The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-09-28


The CIaah or 1897 and the Rsvulsion OF 1857
We give today another series of extracts from
the columns of the HERALD published twenty
years ago, showing the course of affairs imme-
dia'ely previous to the great financial crash of
1887. Since that time generation OF merchants
has passed away, and the present one can only
avail itself Of the experience Of the past by
studying its history as it was recorded daily in
the midst Of passing events
No one can fail to be struck with the remark
able resemblance existing between the condition
OF things of that time and the present state OF
affairs. There is the same exaggerated value OF
stocks the same high prices for the necessares of
life, the same wild speculations in real estate,
the same gradual tightening Of the money
market, with an occasional relaxation, and the
same growing distrust in the minds of all men
This is because the causes that have led TO the
present state Of things are identical in their
nature, though different in form With those that
produced the crisis of 1887. Tue great fountain
of these causes is the expansion of the currency,
thereby disturbing the relation OF money te pro-
ducts and property.
During the few years preceding the crisis of
1887, grand contest for political power arose
between the United States Bank on one side, and
set Of strong willed, pig-headed, selfish poiti.
cans on the other. The bank being the great
controller OF exchanges and regulator of the is
sues Of the fraler fry awaited itself of its power
to expand the currency and by so doing created
Gsa "a. gF v4fG - "a Il.
as being the sole result of the beneficial opera
tons Of Tie bauk, and AZ az evidence of the ne
cessity for its perpetuation. Tie politicians of
the opposing school fought it with its own wea-
pons, and getting control OF many Of the State
Legislatures, chartered q vast number Of banking
Institutions and set them to work at the same
policy Of expansion. The State banks, under the
LEAD Of The Dank p America and the old Man
haitian BaIl .. his city, got the public deposits
into their own vaults, taxing advantage OF the
position that Gen. Jackson had assumed, and the
whole set finally overthrew Nick Blddle and 'the
monster In the iall OF the giant institution all
the others were carried down; for being built up
on the bubble Of a inanclal expansion there was
nothing 10 support them when ii burst When
ihs did occur II was found that The corrupt poll
ticiaus aud speculating editors had completely
eaten cut the little substance 'hey he'd once pos
ees-ed and nothing was lief! for the creditors but
IN empty she'll
In the present expansion this corrupt clement
Of political banking is wanting; but
among the causes OF its developement
there Is an equally corrupt! thievish
aud scoundrelly system of grants Of public
lauds 10 worthless railroad companies, TO The ex-
tent OF hundreds Of millions Of acres, which have
been divided among the gambling contrives Of
the schemes and the corrupt members Of Con-
grcss who have passed the bills. But the primary
cause Of the expansion is the immense increase TO
the circulating medium Of the world by the pro-
ducts Of the gold fields Of California and Austria
Tia, This has produced the same effect a. was
produced by the bank expansions Of 1884, Is and
70, though with the difference hat the present cx
Iansion embraces Europe as well as the United
States. Thus Is the reason that we do not Gee
now, as we did in 1887, the strange spectacle of
cargoes of wheat coming from Europe to feed our
people of the same time that we we're negotiating
10 London immense loans Of State stocks and rail
road securities. for the purpose of prosecuting
the construction Of new roads, rev cities and
new everything just Us VIC have recently been
doing
AT that time there were negotiated in Europe,
chiefly through the London houses Of Wild Wig.
Rins and Wilson, Familiarity known as
the three We, something oves two
hundred millions Of dollars, great
Part OF which was eventually loet 10 The lenders;
while the rest Of il which had been invested in
l,ny wood railroads aud Cairo end Chicago
town lots had TO wait for the population OF ibe
county TO grow up to them before IL could be ne.
allied. Row, we have borrowed in Europe
something Ike Eve hundred millions, no small
portion Ct which is invested ia Western cities
and Western railroads, end II must 60 through
the same operation a. the loans previous 10
1887 The same revolutions must also take
place here in prices Of wheat, flour, cotton
and its fabrics, rc6l estate, an browa stone
houses on Fifth avenue They are altogether
sl9se the Limit of large consumption by the
great mass Of the community. Our banking sys
tenn must also he uprooted throughout large
portion Of Che country, for IL is based upon
thoroughly rotten foundation. These are the
elements OF the coming crisis, which in magni-
tude will far surpass that Of 1887, though II wiz,
moi bear he came relation 10 the general busi-