Popular alarm
was, to some extent, dispelled by a statement from President
Cleveland, on the 23rd of April, declaring flatly and
unmistakably that redemption in gold would be maintained. But the
financial situation throughout the country was such that nothing
could stave off the impending panic. Failures were increasing in
number, some large firms broke under the strain, and the final
stroke came on the 5th of May when the National Cordage Company
went into bankruptcy. As often happens in the history of panics,
the event was trivial in comparison with the consequences. This
company was of a type that is the reproach of American
jurisprudence--the marauding corporation. In the very month in
which it failed, it declared a large cash dividend. Its stock,
which had sold at 147 in January, fell in May to below ten
dollars a share. Though the Philadelphia and Reading Railway
Company, which failed in February, had a capital of $40,000,000
and a debt of more than $125,000,000, the market did not
break completely under that strain. The National Cordage had a
capital of $20,000,000 and liabilities of only $10,000,000, but
its collapse brought down with it the whole structure of credit.
A general movement of liquidation set in, which throughout the
West was so violent as to threaten general bankruptcy. Nearly all
of the national bank failures were in the West and South, and
still more extensive was the wreck of state banks and private
banks.
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