The fear first seized some depositors in
banks, or with bankers, that they would be unable to get their
money, as they should want it, to meet their obligations or necessities. This led them to draw out their deposits in money.
This, once begutn, excited the not unreasonable fear in others,
that, inasmnuch as those who conme first are first served, the only
way to secure their own funds deposited would be to draw them
out before the money reserve was exhausted. A "run" on banks
and bankers w-as thus started by those who had perfect confidence in their solvency, but who nevertheless feared that others
would " run" if they themselves did not, and thus compel the
stoppage of payment and the locking up of their fuinds. And although this is. as an- aggregate movenment of the whole communiity,
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1874.]