Volume 2 - ElectricCanadian.com

1867 TO 1901 63The opening of the New York agency in 1872 came at amost interesting juncture in the history of world finance. Therecovery from the panic of 1857 had been slow, and the CivilWar in the United States had interfered with many of the accustomedchannels of trade. England had suffered from the lackof the cotton which, but for the war, would have been spun inLancashire, and had passed through a brief although sharp panicwhen Overend, Gurney and Company failed in 1866. Germanyhad received an indemnity of 5,000,000,000 francs after theaccompanied by the formation of joint-stock companiesFranco-Prussian war and had indulged in an orgy of speculation,and so-called banks, the development of mines, and thebuilding of railways, steel-works and sugar refineries on a scalenever before known in Europe. On the other hand, France,urged on by her debt, surpassed herself in the effort toaccumulate new capital, rebuild her industries and reorganizeher army. In the United States, the depression resultingfrom the Civil War had been followed by four years duringwhich the steady flow of the money of European investorsinto the country, and the amount of capital sunk in improvementsto property and all kinds of construction work, includingthe completion of a transcontinental railway, had exceededall previous experience. In short, the nation had never seemedso prosperous, or so hopeful. The whole world had enjoyed aperiod of sixteen years during which the volume of production,and the activity of business in general, had exceeded all previousexperience. Such world-wide expansion must in thenature of things receive a check and the reaction soon followed.A crisis broke out in Vienna early in 1873, but the world panicdid not manifest itself in the United States until September,when the failure of the well-known banking firm of Jay Cookeand Company took place.For some years prior to the opening of The Canadian Bankof Commerce in New York, the bank had been a buyer of billsof exchange drawn in the United States against cotton andvarious other products and a seller of its own bills drawn on