THE WALL STREET PANIC by C. M. S.

Pacific Press Publishing Company · Oakland, California · May 29, 1901

FromSigns of the Times, Vol. 27, No. 22.

THE WALL STREET PANIC.

By C. M. S.

No such panic has been experienced on the New York Stock Exchange in many years as that which occurred on May 8, when millions of dollars were lost or won in a few hours. Men and women became frantic as they saw their wealth increased by leaps and bounds, or being utterly swept out of their grasp, to leave them worse than penniless.

The remarkable boom in stocks which occurred on that day was due to a battle between millionaires for the control of the Northern Pacific Railroad. One party of these giants of finance was seeking to maintain the life of that railway system, while the other party seemed to be seeking to secure enough of the Northern Pacific stock to enable them to gain control of the road and kill it, thus cutting off competition to that extent, and allowing an increase in rates on the other roads.

When the demand for this stock became determined and persistent, brokers and speculators began to buy and sell wildly, and the stocks went up out of all proportion to their real value. Men and women would buy stock, and in a few minutes sell again at a considerable advance. The price continued to rise; they would buy again, and, with the next rise, sell; and so repeat the operation, over and over, their own purchases making the demand greater and the price higher. Then sudden fear seized the speculators; there was a general rush to sell, and the price went down faster than it had risen; and those who had been “gambling on margins” saw the fortunes they thought within their grasp fading, melting away, and vanishing utterly.

During this panic forty-one principal stocks shrunk the tremendous figures of $698,388,407; and had it not been that the great banks of New York came to the rescue and threw $16,000,000 into the market at six per cent., the panic would have been much worse than it was, and would have had a serious effect financially upon the whole country. Another thing that tended to relieve the immediate distress in the Wall Street market was the promise of some of the heavy buyers that they would not enforce delivery of stock on that day. There was also a disposition on the part of some not to require the entire price at which their stock was sold. As it was, however, some of the investors, in the effort to recover themselves, paid as high as forty per cent. for borrowed money. One prominent stock gambler is reported to have cleared $3,000,000, another $2,000,000, and the wealth of many others has been increased by thousands or even hundreds of thousands, while a far greater number have lost corresponding amounts. Many persons of small income, but imbued with the gambling spirit, have been utterly ruined. Clerks had not only invested all their ready money, but had even mortgaged their salaries for months in advance.

One aged lady, on arriving at the Stock Exchange, and finding that her holding of stock had gone down to 87, tottered as if to fall, and while being assisted to her carriage, said to her colored servant, “Jackson, I’m utterly and completely ruined. I haven’t a dollar to my name.” The secretary of one of the largest banks in New York was heard to say to his friend, “Will, this market has done me up. I went into it with every cent I had saved, and every dollar has been wiped out. I’m going home now to make a clean breast of it to my wife, and we’ll try to start all over again. It took me five years to save what I’ve lost in the last three hours.” It was pure gambling all the way thru, and thousands who had staked their salaries or their incomes, or had mortgaged their homes, in the hope of winning a fortune in a few hours, lost as these lost.

What does the panic teach?—It is simply another evidence of the increase of the gambling spirit among the people—the increase of that spirit of getting gain, of heaping together treasure, which was to be a sign to the children of God that the coming of the Saviour was nigh at hand. We see it on every hand, and God has told us what it means. We shall see more of it as the days go by, for the system is being perfected which enables shrewd men to multiply their gain at a phenomenal rate; and as the masses see these enormous fortunes heaped together in a few months, they are seized with a desire to follow the example set.

The Saviour gave His followers a sign anciently by which they might know when to flee from Jerusalem, and escape death in its overthrow. They recognized the sign when it came, followed His instructions, and escaped with their lives. He has given many signs to indicate the approaching end of this present world. They are fulfilling before our very eyes. Will we, like the disciples of old, heed the warning and escape the overthrow? C. M. S.