The New York herald., 1878-09-29
The Business Depression and
It's Rem edy.
is THE GOVERNMENT RESPONSIBLE?
Necessity of Sound National and
Individual Credit.
THE GREAT DUTY OF THE HOUR.

Secretary Schurz addressed q large meeting to-
night IN Music Hall on the financial situation. He
said:-
This is the second time that have been houorcd
by citzcns of Cincinnati with invitation 10 speak
10 them the financial qucstions before the people
The remarks am going 10 make tonight wi be IN
certain sense supplementary to those made hero
three wears ago then skeiched the disastrous
quonccs which policy OF currency imitation would bring
after 10 the merchant, Tue manufacturer, The business
man. vol as the farmer and the laborer Tor wages,
and especially the latter Al that time The people OF
ONO, IN their state election, admi mustered wise
noble rebuke TO the initiation movement then at.
tempted by the democratic party OF this State. IL
wa. bo hoped that this reOuke wouli sufficiently
check that movement TO prevent its repctitI0n.
That hope has been disappointed Indeed,
botn political parties, In their national con-
ventions OF 1876, pronounced IN favor OF an early
resumption oil specie payments and thus seemed TO
be agreed as 10 The object to be attained; and the
Preparations Tor resumption have SO iar proceeded
that It Is wtnn immediute reach. But. while We
within u hairs breadth OIL hnsI settlement oi the
v,x.d question, the ,pfation mania has broken out
airesn; and II must be admitted that many we'll
meaning citizens, under the pressure OF temporary
distress are honestly seeking Tor means oil reiiel and
tending toward CONCLUSIONS which, IN the opinion OF
those Who think as do. are aiiscious anu fraugnt
win great danger 10 the national honor as well as to
the public welfare To that class OF honest we'll
meaning CItiZsns snail respectfully address myself.
A FALLAcioUs THEORY.
From time tminemUral aud IN all countries II has
been tho habit Of politicians when tho people werc
laboripg under business depression aud dstf
as has have affecting Tor the last ve years
charge those managing the affairs Of The government
with the responsibility for IL aii-and so they do nOw
TINS charge has been 60 often ana so concusivey re-
fu,ed thht IL well nigh exhausts ones patience 10
reicr TO il again. But you nave heard OF men who
tell The yarn often that they a last believe II
that The crash OF 1878 was caused by contraclion
Indeed tins inhati0nists nssd that story for their
theory They cannot do without 1t, and therefore
vaantIy stick 10 H. What are the facts? have OH.
cal tables before me. lherc was indeed contraction
OF paper currency from 1865 10 1865 but the Dusi-
ness collapse did not occur IN 1868. IL came hve
years later, and those five years between 1868 ard
1878 are generally regarded as years OF uncommon
prosperity. Now, what happened with the currency
between 1865 and 1878? lu 1868, conlracsion was
stopped. 1859, the amount OF paper currency out
Suu1s s7"u va AS is9i u vas Isl 90 s
1872, was $73S 570,9O3 81; IN 1873, was
$75o o62, 1868 "a. ms statement lnciudes not only
Inc green backs The national bank notes and the rac
tionsi currency but ALTO the state bank circuaton
be demand notes. ths ono and TWO year notes OF 1858
and tho compound interest notes. Thus 1t appears
that during several yoars preceding the crash OF 1873
tho currency WAS not only not oonirac'ea but very
materially Increased, SO that IN 1873 amounted
TO over $50, 000 600 moro than IN 1869.
RIAL CAUSES OF FINANCIAL DErKEssroS
Lot US examine the causes oil the collapse OF 1873
aud tho subs seQuen depression as unprcj busi
ness men. We all kLow that ~ the same timo Mhen
panic occurred hero 10 the autumn OF 1874 simi.
lar Crisis broke out In Europe and swept over all
Austria, the German Empire and almost The whole
European Continent, except France while a severe
business depression was lolt In England. Surely, al
though Ihis ID great country, Congress aud tho
ADMINISTRATION ana the republican party cannot have
been al the bottom OF oil that and yet The effects
produced by the crisis IN Europe were in almost
every respect tho same AS here Speculation collapsed,
values shrank Violently, real estate went aown.
banks, manufacturing aud trading hrms failed In
large numbers, extensive branches OF INDUSTRY
stopped, laboIins mon wero thrown out Of employ
ment or compelled 70 work for lower wages, and
prt~vous distress spread over all those countries
well our own; ana upon candid examination you
viii mud that, ss The effects we're similar The
TWO nemispheres, 80 we're The underlying causes.
