, 1876-06-30
THE CRISIS OF 1878,
An Account and Ner1ew of II aad Its Cn,1ses
by Horace White.


by Horace White.
Nee rsrk Nard. . ..
In ibe current number q, the FortntgMty lao
flse afsee WSs Hf ~e sin N heir Hs
as she late etl!tos ot TAR CmlcAuo TMNvsE, and
a keen thinker and vigorous writer uron all
4srstier8 CONCERNING the tariff the CURRENCY has
an interesting urtice 1.-THE Financial Crisis In
Ames!ca-" L IL, he thinks, q hansllIat!ns rc.
TT throncl, generation witl,nut twice o. thrice
breaking into a dtrMstronR 6nancia1 and CONNER.
ci1l atasnp.de. Businessmen look for a eri-s
ss., etsas aessIs. s kes!ss @ 3. wci bas naw.,.,as
Ing tho Hpparent regularity nf the vsitation. the
:" yaud e ssy, pof r
and upward movement If priccr arr cxbilaraiiny
that thc tornado always a,da With al tail spread
the porks open, ani the crew Astecp.
THE COURSE or THE rANIc.
The phcnonlrna antccedent to the csifs Of 1917
uett. says NJ. White. the usual aMcs,-a sise "
crowded r thotpurt*rsa, Inrxc ,snportatia1s, iii.
WY pan'a expanded erelit., o'sr.tm'!tne. OYER. @
% D:%Ho nf Ta ss yRE s1!o,d any u S is Sn* s saa
rhook tic etock market, the failure eine followed
ny iAre: successive sl'ocks, ~ On ths 1s.l Jay
Hitch. and On the soth tic 1'nlon Trust Company
ON the :Gl4 llcnry {'lews 4 Co: suspcndcd AVID II
t.,1lys T. ;sue r. SGa.ng ,e th5
neverf'cforr rc'ortcl 70 as srans Of ha1lsalins
eos.n,ssc" acanst We senpesafy effects of a an!e,
.nspsn,loa Of y The banks, a., i ~, notably 4
II Ut taet :''s eouatctr. un,ess feqnirtd for tGs
p.ymen of w.Ert !" Bit eer!iac them
tsf % stmilsr ioIisy waa sSr.r' Ia every ciiy but
Chicago. 10 which fthat city bcins the centre OF
the grain trade, and The time the middle of The
crop. moving scnsont currency f1~td very rapidly.
There Has y run IT Chicago. amt i've banks sns-
Pended. three of which hoon rtaanra business.
IN M ave terrified rheE1;8 Nrty Snrl
but lhr rrtntnIa VI gold over currency drcltAe,
There WIS aaauelt no 9nnahl* rate Ut 1ntrrrst
utaelntng districts begun Alsci!arElng thulr ors.
sye' t'snS s1SSa a' 1 @ % nsor 4ay s
i e.ai; 1t III had disappeared etirely hy lbs end Of
The H.onth. In tle 10Th ts':an a scrirA of ups,
inrrc hu1trfs, win were not yct hrokrn. wrru
making dtsprra!e effort. tn 5stterr prices I" so'ilr.
thing wear tl!s oll isn1rs: faetnntions of ~ Hsr
were not uncommon SonD failures took place
among 1Asse operators mofo r; inosant tta sny
at 20 s!afIf' wS i'll iiat!ie: % aoS
This "as ths largest mercantile failure Of the y'nr
a"ils .traJy 1t iii 10 li:i tsicrr the panic. il
sank slowly IL lg!|s on thu 7th of November tsc
llvi IN llcccmler In lS7l tlI.5o we're II tllu
United s4tes .nl5 ms1ean!Iie fs!l'sss iar fs..-
:.sh 0oo; ii iE75, 3740 for s:ot oo, oo'.: and IN
thu nfst luartur Of ls1u, =, hub fDr Esi. 01n, Uo
jar. J. lR7 there Wrse EnllMay L,llus In default
~ tho amount Ut $7s!'. u7. ii!Ia OF which Ss:3.
4UO tO weru bct1 ubFtad. Uf tIfa xHhi there mete
In default rrar 70 Sept. 20. l673. s:!t i1j. lou.
SIGNS PRECEDING TIE Crisis.
To what wus tlc crIsls owlM4f The Was hail ux'
hLlttt the phenomenon Of grcAt prosperity cukn-
cidcnt wih waste md dcEtruetfnn, amt during tho
next (nMs years thu cuuHtty wns fairly prosperous
In 1850 tho ot,ening u tie pscac Hallway was
artcptel - the agnal fuf genrfal vfa Of dpecua-
tlon Heal estate alsautra III prlcr; tho dow of
Easorsan war; ,a.i gran.s wsru lrrrly given. anl
i ratlruad mansa berau. with .hu us,ial curse:
auruees ot rascaltty anI disaster Vt h"tns and
Abroad. teHsrHl speculation spread on all sides;
imports anl e1po1ls increased rapidly. ahi thu
Eoans ami discounts u the ban ks mounted NJ slx
&irlcs ulare rapidly tinn the aep"sits The leHn
MARKET hAd hctn extremely caiflcioIs foe
guar ur two before thu l,anlr. but tlIeea Wa an
average rsu n thu ruiz VI !ntrre* cuiuIlnatlng lu
tho autuinn Ut lH74, from which period u gTalH.
| ally fell TIL thu spFng VI 1879, When II aSatn
commenced rising. and continued rising ti!l sep
trinlrf, when II Wcnt uut Ut sight completely.
The deposits In all tho National banks IN lh.4
wrrc $tlJ mo 00O. ana tlIu lnans and discounts
<s7., ON, DW; IN lit. they had risen 10 sr.t ta
| fND nil1 S9a0 CUU. Oeu. In New York try, while
the deposits fell III during The san,s period ft1u.
Sll7, QUO zoo tu 8lil, 900, oat, thn foans aud N.Y.
counts nuuuted from SITS, Oot, oou 10 Sluy. COO
! GOV. Thls expansion Of bunk loaus u notea