The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1893-05-25
IN PAST YEARS.
The Country Has Had Four Great
arrangements Of Trade
and Commerce
They Have Been About Twenty
Years Apart, and Another
Is Now Due.
Characteristic Of Monetary Disturbances
Of 1919. 1897. 1867. 1873. and
What Caused Them.

Of 1919. 1897. 1857. 1873. and
What Caused Them.
Not since tho great Barring failure In 1916
has there bssn such d connection In Wall
street a. was induced by the uncertain,
panioky condition Of the market a week
ago. Loss on stocks sold in two days
days meant . disappearance Of $1S,OOO.OOC
or $40. 0OO. 900. On the third day there
came a change aud SPECTATORS who bought
stock At low . prices made money In the
rally a. fast. ~ others had lost II Id the
slump" A panic had been postponed.
Commercial disturbances arise usually
from the necessity Of rsadjustinR the con
ditious of trade to tho common Value OF
money. If prices are higher than tho cost
of producing gold or silver. whoever has
promised to pay money at such a time can
not have actually received m equiv
alant in return, inc tho loRiosl
result il loss and failure. II there was
no system of credit, there would be no pam
les. Inability to meet obligations." says
Horace White, "constitutss bankruptcy;
and q great multiplicity Of bankruptcies
occurring simultaneously constitutes a
commercial ~crisis.' II all persons were in
the habit Of paying cash for everything re-
ceiyed there would be no debts. oonse-
uuently no failures. NO money panios. no
crises.
In the United States there have besn
several of these disorders. Warnings have
always preceded than. such as advance of
prices and Of wages. md an Increase OF
new enterprises In the way Of railroads.
banks, shipping. mines, etc. People sorsm-
bic to buy. then scramble to soil al \ profit,
In times of that sort. They are prosperous
times. and il has been observed that they
endure for . decade or 10. and then. 90 the
brok ers say, the bottom falls out Of every
thing. In England. to illustrate. there
have been crises in 1916. 1926. 1887. 1S47.
1857. 1866 and 1873. An our Owl country
the intervals have been louge-. the imnor-
1857 and 1873. Thus. according to history,
it ia about time for tho rctutn OF an aoita-
tion. twenty years having gone past since
the last. f Ii.
That Of 1919 is, for the influences which
caused IL. of some historic interest. as we'll
as of value in determining the forces which
bring about such conditions. The Napo-
leonic wars had ended. Long psnt up. the
Rood OF English merchandise was let forth
upon the void. In this. 40 in other conn
tries, imports were carried beyond the ca
paoity for consumption. and prices fell
much below the normal rates. The strain
of this over-supply and fall Of prices bore
hard on the domestic manufacturers, and
many OF them were compelled to cease pro-
duction and to abandon their works. Tho
currenov bubble was pricked in the latter
part of 1918. Then there had been a great
collapse in the prices of land and Of aRri-
cultural products. which had been msoh
inflated during the years from 1915 to 1918.
At the same time the foreign market for
grain and provisions, which had been
highly profitable du!ing the time of the
Napoleonio wars, and which there had been
. spasmodic attempt to regain for two or
three years after the close Of our war In
1915. was almost entirely lost.
Harvssts were good in Europe. and the
demand for cotton and for other aarioul-
tural% products fell of. A new scale Of
monetary exchange gradually went into
operation. During the transition there
was, as there always is in such periods,
much suffering and uneasiness. but Rradu-
ally the difficulties of adjusting old contracts
habits of the people accommodated them
selves to the new regime so quickly that
three years after 1919 all effects OF the
stringent times had vanished.
IL wo believe tho assertions Of the pro-
tectionists. it WAS the compromise tariff
1887 and 1889; that the high tariff of 1912
brought back prosperity; that depression
again followed the passage of the aot of
1916. and that the panic of 1857 was pre-
oipitated by the tariff act of 1887. On the
other hand. free traders not ~infrsqueutly
describe the period between 1886 and 1860 as
one of exceptional prosperity, due to the io1
duties then in force. Ii is left TO each TO draw
his inference according to the knowledge
he has OF history and economy. Still, il
may be remarked here that the fixing Of
Che res onsibility on the compromise tariff
10 q better partisan than economic state
ment. 1t had ito origin in the writings of
Henry @. Carey. ''who had been guilty of
many curious versions of economic his
tory" declares Mr.. T'aussig, 'but none
moro remarkable than this" II may be
found in various passages in his works; and
from them it has been transferred to the
writings of his disoiples and to the arcu-
msnts of protectionist authors and speak
ers In general. Yet no fair-minded person.
having even a superficial knowledge of the
economic history of these years, cap enter
tain such nosions. Tho crises of 1&37 and
1889 were obviously due to quite a different
set of causes--to the bank troubles, the
financial mistakes of Jackson's sdministra-
tion. the imitation Of the currency, and to
those general conditions of speculation and
unduly expanded credit which give rise to
crises.
Calhoun oddly ascribed the crisis Of 1887
TO the exceeding hiohness of the duties
under the act of 1888. The high duties
brought In q large revenue and caused a
surplus In the treasury; he said the der osit
q distribution of this brought initiation
and speculation and eventually a crisis.
I'm order to show the true state of
things. said a Wal street article in the
Providenos Journal of May II. 1887. '.wc
state q fact. Among ths SUSPENSIONS Sat-
urday was one for $15. DOC, to pay which
they offered the best securities for SbO, 600.
but could not obtain il. Aud 80 with MANY
Others. Oh! the blessings of such an ad-
ministratiopv' Specie payments were aus
pended in New York on this date. When
she news reached Providence. three DAYS
later, the banks in this city resolved to aus.
pend payment in specie. The amount of
their bills in circulation was small. md
they were able to redeem them, 80 no de.
probation followed.
There were. after that. twenty vear,' "a
lease from embarrassments in finance
Whom the hard times of 1857 arrived II was
seen 10 be plainly seferable to the great
activity. speculation. evet-bankinQ; and
She natural consequences were panic and
depression. In this case a tariff was passed
with some hope that 1t might serve to avert
tho crisis. Money was accommodating in
the treasury, and it was hoped that by 10
ducing the duties tho revenue would bs
diminished. money would be got out of Tho
treasury, and She stringency, which was
already threatening, prevented, TIL "a
hrNtinn faIIaH In npAvA~N Aka -n-f