The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1878-08-08
HARD TIMES ACCOUNTED FOR.

HOW many hopes lie buried here
In thatlittle robe of white
HARD TIMES ACCOUNTED FOR.
CONTRACTION THE CAUsE-BErTER TIMES
COMING.
In response to the letter OF number of
citizens OF this county requesting his views
on the prospects OF the country for a revival
OF its life-and return OF its prosperity, Hon.
A. II. Ell. Stuart, of this city. published an able
letter in the Vmdicator of June 9Th, which
we reproduce now rs particularly pertinent
to the approaching congressional campaign.
1t is as follows
GENTLEMEN Il had the honor to receive
your letter Of the 2Sth of May, in which
you refer to the gloomy coalition of the
financial affairs OF the country, and the
distress which has resulted therefrom, and
ask me to give you my opinion of the prob
able duration of this state of things, and
OF the prospects of q change for the better.
Recognizing among the signers of this
letter, many of my most valued friends and
intelli gentIneighbors and properly aprreciat-
ing the motives which prompted you to send
it, cheerfully comply with your request
| Although lay no claim to the spirit of
| prophecy, yet, having passed the age Ct
seventy years, for more than fifty Of which
l have been an attentive and thoughtful OBJ
server of passing events, it would be strange
ii l had not protited in some degree by my
long experience and observation.
Periods of financial revulsion and bust
ness depression, like that under which we
are now suffering, are not without prece
dent in our history-on the contrary, they
| frequently occur in countries where great
commercial activity and enterprise exist.
Hence we have seen them prevail from time
to time in England. France and Germany.
as well as in the United States. Sometimes
they result from what is called ''overtrading"
or the injudcous investment of too large an
amount OF capital ia some branch of bust
ness, and sometimes from unwise legislation,
but more frequently they follow long and
exhaustive wars. In all cases, however. the
| immediate cause is the sudden contraction
of the currency, Which had been previously
unduly expanded. Their continuance is in
proportion to the magnitude of the causes
which produced them.
We have had four very distressing revul-
sions in the United States since the achieve
ment Of our National Independence.
THE PANIC AFTER THE REVOLUTIONARY
| WAR.
The first followed the close of our revolu-
tionary war, during the progress of which
contest, the resources of the people were
taxed to the utmost limit. A large debt was
contracted, and the country was flooded with
"Contnental money!" which steadily de-
preciated, and finally lost its purchasing
power, leaving our fathers without the ne
cessary pecuniary facilities to carry OH the
! ordinary business between man and man.
This continued until 1871. two years after
| the Inauguration of the Government of the
United States. In that year, under the au-
spices of Alexander Hamilton, a bank OF the
United States was chartered by Congress,
to continue for twenty years British CAPT
talists subscribed literally to the stock OF the
bank, and Its wise administration contributed
largely to the relief of the people, and the
revival of busins IS. Gradually the traces of
the devastation occasioned by the war, were
! obliterated and comparative prosperity was
restored. This occurred in the latter part
of the eighteenth century. It will thus be
seen, that it required the labor of ten years,
to recover from the effects OF this war.
THE PANIC OF 1919.
From the close Of the last century, until
1911, mainly through the agency of the bank
of the United States, the country was
|
at the pleasure OF the holder into gold or
silver.
| In 1911 the charter of the bank expired,
| and for reasons which | need not pause to
| consider, Congress refused to charter it j;
and hence the country was left without an
| institution. competent to provide a safe and
uniform currency. AS might have been
foreseen, state banks, as substitutes. sprang
up like mushrooms, in all sections. which
! flooded the country with irredeema BILE paper
money! Under the influence OF this expan-
sion d fictitious prosperity was created.
Prices Of every species of property rose to
fabulous rates, and spirit of gambling
speculation pervaded the whole country. In
1872 war was declared against Great Krtain
anG the demands for the products OF agr
culture created by 1t, intensified the popular
delusion that a plentiful supply Of $50
| called money, and nominal high prices for
everything were evidences of real prosper
ity.
In the beginning of 1915 the war closed,
and sagacious statesmen like Mr.. Calhoun,
Mr.. Clay and Mr.. Lowndes, detected the
cheat, and with view OF restoring a healthy
condition of affairs and the blessing OF q
sound currency, introduced into corgress.a
bill to incorporate the Second Bank of the
United States. In 1916, under the lead OF
MI. OdlIluuIl, GiIt Dlll was PdsStu anu re-
ceived she sanction of Mr.. Madison.
The bank with capital Of s35, 100000
two-fifths OF which was owned by the gov
ernment of the United States, was organ
lied early in 1916. 1t at once addressed it.
self to the duty of restraining the exit ava
giant issues of the State Banks, by calling
on them to redeem their notes and thus
opened the way to the resumption of specie
payments. This compelled the State Banks
to curtail their discounts aud call on their
debtors for payment.
A distressing contraction of currency en-
sued and there was general shrinkage of
values, very similar to that which we have
| recently witnessed. This process of con-
traction continued from 1917 until about
1925. During that time the price of -four
declined from Sl4 and SIS to 3, and 50. so per
barrel.
Finally the currency was reduced within
proper limits and specie payments were re-
sumed. From that moment business re-
vived-bank notes were equal to specie,
because they were exchangeable for specie
gambling speculations ceased trade was
established on a solid basis; entire conf
dence was felt in the currency, and every
farmer knew when he sold his products that
he was getting the actual money and not
mere promises to pay in exchange.
Thus the second great crisis in our finan-
cal affairs was safely passed, mainly through
the conservative agency of the Bank of the
United States, and the whole country rap
idly advanced in prosperity until 1888.
BY the terms of its charter the continue
ance of the bank was limited to twenty
4 years which expired in 1886.
THE PANIC OF 1887.
lii 1882 the bank applied to Congress for
a renewal of its charter. The subject was
maturely considered in both houses, and
while it was pending Mr.. George McDuffie
made a mastery report (Which is well wor-
thy OF perusal at this day. in which he de-
= Of bo b0nl in,