The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1878-10-17
The Collapse Of 1878.

We commend the following extract from
the great speech of Carl Schurz, delivered in
Cincinnati, last week, on the currency ques-
tion,to the careful consideration of those who
contend that contraction was the cause of
the collapse of 1873. 1t will repay attentive
perusal and study by every one who wants
to get at the truth:
Let us examine the causes of the collapse of
1873 and the subsequent depression as unpreju-
diced business men. We all know that at the
same time when the panic occurred here in the
autumn OF 1873, similar crisis broke out in Eu-
rope, and swept all over Austria,the German EN-
pire and almost the whole European Continent.
except France, while a severe business depres-
is a great country, our Congress and Adminstra-
ton, and the Republican party, can not have
been at me bottom OF all that and yet the effects
every respect the same here. Specllations
collapsed. values shrunk violently, real estate
went down, banks, manufacturing and trading
firms failed in large numbers, extensive branch
es OF industries stopped, Iaboring men were
thrown out OF employment OF compelled to work
for lower wages, and grievous distress spread
over all those countries as well as our own and
upon candid examination you will find that as the
effects were similar in the two hemispheres SO
were the underlying causes.
In none OF these countries was it a currency
contraction that brought about the disaster lust
pansion of it, especially in Germany. No, the
real causes were as have more than once had &C.
casion to describe them: great wars result
ing in an immense destruction and waste of
wealth; large industries ministering to the work
OF destruction, instead of producing additional
wealth; but after that, excessive enterprise, slim
ulated by apparent success; the sinking OF large
amounts OF capital in great undertakings which
could yield no immediate return, such as the
building OF railroads where they not need;for
anticipating the future; the invention and intro
duction OF new labor machinery, creating
new facilities OF production, and melting excess
i've manufactures beyond present demand while
speculation, dealing and gambling in all sorts of
imaginary values; an immense number of people
frantically striving to make money quickly, by
any means except solid work; an infatuated faith
in the certain success OF windy schemes an I'M
natural stralnlng OF the credit system by pushing
speculation and enterprise far beyond the means
OF those engaged in it, and finally, almost every
body believing himself richer than he was, and
therefore spending more than he could afford;
hence widespread extravaganza and impr evident
habits. And; il we imagine what the currency
try our 1rredeemable paper money, by its depre-
citation running prices up to a fictitious point
stimulated the spirit OF recklessness and gamb-
ling in almost all branches of enterprise and bus
mess, melted extravaganza. and thus strengthen.
ing all the bad and demoraliZing influences which
are usually active at such period.
Such things are apt to go on swimmingly for
some time. But illusions and lies will not last
W lille it will turn out that million OF men en-
aged in active warfare have consumed and de-
Wa bm not 1b on rail-
VIII ere cannot pay dividends until it has passen-
gers and freight to carry; that the value OF real
estate does not depend upon the imagination of
its owner, but upon the use that can be made of
it; that corner lots in paper towns, where nobody
lives and nobody intends to live, will not bear
heavy mortgages; that articles of industry pro-
du ced beyond actual demand will become drug
in the market; that shares in joint stock compa-
nj es, however skilfully ballooned by operators,
will, at last, become worthless if the enterprise
yields no profits; that men who borrow more
than they can pay must at last break, and that
those who spend more than they earn will
finally become paupers This light, the light OF
sober truth, usually breaks all Of sudden upon
the people. The illusion all at once vanishes the
bubble bursts. and we are set down heavily upon
the hard rock of real fact