The Fremont weekly journal. [volume] (Fremont, Sandusky County, Ohio) 1867-1877, 1874-04-17
For the Fremont Journal.
PAN1CS AND REVULSIONS-
CAUSE AND REMEDY.
BY H. O. SHELDON.

PANIC is fear or terror inspired from rll5-
apprehension. or without Just cause.
A REvULsIoN in medicine IS a change OF
disease from one part to another; In COM
merce, It is a withdrawal of facilities, produc-
ing arrangement, often distress.
Panics sometimes cause revul-
sions: revulsions occasion panics.
Our country has been the theater of
periodic revulsions. The writer re-
members only those of 1917, '27, '37
al, '57, '67 and '73. In 1918, he
was clerk in a store where most of
the business was done with depreci-
ated currency. 1t would too much
extend this article to bring up all the
ooncurring causes of the several
monetary panics and revulsions
which, like frightful tornadoes, have
spread desolation in their path. The
one great, and most potent cause
has been the issue Of promissory
notes as money by banking corpora
tions upon a professed specie basis.
They generally issued a promise to
pay three dollars for one Of their
capital, and that capital often com
posed in part of the promises Of
directors or stockholders. The sys-
tenn was derived from monarchial
governments. 1t was a cunning
royal device to promote aristoeracy;
to make the rich richer and keep the
poor in proverty. In calm, when
nothing occurred to disturb conf
dence, business fourished, and these
promissory notes were freely used
as a medium of exchange. But the
shipment of gold to pay foreign bal
ances, the taking a foreign govern
ment loan by capitalists, short crops.
or war, produces demand which
curtails discounts, deranges prices,
engenders suspicion, causes a run
upon banks: the suspicion of one
causes the overthrow of others, fac
tories stop, laborers are thrown out
of employ, families suffer and nation
al wealth decreases by millions.
Another potent cause ofrevulsions.
growing out Of the specie basis bank
theory, is the high rate of interest.
Money kings and usurers always de.
mand a high rate of interest. In
commercial country it is impossible
to entirely dispense with credit.
When higher rate of interest is re-
quired than thssprofts of business,
it must come from capital or labor,or
bankruptcy follows. To ward of
this the manufacturer adds to the
price Of his wares the interest of his
capital; the wholesale merchant adds
the interest he pays to cost; the re-
taller adds his profit with the inter
est he pays, and all must come out
of labor. High prices will diminish
employ and cripple industry; con
sumers use less shoes, less clothing,
less necessaries, or recklessly stretch
credit; somebody becomes bankrupt.
Here is revulsion if not a panic.
Usurers grow fat and sheriff's sales
are common until slowly recupera-
ton prepares for another revulsion.
1t is a well ascertained fact that
the national wealth increased about
35per cent. per annum for the last
seventy years. All interest paid be-
yond that must come from capital or
labor; the higher the rate the sooner.
in general, must come the revulsion.
Now let US look at some facts.
Paper money, if good, is better than
gold, because more convenient. Be-
fore the revulsion of 1887 the notes
Of the United States Bank, in some
parts of the Union, were to Is per
cent. above gold. When the gov
ernment required specie for land,
banks were crippled and failed.
In our late civil war the banks were
the most potent foes of our nation.
They shut up their vaults and re-
fused to lend to the government ex-
cept at enormous interest; they sus-
pended payment, deprecated our
currency, which they bought for half
price, and when the war was over,
sent their directors to Congress-"I
see," said a speaker in the House,
"eighty bank officers here, ")-who
legislated for themselves, diminish
ed the circulation, reducing the price
of property and labor, controlled the
government and legislation, demand
ed gold bonds for their deprecated
paper; changed terms of contracts
to give themselves gold instead of
currency; taxed tea, coffee, salt and
almost everything we eat or wear to
raise gold, discriminating in favor of
the rich; permitted themselves to
import rich tapestry to adorn their
splendid parlors at 35 per cent. while
they charged 1S5 per cent. in gold to
a poor widow for the coarse blanket
which covered her shivering chill
dren. They created monopolies and
rings; gave to them millions of acres
of the fairest portion of the peoples
inheritance; crippling the country
by paying out the gold wrung out
by tariff and taxation for bonds not
due. They directed capital from in
dustrial pursuits which could EN-
ploy labor and pay a small per cent.
to banks and money shaving, which
paid 10, 20 or 25 per cent, and when
merchants, manufacturers and toll
ers had deposited in their vaults
their hard earned money, they closed
their doors, refused to let depositors
have their own; embarrassed our
merchants, raised interest at one
time to l per cent. a day, stop
ped factories, threw thousands
upon thousands out of employ, pro-
duced untold distress among families
of working men and women, dimin-
ishing the national wealth by mil
lions, and all this when there was as
much money in the country,and over
forty millions reserve in the govern
ment vaults!
Had the government issued their |
own money directly to the people, |
instead of furnishing it to banks
some four hundred millions-they |
would have saved more than that |
sum, which has been, and is to be,
Wrung in shape of taxes from the
toiling laborers of the land. Bank
ers and brokers produce nothing
earn nothing, This young and Wig
Orous country may recuperate, but
the same causes will produce like ef-