The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1878-10-24
SUPPLE
HONEST MONEY.
Speech of Hon. Carl Schurz, at
Cincinnati, 0.


FELLOW CITIZENS This is the second tim,
that have been honored by citizens of Gin
cinnati with an invitation to speak to them OF
the financial questions before the people.
thank you sincerely for the confidence which
that invitation implies, and respond to it will
deep sense of responsibility.
From time immemorial and in all countries
it has been the habit of all politicians wher
the people were laboring under business de
preston and Distress such as has been af1ictine
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 particuarize then
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 bust
ness and that, therefore, business broke down
This charge has been so often and so conclu-
svely refuted that it well nigh exhausts ones
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 nfationists need that story for their
theory, They cannot do without it, and there
fore valiantly stick to it. What are the facts ?
l have the official tables before me. There
was, indeed, a 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 1908, $780,
o566I in 1870 it was $500, 375,S99.4S in
1871 it was $7I7,876751 .o6 in 1872 it was
$738,57o, 900. Sc in 1873 it was $3.50, o62 1868,
ID. 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 1863, and the compound interest
notes. Trse, 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 1879 it
amounted to over fifteen millions more than in
1860. The fact, then, stands thus: The
currency was contracted between 1866 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 inhationists 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, it 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 $3.50, o62, =
368.o4 to $78I 400, oI6.I7; that is to say, over
thirty lone 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
criticise those in power for things thought
wrong; but 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 equinoctal storms or for the
depredations of the locusts in the West. Ii
the Government is to be 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 THE COLLAPSE.
Let us examine the causes of the collapse Of
1873, and the subsequent depression, as un-
prejudiced business men, We all know that
at the same time VIXEN The panic occurred here
in the autumn of 1873 similar crisis broke out
in Europe, and swept over all Austria, the Ger
man Empire, and almost the whole European
Continent except France, while severe bust.
ness depression was felt in England Surely
although this is great country, our Congress
and Administration and the Republican party
have H. IL Al
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 over
those countries as we'll as our own; and upor
candid examination you will find that as the
effects were similar IN the two hemispheres, sc
were the underlying causes.
In none of those countries was it currency
contraction that brought about the disaster
Just as little as in our own; there was rather
an expansion of it, especially in Germany
No, the real causes were, as have more thar
once had occasion to describe them great wars
resulting in an immense destruction and waste
of wealth; large industries ministerins
to the work Of destruction instead .
producing additional wealth; but afte
that, excessive enterprise, stimulated BY
apparent success the sinking of larg,
amounts of capital in great undertaking
which could yield no Immediate return, -sucl
as the building of railroads where they wer,
not needed; for anticipating the future. Tn,
invention and introduction OF new labor-savins
machinery, creating new facilities of ,produc
ton, and melting excessive manufactures be
yond present demand while speculation, deal
ing and gambling in all sorts of imaginar,
values /; an immense number of people frantic
ally striving to make money quickly by an,
means exceE solid work an infatuated faitI
IN the certain success of windy schemes, anc
an unnatural atraining 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 thai
he was, and therefore spending naore than h
could afford hence widespread extravaganza
and improvident habits.
WHAT THE CURRENCY HADsTo DO WITH IT
And if we inquire what the currency had t
do with it, we shall find that in this countr
our irredeemable paper money, by its depreci
alton running up prices to fictitious point