Even before Cleveland takes office an Economic crisis is seen to be brewing. Ten days before the inauguration, the Philadelphia and Reading Railroad files bankruptcy proceedings.

Later, prices of grain, cotton, steel, and timber fall steadily, while the stock market fluctuates wildly. Many financiers, including August Belmont, J.P. Morgan and Henry Villard, warn Cleveland that a panic is nearing, and add their pressure to get a repeal of the Sherman Silver Purchase Act of 1890, which they blame for the crisis.
 
 The chief fear among Eastern financiers and businessmen is that in a panic the United States could easily be forced off the gold standard. Early in May the panic begins. More railroads go broke; many of the great financial trusts begin to collapse; European banks begin selling their American stocks and bonds, and a huge run on banks ensues, until more than 500 Banks have failed. A vigorous battle begins, with the goal of repealing the Sherman Act. Forces for and against repeal are lined up geographically: the West and South favor retention of the act, and the East favors immediate repeal. Despite the repeal of the act in October, the deepening depression is becoming worldwide, and is wiping out prosperity in all sections of the economy.
 
 1The Financial World
 
 The events of the past week will pass into Wall Street history as the "industrial panic." As a panic it was the worst since 1873, and the full force of it fell on the industrial stocks. It fell upon them because the speculation was concentrated in that group, and it did not touch the railroad shares with any severity because so little has been doing in them as compared with the industrials. One railroad stock there had been an inflated speculation in, and it suffered as much as the industrials, Manhattan. The time of extreme stress lasted over three days. It reached its most acute stage on Friday morning, when for nearly two hours it seemed as if the whole Street would go down in a crash of bankruptcy similar to 1873.
 
 By noon the worst was over; by the afternoon there had been a rebound of prices almost as great as the morning fall: and three o'clock struck the excited throngs of brokers on the floor of the Exchange gave vent to a wild cheer, thankful that the trying day was over. Yesterday the market was feverish and from feverishness it is likely to quiet down into a weak dullness, like a patient who has been exhausted by violent spasms. It is unnecessary to note here the extreme declines, or the rapid recoveries in prices. They have already been set forth minutely and at length. But it may be said that to see the like, one must go back twenty years: and in those days it was all railroad stocks. There were no others to speculate in.
 
 The fact that they were railroad stocks, and not industrials, did not secure them against the effects of excessive speculation; neither because this panic, of 1893, has taken place in the industrials, does it follow that industrial stocks are of less value than railroad stocks. When a period of financial or commercial stress comes upon us, whatever speculation has been the most active in suffers the most in the general collapse. 
 
 This is equally true of securities or commodities, or of any group of securities. We have seen (not to go back to the old days of gold speculation) some terrible days in Wall Street when the trunk line stocks were the storm centers, when the Gould securities were, and Atchison and Union Pacific, and notably when the group of stocks known as the Velars wrought wreck and ruin. It was these latter which gave Wall Street its last bad time previous to the past week. Then there were no industrials, for those stocks were at the time few in number and but little traded in. They, therefore, were not responsible.
 
 This time they are. Why? A few figures will show. The first of the industrial group which the speculative public took a fancy to was American Refineries stock, called, for short, Sugar. It took the popular fancy, because the company made large profits and paid big dividends. Speculation in it became a craze, and then followed in rapid succession the formation of other large companies and the listing of their stocks on the Exchange. Since first Sugar became prominent in public speculation, we have had listed the securities of nine or ten companies with capital stocks varying from $35,000,000 to $8,000,000. 
 
 Here is a brief enumeration of all, the capital given being the combined common and preferred stocks of each: Sugar, $73,000,000; Cotton Oil, (reorganized,) $30,000,000; Distilling, $35,000,000; Tobacco, $29,000,000; General Electric, $34,000,000; Cordage, $25,000,000; Lead, $30,000,000; Linseed Oil, $18,000,000; Rubber, $26,000,000; Starch, $8,000,000. The total foots up nearly $310,000,000, all the creation of a few years. In addition these companies have bonds to the amount of about $35,000,000. Here, then, is a mass of $310,000,000 of stocks, of recent creation, in which public speculation has been extremely active, so much so as to leave the old railroad favorites of speculation quite in the shade, but which have not as yet found a settled standing among the financial community.

