Lyon County times. [volume] (Silver City, Nev.) 1874-1907, 1878-09-07
HISTORY OF OUR pANIcs.

The Panic Of 1S19-Workings Of
the United States Bank-The
Removal of the DepOsits-The
Crisis Of 1887 and 1857.
The Pittsburgh Telegraph publishes
review Of the various financial
panics which have occurred in our
history, and after reciting, briefly,
the history of the United States Bank
up to the year 1919, thus tells the
story of the disaster that befel our
trade in that year: ,4.,
"Fortunes were wiped out in a
day, speculative companies that
stood everywhere thick as shocks in
wheat field, vanished magically,
and shareholders were aghast; SUBJ
urban lands and city lots that were
to return a hundred fold, dropped to
almost worthlessness. AS showing
the effect of the panic on real estate
here, an old citizen says that land
on Boyd's Hill, held at $4,000 an
acre dropped to 800; lots on Fourth
avenue, held at $4,000, fell to 500;
property in the region of Market
street, on which were good brick
houses, only partly paid for, were
wholly abandoned, as property quite
as good could be bought for less
than the sum due on these. But
the United States Bank, with its
capital of $35,0O0,oO0 weathered the
storm, and by furnishing the country
again with stable currency Of uni
form value, won back coy confidence,
and again compelled the State Banks
to go into liquidation, or to raise
the value of the notes to the stand
ard of the national bank notes. This,
together with the temporary settle
ment with the slavery agitation by
the compromise of 1920, and especi-
ally with the impetus given to home
manufactures by the tariff of 1924,
and the work of internal improve
ments, set the country upon its feet
once more. a1g sCtnnT N7e
at is not in man however to let
well enough alone, above all when
it stands in the way of the political
theory. The second charter of the
bank was 70 expire in 1886. When
the Thirty-third Congress assembled
on the Cd Of December in that year,
President Jackson said in his mes
sage that in the interim his Secretary
of the Treasury had ordered the
removal of the Government deposits
from the United States to the State
banks, and he gave as his principal
reason for this that the bank had
used these deposits for partisan
purposes. The parliamentary warfare
that followed this action was un-
paralleled for industrious vindictive-
ness, and is too long to be narra-
ted here even if germane to the sub
iect. The constitutional point in
volved was the old one that Jefferson
had contended for, viz the power to
charter banks is right reserved
to the States; they alone could sup
ply a constitutional paper currency.
The State rights question had come
bounding to the surface again. This
authoritative recognition of the
value and usefulness of the State
banks, and the importance attached
to them as Government repositories,
stimulated their organization to an
extraordinary degree. Many were
chartered to replace the United
States Bank, the closing of which was
expected. The State banks increased
from 282 in 1880, to 632 in 1887.
During the same period their capital
rose trom$14O,00O,0 900 to 29O,0O0,00O
their circulation from 61,000,000 to
149, 900, 900; their loans and discounts
from $500. 100000 to $4S5, 100000
their deposits from $55,000,000 to
127,000,000. Thus during these
seven years the banking facilities of
the country had been considerably
more than doubled, while the increase
in the capital of the country was
small, and there was no manifest
need of the addition of a dollar to
the currency. The result of the in
crease of the currency was an unex-
ampled delirium of extravaganza and
speculation, in the midst of which
came the destructive collapse of 1887.
Ruin reigned on every hand; almost
every business house in the land was
involved in the common wreck.
Collections were next to impossible,
and in some States, as notably Mis-
sippi. wholly so. Credit everywhere
was destroyed. There was a general
suspension of the banks at the. first
blast Of the storm in 1887. In 1888
they made heroic endeavor, and
resumed payment, but the year
following those of Philadelphia aud
in the regions Of the South and West
again bent before the storm. The
distress was painful, and during the
first two years Of the panic il was
necessary to import large quantities
of food from Europe. The country
that short time before abounded in
what is called wealth, and boasted
loudly of its many resources, GOULD
not furnish bread to the hungry.
The failure of the banks holding the