LV. TERRIBLE CRISIS IN THE BUSINESS AND FINANCIAL WORLD.-1857. Known as "the Great Panic."-A Sudden, Universal Crash in the Height of Prosperity.-Caused by Wild Speculations and Enormous Debt.-Suspension of Banks all Over the Country.-Failure of the Oldest and Wealthiest Houses.-Fortunes Swept Away in a Day.-Prostration of Every Branch of Industry.-Prolonged Embarrassment, Distrust, and Suffering-The Panic of 1837 a ComparisonExtravagance and High Prices.-Chimerical Railroad Schemes.-Mania for Land Investments.Reckless Stock Gambling.-Western Paper Cities.-Fabulous Prices for "Lots."-Money Absorbed in this Way.-Bursting of the Bubble.-The First Great Blow.-A Bomb in Money Circles.-Widespread Shock and Terror.-Fierce Crowds at the Banks.-A Run Upon Them for Specie.-They "Go to the Wall."-Savings Bank Excitement.-Rare Doings at the Counters.-Wit, Mirth, Despair, and Ruin.-Forty Thousand Persons in Wall Street.-Factories, Foundries, etc., Stopped.-Business Credit Destroyed.-Root of the Whole Difficulty. "The most extraordinary, violent, and destructive panic ever experienced in this country."-GIBBONS'S HISTORY OF BANKS AND BANKING. preceded, by just a score of years, that more general and calamitous one of 1857,-the latter being universally known to this day as "the Great Panic." During the firstnamed, every bank in the Union failed and suspended specie payment, with a comparatively few exceptions. Extravagance pervaded all classes of society, and so general and feverish was the excitement in western lands' speculation, that men grasped at 'lots' in that boundless and then almost untracked region, as if the supply was about to be exhausted. Indeed, the picture is but slightly if at all overdrawn, which represents the land mania of that period as swallowing up, in its mad whirl, all classes. The "man of one idea" was visible everywhere; no man had two. He who had no money begged, borrowed, or stole it; he who had, thought he made a generous sacrifice, if he lent it cent per cent. The tradesman forsook his shop; the farmer his plough; the merchant his counter; the lawyer his office; the clergyman his study -to join the general chase. The man with one leg, or he that had none, could at least get on board a steamer, and make for Chicago or Milwaukee; the strong, the able, but above all, the "enterprising," set out with his pocket map and his pocket compass, to thread the dim woods, and see with his own eyes,-for who could be so demented as to waste time in planting, in building, in hammering iron, in making shoes, when the path of wealth lay wide and flowery before him! A ditcher, hired by the job to do a certain piece of work in his line, was asked "Well, John, did you make anything?" "Pretty well; I cleared about ten dollars a day, but I could have made more by standin' round"-that is, watching the land market, for bargains. The host of travelers on their western speculating tours met with many difficulties, as might be supposed. Such searching among trees for town lines!-such ransacking of the woods for section corners, ranges, and base lines!—such anxious care in identifying spots possessing "particular advantages!" And then, alas! after all, such precious blunders, -blunders which called into action another class of operators, who became popularly known as "land lookers." These were plentiful at every turn, ready to furnish "waterpower," "pine lots," or anything else, at a moment's notice. It was impossible to mention any part of the country which they had not "personally surveyed." They would state, with the gravity of astrologers, what sort of timber predominated on any given tract, drawing sage deductions as to the capabilities of the soil! Did the purchaser incline to city property? Lo! a splendid chart, setting forth the advantages of some unequaled site. ing the awful crash in 1857. The times were characterized by excessive debts and almost incredible extravagance and speculations. The cities, and many parts of the country, were drained of means for legitimate purposes, being devoted, instead, to the construction of unproductive railroads, or absorbed in western land speculations. The new territories, and some parts of the western states, were almost covered with paper cities, selling to the credulous at almost fabulous prices. In Kansas alone, where scarcely one legal title had as yet been granted, there were more acres laid out for cities, than were covered by all the cities in the northern and middle states. Nearly the whole west swarmed with speculators, who neither intended to cultivate the soil nor settle there, but who expected to realize fortunes, without labor, out of the bona fide settler. Lots in "cities," where was scarcely a house, were sold to the inexperienced and the unwary, at prices equaling those in the large cities. These operations, with others of a similarly chimerical character, made money scarce everywhere, and diverted thousands of men, and much of the capital of the country, from the business of producing,― tending, of course, to extravagant prices of food. But the omens of disaster began to cast their spectral shadows athwart the financial sky, the first manifestation being a regular decline in the value of leading railroad stocks, especially the western roads. But the first great blow to public confidence was given by the unexpected failure, in August, of the Ohio Life Insurance and Trust Company. The magnitude and importance of the operations of this institution throughout the country, amounting to millions of dollars, and involving so many individuals and corporations, rendered its suspension a fearful disaster. The announcement fell like a But at last this bubble burst-thousands bomb in the money circles, and, by the of fortunes vanished into thin air-the first or second week of September, banks crisis and the panic came like a whirl- and business houses began to stop paywind. ment, and a panic ensued, which became. Similar was the state of things preced- almost universal during the month. The best mercantile paper was at a discount of from three to five per cent. a month. Toward the close of the month three of the leading banks of Philadelphia failed, and the remainder resolved upon a temporary suspension of specie payments. This was followed by a similar step on the part of most of the banks of Pennsylvania, Maryland, the District of Columbia, and New Jersey. No such intense excitement had ever before prevailed in Philadelphia, as that which reigned when the bank of Pennsyl being nearly two million dollars. Very early on the same day, the Girard and Commercial banks ceased paying their deposits, but continued to pay