What hath Mrs. O’Leary’s cow wrought?
The panic produced in financial and commercial circles by the Chicago fire has subsided; but the real magnitude of the calamity begins only now to be measured. The loss is evidently much less in amount than the first exaggerated estimates, but the character of the loss is widely different from what is generally believed. The first effect was the more or less compulsory sale of securities to provide the means of meeting actual losses. It was this sale, and its anticipated effect upon the markets, that created the terrible depression in securities of last week from which Wall Street has not yet recovered. The more serious effect is that which results from the withdrawal of funds from New York to enable the banks, merchants, and people of Chicago to repair their losses. The banks, in order to respond to this drain, even to the limited extent so far experienced, were obliged already last week to draw their reserves down below the limit prescribed by law, and the drain has been more severe the present week than it was last. It is from this source that the real danger threatens. The actual loss of property, great as it is, will be speedily retrieved by the inexhaustible activity, energy, enterprise, and intelligence of the people, but the disturbance in the delicate machinery of bank credits is more difficult to rectify, and many persons are already calling upon the Secretary of the Treasury to interfere, with all the power of the United States Government, to prevent a serious curtailment of the currency of the people, and to issue a portion of his greenback reserve in place of the credits destroyed by the present uncertainty.
In Wall Street, the alarm reached its height on Saturday, prices rallying sharply from the lowest points, and working, with moderate fluctuations at best, a slight level above the extreme decline. Money continues stringent, though no longer at the usurious rates artificially made in the midst of the panic by speculators for a decline. The average fall in securities is probably not much less than ten per cent. Gold has likewise fallen off, owing to the abundant supply of foreign capital offered here at the extreme rates of interest. The rates of exchange have correspondingly declined from the same reason. The fall in Government securities, which seems at first surprising, is caused by the fact that many financial companies, at the first sign of alarm, sold these securities upon which they could most speedily raise cash without great loss. All trade has received a severe blow, no one daring to enter upon important negotiations until the effect of the fire is better understood. Prices of most articles have fallen off. Produce and provisions are lower; best coffee, tea, and groceries, of which the supply is insufficient, remain firm. Real estate is in a very precarious condition. The general feeling throughout the community is one of uncertainty, but no longer of alarm.