Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1878-10-24
HONEST MONEY.
Speech of Hon. Carl Schurz, at
Cincinnati, 0.
Solid Arguments in Favor of
Resumption.

s1nnati with an invitation 10 speak TO them on
the financial questions before the people.
thank you sincerely for the confidence which
that invitation implies, and l respond to it with
a deep sense OF responsibility.
From time immemorial, and in all countries
it has been the habit Of all politicians, when
the people were laboring under business de.
preston and distress, such as has been affecting
US for the last FIVE years, to charge those man
aging the Affairs of the Government with the
responsibility for it all. And so they do now.
When you ask them to particularize their
charge in our case, they will tell you that the
business collapse Of 1873 was brought on by a
contraction of the currency that the Govern
ment withdrew from the business of the coun-
try the means with which to carry on that busi-
ness and that, therefore, business broke down.
This charge has been so often and so conclu-
Svely refuted that it well nigh exhausts one S
patience to refer to it again. But you have
heard of men who tell the same yarn so often
that they at last believe it themselves So it
may be with those who still insist that the
crash OF 1873 was caused by contraction. In
deed, the inhationists need that story for their
theory. They cannot do without it, and there
fore valiantly stick to it. What are the facts |?
have the official tables before me. There
was, indeed, contraction of paper currency
from 1865 to 1868 but the business collapse
did not occur in 1868 1t came five years later,
and those five years between 1868 and 1873
are generally regarded as years of uncommon
prosperity. Now, what happened with the
currency between 1868 and 1873? In 1868
contraction was stopped. In 1869 the amount
of paper currency outstanding was S6e3, e46,-
o56.6I in 1870 it was $500, BIS 500 4S in
1871 it was s7I7,S7s,75I.o6 in 1872 it was
S73S,s7o,9o3 81; in 1873 it was $3.50, o62 ,368,-
IA. This statement includes not only the
greenbacks, the National Bank notes, and the
fractional currency, but also the State Bank
circulation, the demand-notes, the one and two
year notes Of 1868, and the compound interest
notes. True, it appears that during several
years preceding
THE CRASH oP 1873
the currency was not only not contracted, but
very materially increased, so that in 1873 it
amounted to over fifteen millions more than in
1869. The fact, then, stands thus: The
currency was contracted between 1865 and
1868, and several years of prosperity followed.
The currency was expanded from 1860 to 1879
and the collapse Of business followed If it
were true, as the inlationists insist, that the
increase or decrease of the currency were at
the bottom OF Our prosperity and depression
respectively, we would have to answer that,
according to the clearly ascertained facts of
history, il was contraction that caused pros
perity and expansion that caused the collapse.
| might even add that between 1873 and 1874
the currency was expanded from $50, o62. :
36S.94 to 1881 400 Io.I7; that is to say, over
ihrty- one millions. and yet the depression was
not only not relieved, but grew in distressing
severity. Our initiation friends may not relish
that kind OF reasoning, but what have you to
answer Those who know me will bear me
witness that | have never hesitated to
critcise those IN power for things / thought
wrong; but I candidly think to charge
those in power with having brought on the
crisis of 1873 by contraction Of the currency
would be just as reasonable as to make them
responsible for the equinoctial storms or for the
depredatons of the locusts in the West If
the Government is to he made responsible for
everything, then | solemnly demand that the
abundant crops of this year be put to the credit
of the Administration, and of the Department
Of Agriculture in particular.
CAUSES OF TIE COLLAPSE.
Let us examine the causes of the collapse OF
1873, and the subsequent depression, as UNI
prejudiced business men. We all know that
at the same time When he panic occurred here
in the autumn OF 1873 a similar crisis broke out
in Europe, and swept over all Austria, the Ger
man Empire, and almost the whole European
ness depression was felt in England. Surely,
although this is a great country, our Congress
and Administration and the Republican party
cannot have been al the bottom of all that;
and yet the effects produced by the crisis in
Europe were in almost every respect the same
as here. Speculation collapsed, values shrunk
violently, real estate went down; banks, man.
ufacturers, and trading firms failed in large
numbers, extensive branches of industry
stopped laboring men were thrown out of en-
ployment or compelled to work for lower
wages, and grievous distress spread all oveI
those countries as well as our own; and upon
candid examination you will End that as the
effects were similar in the two hemiSpheres, SC
were the underlying causes.
In none of those countries was it a currency
contraction that brought abort the disaster
just as little as in our own; tl.tre was rather
an expansion of it, especially i'll Germany
No, the real causes were, as | nave more than
once had occasion TO describe them, great wars
resulting in an immense destruction and waste
Of wealth; large industries ministerine
to the work OF destruction instead o.
producing additional wealth; but after
that, excessive enterprise, stimulated By
apparent success; the sinking of large
amounts OF capital in great undertaking.
which could yield no immediate return, such
As the quitting OF IduTOauS Wntfe tney WeIS
not needed; for anticipating the future. The
invention and introduction OF new labor-savins
machinery, creating new facilities of produc
ton, and Eciting excessive manufactures be
yond present demand ; while spe culation, deal
ing and gambling in all sorts of imaginar,
values; an immense number OF people frantic
ally steiving to make money quickly by any
means except solid work an infatuated faitl
in the certain success of windy schemes, anc
an unnatural straining of the credit system b,
pushing speculation and enterprise far beyond
the means of those engaged in it, and finally
almost everybody, believing himself richer thar
he was, and therefore spending more than h,
could affotd hence widespread extravaganza
and improvident habits.
WHAT TIE csRgEECY HAD TO Do WITH IT.
And if We inquire what the currency had t
do with it, We shall find that in this country
our irredeemable paper money by its depreci
alton running up prices TO fictitious point
stimulated the spirit Of reckleSsness and gam
bling in almost all branches of enterprise and
business, melted extravaganza, and TINS
Strengthening all the bad and demoralizing in
fiuences which are useally active at s4sh a
period.
Such things are apt to 60 ON swimmingly for
some time. Bat Illusions and lies viii not last