their bills. Checks were marked good and returned to the holders. After three o'clock, the city was full of all sorts of rumors, and, at a meeting of the bank presidents, a universal suspension was agreed upon. These tidings became rapidly known throughout the towns and villages of the state, and the next morning a vast number of anxious people flocked into the city by steam-boat EXCITEMENT IN BUSINESS CIRCLES DURING THE GREAT PANIC. vania closed its doors. Crowds of people poured into Third street from the distant extremities of the city, and the street became a perfect jam, everybody who had any money in those banks which had not yet stopped specie payment, being in haste to obtain their dues. From this vast mass of people there radiated lines reaching to the counters of all the banks, demanding coin for bills and deposits; and all the various applicants, as they presented themselves, received their money, and retired in good order. This scene continued until the hour of closing, the amount of coin thus paid out, from eleven to three o'clock, and railroad. As if unwilling to believe the unwelcome news, they gathered in crowds opposite the various banks, patiently awaiting the hour for opening. All appeared bent on getting coin for their checks and bills. At ten o'clock the doors opened, police officers being everywhere about, to preserve order. Each customer went up in turn, presented his check, and had it marked good; while such as held bills were told that the redemption of them in specie was temporarily suspended. And now, all over the land, east, west, north, and south, the dark days of fear, alarm, and ruin, settled down upon the people, and panic raged like a pestilence. Indeed, the extent of the crash far exceeded what it would have been, but for the shock and terror which so needlessly possessed men's minds at the instant, and unbalanced their judgment. Universal distrust prevailed-a loss of that mutual confidence between man and man, without which, the foundations of mercantile credit are washed away as so much sand, but with which, temporary difficulties, even though stringent, may be surmounted, and total ruin to individuals and the public prevented. No more fitting illustration of the working of this principle of confidence could be cited, in sustaining or overturning the steadiness of business affairs, than the anecdote of the little Frenchman who loaned a merchant five thousand dollars, when times were good, but who called at the counting-house on the times becoming "hard," in a state of agitation only faintly portrayed in the following hasty colloquy which ensued: "How do you do?" inquired the merchant, as the French creditor presented himself at the counter. "Sick-ver sick,"-replied monsieur. "What is the matter?" "De times is de matter." "De times?-what disease is that?" "De malaide vat break all de marchants, ver much." "Ah-the times, eh? Well, they are bad, very bad, sure enough; but how do they affect you?" "Vy, monsieur, I lose de confidence." "In whom?" "In everybody." "Not in me, I hope?" "Pardonnez moi, monsieur; but I do not know who to trust à present, when all de marchants break several times, all to pieces." "Then I presume you want your money." "Oui, monsieur, I starve for want of l'argent" (the silver). "Can't you do without it?" "No, monsieur, I must have him." "You must?" "Oui, monsieur," said little dimity breeches, turning pale with apprehension for the safety of his money. "And you can't do without it?" "No, monsieur, not von other leetle moment longare." The merchant reached his bank book, drew a check on the good old 'Continental' for the amount, and handed it to his visitor. "Vat is dis, monsieur?" "A check for five thousand dollars, with the interest." "Is it bon?" (good,) said the Frenchman, with amazement. "Certainly." "Have you l'argent in de bank?" "And is it parfaitement convenient to pay de same ?" "Undoubtedly! What astonishes you?" "Vy, dat you have got him in dees times." "Oh, yes, and I have plenty more. I owe nothing that I cannot pay at a moment's notice." The Frenchman was perplexed. "Monsieur, you shall do me von leetle favor, eh?" "With all my heart." "Well, monsieur, you shall keep l'ar gent for me some leetle year longare." "Why, I thought you wanted it!" "Tout au contraire. I no vant de argent. I vant de grand confidence. Suppose you no got de money, den I vant him ver much-suppose you got him, den I no vant him at all. Vous comprenez, eh?" After some further conference, the little chatterer prevailed upon the merchant to retain the money, and left the countinghouse with a light heart, and a countenance very different from the one he wore when he entered. His confidence was restored-he did not stand in need of the money. The banks of New York and New England remained firm, far into the month of October, but so rapid and numberless were the failures, each succeeding day, of railroad and other corporations, and business houses which had-some of them breasted all the financial storms of the last half century, that these were finally obliged to succumb to the avalanche of pressure, and fell into the vortex of universal suspension. Tuesday, the thirteenth of October, the day preceding the suspension, was the climax of the struggle, and Wall street, New York, as the great center of money operations in the United States, presented a scene of wild excitement never before witnessed. The account of that scene, as given by the reporter for the Tribune, is here in part reproduced. At ten o'clock in the morning, says that journal, the fronts of the different institutions indicated, by the crowds gathered around them, that the ability of the vaults to yield up their treasure at the call of depositors and bill-holders was to undergo no ordinary test. Check after check was presented and paid, and still they came. Word soon went forth that a run had commenced on the banks, and it passed from one house to another until the whole lower part of the city was alive with excitement. Bank books were examined; but a moment was required to prepare a check-a signature street-some rushing onward in the hope to secure their deposits before the hour of closing should arrive, and others clustered together, discussing the condition of affairs. One after another of the announcements made, of banks failing under the continued drain upon them, fell with dismay among the crowd, and confident predictions were uttered that ten o'clock of Wednesday would tell the story of the suspension of all. But not a few there were, whose belief in the ability of the moneyed institutions was still unshaken, and they asserted, with earnestness, that |