The great West. [volume] (St. Paul, Minn.) 1889-18??, 1890-03-07

elements were excessive credits, and there
were few things that could be bought n sold
that were not affected by it.
In the west it was confined to wild lands
and lands unimproved> and town lots, many
Of which never had any existences except
upon the recorded plats. It was speculation
similar to that in the timber lands of Maine
few years before. Lands bought Of the
government at $l.25 per acre were soon sold
on credit at 81, IS and in some CASES So
Hundreds Of tracts were laid off in town
lots where the original forests were still
standing. What took place under my own OBJ
servation seems now to be too absurd I'd have
been real On the Maumee river, from it's
mouth on Lake Erie, there was for niles a
succession Of towns. Some of them. like
Maumee City, Perrysburg, Manhattan and
Toledo, were realities, but most of them ex-
listed upon paper only. In the spring oe 1886
a young man whom met at Maumes City
said to me that he had made great deal Of
money in few months. To my inquiry how
he had made it, he replied, s'By buying and
selling lots" "Maumee City," said he, Giles,
as you know, at the foot Of the rapids, and is
destined to be one of the great cities Of the
west; property is rising rapidly in value, and
am buying and selling every day."
"How did you raise the money to COM
mence withf'
"Oh, very little money is required in this
business. pay when buy, and l require
when sell a lot few dollars to bind tho bar
gain; but nearly everything is done upon
credit"
On my way from New York to Fort WAYNE
in the same year stopped over night at a
hotel in Toledo. After dinner noticed that
there was gathering Of gentlemen in the
parlor, and in the course of the evening was
waited upon by one whom knew and invit-
ed to join it. Our rule, said he, is to admit
no one to these meetings who is not worth
| $1,000 AS you are q banker, You must be
worth at least that. This was far from being
the fact, but accepted the invitation. The
| company consisted of gentlemen some of
whom knew personally and others by repu-
tation. They were politicians, scholars: writ
ers, and one or two of them were authors of
| consideral renown; but not one was there
whom recognized as being engaged in regu-
lar business pursuits. 1t was sort of pri-
vate exchange, at which the members made
themselves rich by buying and selling to each
other lands and town lots. There was at
times q good deal of excitement, much like
that which is witnessed in the New York
Stock Exchange. When the meeting closed
| every one felt that he was richer than when
| it opened. In few brief months there was
| not one of these hundred thousand dollar men
who was worth hundred thousand cents
| RESULTS OF THE SPECULATIVE MANIA
| The same speculative mania prevailed to
some extent all over the country. It origi-
mated in unwise extension of the credit svs-
! tenn, which was mainly the result of the re-
| moval of the government deposits from the
United States bank and the placing of them
| in state banks
When the deposits were removed there was
among conservative men great apprehension
| that the effect would be severe financial
| trouble. To prevent this it seemed to. be the
| understanding between the secretary Of the
treasury, acting under the direction OF the
president and the banks-pet banks as they
were called-that as they had been favored
by the government in the use of the public
moneys, they should deal literally with their
customers. This they did, aud as their CAPT.
tails were sufficient to supply the demands of
healthy business, the loans of the govern
| ment deposits were made to men who were
engaged in speculative enterprises Then,
too, many OF the states were engaged in
works of internal improvement, and we're
spending large amounts of money which they
had obtained by sales of their bonds in
Europe.
In addition to the large volumes of cur
rency thus put into circulation bank under
the name Of the Pennsylvania Bank of the
United States was chartered by Pennsylvania
as the successor to the United States bank,
with the same capital and mostly the same
managers, which not only loaned its money
in manner which savored of recklessness,
but bought large quantities of cotton on its
hown account. Never were credits SO easily
tobtained nor so unwisely used; never to the
| superficial observer had the country been 50
| prosperous.
In the meantime, however, industry was
declining and all kinds of agricultural pro-
auctions were commanding exorbitant prices.
Wheat went up from 81 to 81 a bushel, and
cotton from to Is cents pound. A specu-
lative fever everywhere prevailed similar in
character, and as much more disastrous in
consequences as it was wider in extent, to the
| South Sea bubble in England Conservative
men, strangely enough, as well as adventur-
ers, were its abettors and its victims.
Banking institutions, and especially the
government repositories, were in a great
measure responsible for it, and not few
were ruined.
call to mind one case which interested me
greatly. In the spring Of 1896 went to a
city in state adjoining Indiana to make
with its leading bank exchanges of New York
and New England bank notes for it's notes,
which were receivable at the government
land Offices. As knew the president person
ally, called upon him at the bank after
banking hours. was kindly received, but /
noticed that he was in bad humor, which he
did not try to conceal, the cause of which he
explained. II have" said he, "for the first
time since became president of the bank
been squarely overrulcd in a matter of great
Importance. do not like" he went on to
say, "the business outlook. The people seem
to me to have gone mad, and if am not
greatly mistaken they will soon find out
that the prosperity of the country is unreal.
We owe the government a large amount
Of money, and as we have enough and some
thing more in the banks of New York to pay
it, at tho meeting OF the board this afternoon
introduced a resolution in favor of paying