Iu mono oi these countries was II q curreacy con-
traction tnat brought about The dsaster just as lit
tie rs IN our own. There was rathcr an expansion
OF u, especially in Germany. No. the real Causes
wcre as l have Dad occasion more than once to
dexcIioc them, great wars, resulting IN Az immense
destruction and waste OF wesith; large industries,
ministering to the work OF destruction instead OF
producing additional wealth; bu: alter that excess
sve enterprise, stimulated Oy apparent SUCCESS, Inc
siukiug oi large amounts Of capital IN great under
taSings which could yisla no immediate return-
such as the building OF railroads where they
not needed, far anticipating the iuture tue inven-
tion Introduction oi new labor-savng machinery,
creating new iscities OF production and uciting
cessivc anuiacIures beyond present demand; wnIls
speculation, dealing ana gamoiipg In all sorts OF
peopie isapis'y rau"esiy s s.rvn. % 10 max. money
quickly by any means except solid work;
M infatuated faith IN the certain success o WINDY
schemes unnatural straining oi the credit system
by pushing speculation aud enterprise lar beyond the
means those engaged IN IT, and finally almost every
body believing himself richer tnan he was and there
lore spenaing more than he could aforu nsbce WIDE
spread extravagancs aud improvident habits And II
We inquire what the currency mad to do with u,
shall nnd that IN inns country our redeemaDs paper
money, by It's depreciation, running up prices to
fictitious point. stimulated the spirit ol rsckiessness
and gambling IN almost all branches OF enterprise
business, inccd extravaganza, and thus strength
ensd all the bad and demoraiizing influences winch
are usually active at sucn perioa.
ILLUSIONS DisPELLRD
Such things are apt to 20 on swiinmingy for some
time but Illusions and iios will not last always, es
pecialiy IN business matters Alter u wniis 1t will
turn out that million ol men engaged II acuve war
iare have consumed and destroyed wealth, but lot
produced any That railroad running from point
nowhere TO point nowhere cannot pay dividends until
II has passenGe ana freight TO cafry that The value
OF real estate does not depend upon the imagine
OF ITS owner, but upon the uso that
towns where nobody lives and NOBODY inicnus to
live viii not bear heavy mortgages; tnat articles OF
luxury produced boy ond actual demand viii become
a ug IN the market: tnat snares In JOINT stock com
psnies, however skilifaiy baooned by operators,
will At last become worthless, II tho enterprise
yields no profits; that mon who borrow moro tnan
they can pay must at last break, aud that those
who spend more than tncy can earn Will finally bo-
come paupers. This lshI-tbe light OF sober Truth
usually breaks all OF sudden upon the people, The
Illusion all at once vanishes, the bubble bursts and
we set down heavily upon tho hard rock Of real
TACT That thing happened TO us In 1873 Then we rub
eyes and look around and wonder how u all came
about and yet IL the most natural thing In the
world. People who Invest In air castles have right
10 expect else than that these investments
will at las, vanish into the air they wore made OF
CURE
The best th ing we can do alter such n collapse IN
quietly TO gather up our hvc seuses and 90 work
ike mon TO repair our shattered fortunes Aud how
those shattered fortunes DO repsredf First, by
recognizing tho error oil our ways and dts
earning all sell f-deceptions aud dcusions; by
rene Dering that our wealth must con-
sist In what We produce aud shave, and
not IN Whht We ufenm OIL, Uy hOsthlning, Conse-
| Quentiy, from all wnoy schemes to make ourselves
rich by printing the word dollar upon piece vi paper
By acting upon the principle tnat tue only honest way
get rd OF our dcbts Is by paying bcm and that
become prosperous only by producing things that
usoiul aud by spending less than We earn These
may LOOK Ike very old fashioned homespun DOCTRINES
| but whatever our modern nuancia juggers may Try
TO have you believe, these doctrnes are now just as
| good MS they were thousand years ago, ano they
| point the only way out oi our dlfhcultea
| There is n other To the honor OF the American
people be II said very large majority Of them have
laan ct N ~ a luat ye
years. ana ney are all the better for H. II Is true
good deal OF wild talk has been INDUCED IN about all
sorts OF me 0ds to manufacture money out OF noth
ing ana distribute II 30 as 10 keep evcrybody's
pocket full OF cash, thereby putting ali the country
at ease. But although that wild talk has bcfogged
some aud npoded needu legislation, yet the people
on the whsle have been sturdily at WORK producing
| useful things aud practising wise economy, aud
while the results OF that activity nave not yet
been clt IN all the walks OF human industry
and all classes Of society, yet venture TO say that
during the last ave years The Amercnh peoDte have