The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1890-03-08


importer Of breadstuffs.
The balance OF trade had been for long time
favorable 10 Europe and against the United States
and also In favor Of the commercial cities OF the
sraboard and against the interior, but vicious
system Of credits prevented the prompt settle
meut Of balances The importers established large
credits abroad, by means OF which they were ena-
bed TO give favorable terms to the jobbers. The
jobbers in turn were thus, and By liberal accom-
Inodations from the banks able 81 give their own
time to country merchants, who in turn sold to
their customers indefinite credit II then
| seemed 10 be more reputable To borrow money
than 10 earn II, and plcasanter and apparently
more profitable To speculate than 10 work, And
| so the people ran headong into debt, labor de-
creased production fell OF and ruin followed.
This was, Of course, u panic sharp and ter
! rife, but IL was Of short duration. IL was
soon followed by lethargy under which all
the springs Of enterprise and hopefulness
were dried up To prevent the sacrifice OF
property under judicial DEGREES, stay laws
and appraisement laws were enacted by many
! OF the states, which only aggravated the
trouble. For long weary years the lethargy
continued There was no demand for any
! thing except the necessaries Of life, and all
/ these, except clothing, were sold for scarcely
enough, and in some cases not enough, 10 pay
the expenses of taking them to market. |
witnessed IA sale in 1889 TO the keeper of a
hotel in Indianapolis of oats 1T 10 cents a
| bushel and fine chickens at 80 cents a dozen.
The same year saw thousands of barrels of
-four under the sheds of Suydam, Sage g.
Co. in New York which they were Offering
! at s. - barrel. Fat cattle were selling at
SO low price-$l0 and Sl2 head-tbat my
brother thought that he would pack few
barrels Of beef at Fort Wayne for the New
York market He did so, and was drawn
upon by his consignees for part OF the ex
penses of transportation not covered by the
sales. From 1887 to 1871 there was nothing
to break the stagnation but the political
campaign of 1910, ip which everybody be-
came enlisted for want of something else to
do. In the fall of 1871 reaction began to
appear. This became decided in lSi2, before
the tariff of that year went into operation,
and in lS45 the country, chastened by adver
sity, was in the full tide of healthy and
wealth producing industry and enterprise.
This continued until credits became again
unwisey expanded and speculation became
rife.
THE PANIC OF 1857.
In 1857 / was the president Of the bank in
the state of Indiana, end this is a part of
what ] said about the financial troubles Of
that year in the report from which l have
quoted:
Inc hhanclai CRISIS OF lNo' was 'he result Oh
snii.,r cai,e ~ 'ii''' y, io' cue p,.
ia ,his oaso tho aviI baJ No, h,er lone NJ worl
and productive Industry had not been seriously
diminished the reaction, though sharp and de-
structive, not general nor were the embar-
easements resulting from it protracted Now, in
both instances the expansion occurred WINE tne
pusiiess vi 'ne oounti, was "pou spec oa'
~. u. 10 in,ar,,a,nd rnd.r ubob pavnonts
were deferred and specie as A measure of value
and n regulator of trade was practically ignored
Everything moved smoothly and apparently pros
perously as long credits could be established
and continued, but as soon as payments were de-
hlahueu anu specie y" ~ III requis'ioh uistius Gun
.,'ehoe'' a'la .,i - .am5
tha ht II vii, h recoIlacted tha, xhe
tho uarc. we're risinq, sne,e ceaseJ, 10 he a repu
lator by reason of credit system which prevented
the use of it.
Now, with all due respect to Mr.. Blaine,
express the opinion that the apparent pros
perity which preceded the revulson of 1887
and the real prosperity which preceded the
crisis of 1857 were not caused by the tariff,
and that the reverses which followed were
not attributable to It's reduction. If the tariff
was in any measure instrumental in produc-
ing the changes it was in stimulating the ex-
pansion which terminated i'm disaster In 1857
| was believer in the tariff, and it never en-
tered nv head to attribute the financial
trouble Of that year to the changes to which
it had been subjected.
THE FINANCIAL TROUBLES OF 1873.
The most pressing duty which had to per-
form when became secretary of the treasury
in 1865 was to provide the means to pay the
soldiers and to meet other pressing demands
upon the treasury This was done in the only
way it could be done-by the sale OF tempo
rury obligations which had proved to he at
tractive TO investors After this had been
accomplished the work of funding these obi
cations was commenced and carried success
fully on until the whole amount--some thir
teen hundred millions of dollars--were con-
verted into bonds. While this work was
going on was under constant apprehension
of financial crisis before it could be COM
pleted. Ny apprehension was unfounded,
but only as TO time The crisis was postponed,
and for so long a period that the opinion
generally prevailed that the vitality and pro-
ductive power of the country were so great
| 4, ,,,.,- that hol ayar