dangerous to the welfare of the railroads it is reasonable to assume
that foreign capital would have been withdrawn from American railways
and that American capitalists interested in railroads would have
attempted to avert financial ruin by disposing of their holdings.
Neither situation developed, for the European investors increased their
holdings and American capitalists continued to plan still greater
investments in railways.
The second general explanation was found in the unsound and reckless
banking in New York City. The dangers arising from trust companies had
been known for several years. It came to be believed that the deposits