Their value as collateral is uncertain, they are looked upon with suspicion by the conservative, they are taken at the banks with caution and held only on sufferance; and whenever the money market suggests to bank managers the necessity of a contraction of credits,  they are the first to be thrown out of loans. In this we have all the elements which go to make up a highly speculative class of stocks, liable to extreme fluctuations in price, violent movements up and down, in short all that the industrials have been in the market.
 
 If we go a step further, and ask why is their value uncertain, a variety of causes may be cited: but chief among them is that the general public have not that information about the working of the properties the securities represent which they have about the working of railroads. Some of the companies make very full reports; but most do not. If all did, it would still be true that the speculative and investing public would be comparatively in the dark, because of the variety of trades. Wall Street has had thirty years education in the one business of railroad transportation, and is familiar with all the problems which make for or against it. It knows more about railroads than anything else; and yet with its thirty years' education acquired at the cost of many disastrous experiences, it makes mistakes and will continue to make them. 
 
 How, then, is it likely to know much about sugar refining, about rope making, about lead, rubber, starch, tobacco, &c., which have only just come before it. When a railroad company makes a report, a thousand eager minds dissect it. But put before the same people the report of one of the industrial companies, and unless the inquirer has technical knowledge of the trade his opinion on the report would be of little value. Until, therefore, the speculative and investing public becomes more familiar with the working of the various properties which the chief industrial stocks represent, the values will remain uncertain.
 
 The knowledge will certainly be acquired. The industrial stocks are not on Wall Street from caprice, or from ephemeral causes. They are there from necessity, as the effects of industrial development. The causes which have brought them there will keep them there; and the knowledge which is now the property of the few will be diffused and become the property of the many. It was just the same with the railroad stocks.
 
 The centre of the late storm was the Cordage Company; the prominent figure in the general speculation was Mr. S.V. White. The failure of the Cordage Company started the demoralization, the failure of Mr. White was the climax of the panic. Mr. White's methods of speculation are tolerably well known. He is at his best in adversity, and his worst in prosperity. The courage of a man who could try to corner the corn crop of the United States with $400,000, is beyond question. The incidental fact that he failed, does not detract from the boldness of the conception.
 
 In his recent speculations he seems to have undertaken to run Manhattan, Sugar, and several other properties. It is understood that Mr. Sage has acquired his Manhattan, and the Havemeyers his Sugar. The failure of the house of Henry Allen & Co., was due to the collapse in Cordage, the main speculative accounts in the stock being with that firm. It is understood that the losses of the firm will be made up by the customers through whom they were incurred. The heaviest sufferers by the failure of the Cordage Company are its own officers. They were firm believers in the property, and heavy holders of its stock when the crash came. This places them in a better position before the public than if they had run and left others to suffer. 
 
 Their mistake as managers was in trying to do too big a business on insufficient working capital. They borrowed until borrowing became impossible, through the general contraction of credits forced on the banks, and then came the crash. The past is gone, and it is no use weeping over it. The future is the consideration. These gentlemen are rich; they have large resources. The stockholders and the public will look to them as honest men, desiring to retain their high standing in the community, to do all that lies in their power, at whatever cost of personal sacrifice, to put their company on its feet again, in a sounder position, and to conduct its affairs on surer lines guided by the bitter experience of the past. They can do this. The future of the company is with them.
 
 As to the general market, the usual experience is that after such a convulsion it settles down slowly into a condition of rest and recuperation. There is no reason to expect it will do otherwise now. The strong can stand and the weak have been sided over. Liquidation has been very thorough, and what is yet to come will doubtless come slowly. There are not a few stocks on the list which are very low, and these may be expected to work upward even if the general list continues flat. 
 
 It is gratifying to state that the brokers, those of the commission houses specially, express themselves in the most favorable terms of the way the banks have acted in the time of emergency. They treated their customers with a prudent liberality worthy of all praise. To this may be added also, the foreign banking houses. they may export gold, but they know how to take care of customers in a time of distress. 
 
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