One no longer knew on whom to count to provide ready money. Offerings
were made on the Stock Exchange where there were no bidders, and the
market disappeared in the midst of a panic which paralyzed every one.
This melancholy state of things was still further aggravated on the 14th
of May by the failure of Donnel, Lawson, & Simpson and Hatch & Foote. On
May 15th it was the turn of the Savings Banks of New York, of Piske &
Hatch, and of many others. It was impossible to obtain any credit from
the banks, and all securities were unsalable, unless at ruinous rates.
Reduced to such an extremity, it was necessary to adopt some course to
help the market and avoid suspension of payments.
The certified checks issued by the banks did not answer, and it was
necessary to have recourse to a new means of settlement. The members of
the clearing house emerged from their usual passive role to intervene
and to do a novel thing: they issued certificates that they accepted in
the name of the most embarrassed institutions whose fall they wished to
avert, in order to prevent the failure of others. Then, as everybody was
making default, the Secretary of the Treasury in his turn wished to aid
the common effort to sustain the credit of the situation, and, in order
to accomplish this by the most regular methods, he pledged himself to
prepay the debt, whose term was close at hand.
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