Having reviewed the disastrous course of this crisis up to the date of writing, I will briefly consider its causes.  It may be traced remotely, in some degree, to the distrust of American railway securities in Europe which attended the reckless administration of the Erie Railway under Fisk and Gould, and which lingered after their overthrow, indisposing capitalists, as well as small investors, to have anything to do with American railways.  It is true that a market still remained there for these securities, but it was a much more limited one than it probably would have been but for the Erie scandal, and within the last year or two it was entirely glutted.  Financial agents found it impossible to float a new American railway loan even where the security offered was a first mortgage bond.  Thus, Jay Cooke & Co. were greatly disappointed with respect to the sale of their Northern Pacific bonds abroad, and nearly as much so in the demand for them at home; but they were pledged to the undertaking, their solvency became dependent on its success, and they were sanguine that confidence in the great enterprise would grow with every mile of new road constructed.

Mr. Jay Cooke undoubtedly looked forward to a subsidy from Congress for carrying the mails over the new line, and in all likelihood would have obtained it but for the Credit Mobilier expose, which caused both Congress and the people to “shut down,” not only on everything having the appearance of a “job,” but on much besides.  The ill odor into which that investigation brought the Union Pacific Railway and all who had been connected with its construction was a heavy blow at new enterprises of a similar character where government land-grants were involved; and the vexatious suit which Congress authorized against the Union Pacific Company and all concerned was another blow at confidence in the same direction.

The formation and rapid spread of the Grangers’ association in the West, and its avowed design to make war upon the railway interest with a view of securing cheap transportation to the seaboard, was another disturbing element, undermining confidence in railway property.  But the greatest and the immediate cause of the crisis was the over-building of railways; and hard indeed are likely to be the fortunes of the unfinished enterprises of this character arrested by its blighting influence; for capital for years to come will be very slow in finding its way into the bonds of roads to be built by the proceeds of their sale.  It was a false and dangerous system—­and the event has proved its unsoundness—­for new companies to rely from the outset upon this source for the means of construction.  It was a hand-to-mouth policy, resting upon so precarious a foundation that, in the light of experience, we can only wonder that eminent and otherwise conservative bankers should have adopted it to the extent they did, thereby not only jeopardizing their own position, but imperiling