The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1895-01-17
PANICS--CAUSE AND CURE.
A Paper Read by Gen. l. r.. Sherwood
Before the Bi-Metallic League on
October 6, 1893, in Assembly Hall,
Cantou q


October 6, 1893, in Assembly Hall,
Canton, o,
Moralists, writing on exclusively lines,
| have said that money is the root of ell evil.
This meant, when uttered, that the posses
| sion of abundant money led to the most fire.
quent ininctions of the moral law.
But since our Republic was b0rn the root OF
| most of the evils, that from time TO time have
| afflicted business and our homes, has been the
| want of money, and not its excess
Tonight for forty minutes, let us review
| few of our periodic money famines in this
country called in usual parlance, panics.
According to our dictionary, panic is asud-
| den fright especially a sudden fright without
real cause; or terror inspired by danger, eth
| er imaginary or real.
We derive the word from Pan, a mythology
cal god of the Greeks, who, according to Herodi-
| tus, the oldest of the Greek historians, as
| sisted the Athenians at Marathon, by striking
| terror into the Persian hosts, when they fled
| from Pan, in panic.
That branch of political science embraced
| within the boundaries of money and finance,
| is not fascinating theme. 1t Is skirted with
| no flowers of imagination 1t leads through no
| fertile fields of fancy; 1t offers no mental recre-
alton to the student in quest of entertainment
| but reminds us constantly Of the force OF the
aphorism:
The gods sell us everything for toll"
| Tonight let us think only of that very painful
| subject of the Pagan god, called panics.
| Albert g. stephens, the editor of Bradstreets
/ says that during our century of history there
have been nine panic periods, in the United
| States. Those classed as panics proper are as
signed to the years, 1918, 1887, 1857, 1854, 1879
| 1884, and 1898.
Briefly told the panic Of 1918, was a
| corollary of the business disturbance of 1914,
| following our wal with Great Britain in 1912,
and was the result of bad banking and unsafe
money.
The disasters of 1921 and 1920 were due
| largely to the same causes, while the panic of
| 1887 was due to largely extended credits, with
i an enormous issue of paper money bottomed
| upon specie, that did not exist, and could not
be had when called for.
The panic of 1878 was not caused by unsound
| money, or lack of confidence of the current
| money in circulation; nor was 1t caused by the
| departure of gold, across the Atlantic, because
| gold was not then in circulation, as money. 1t
was caused solely by the contraction OF the cur
rency, at a time when our
| population was rapidly increasing
| ana when the demands for more money for
| the west and south was far beyond the supply.
| The panic of 1873 will go into history as the
legitimate result of cast iron financial policy
proclaiming that the people of this country
| should have just SO much money, no matter
| what the demands of a business growth or the
| rapid increase of new populations might re-
quire.
When that panic struck the country, in the
| early September of 1873, Gen. Grant was Pres-
dent of the United States. He Immediately
proceeded from Washington to New York City
and met the leading bankers and business
men of New York at the Fifth Avenue Hotel.
\ 1t was universally conceded by allbankers,
| business men and politicians present at that
| important conference, that the panic was sim
| ply y money famine, and that the government
| should Immediately come TO the rescue of the
aaVasr
| volume of currency. The Secretary of the
| Treasury, by direction of the President, and at
| the demand of the bankers of New York, inn
| mediately purchased SlS,000,000 government
bonds, out of his "A million greenback re-
| serve.
| the entire A million reserve, the money panic
| of 1873 would have stopped with New York,
| and then and there would have ended,
| But what followed. After the money strin-
| gency had been relieved in New York, Con-
| gress met in December, and New York City
| banks, having monopolized all the government
Greenback reserve, commenced to withdraw
| and contract their credits in the West and
South. They also curtailed their loans and
| discounts, and commenced to accumulate,
as great money center, the cur
rency thrown out of employment by the stop
page of manufacture At that time the Ma
| tional Banking system was a cast iron policy.
| 1t was limited by law to an aggregate issue of
| S354, ,00O, 900. We were then up TO the limit
| Western communities could start no new
| banks. Hence petitions went up from all over
the West and South for new banks, for more
| currency, and for free banking, under the Ma
| tional banking act.
What next happened? When the West and
| South asked for relief, we were confronted
| with the so.called moral argument, that it
would be bad faith for the Government to
| issue any more irredeemable paper currency
| or authorize the establishment OF any more
| National banks.
Wall street, New York, went down to
Washington with the representatives, of $780,.
| 600, 900 of money, and the great newspapers of
| New York, then, as now, owned by million
/ aires, commenced to pelt with epistles of re-
proach and abuse, men like Senator Morton OF
| Indiana, Thurman of Ohio, Mat Carpenter of
| Wisconsin, Booth of California, Logan of
| Illinois, and all the brainy and stalwart Con-
gressmen and Senators from the West, who
| dared TO stand up for the rights of their sec
| ton, against the venal gang of Wall street.
| Boston also sent a sleek and portly delegation
| to aid the Wall street lobby and all commenced
| to sing in chorus we had money enough, and
that the Greenback was only war debt,a dis
| honored promise and that this country could
not honor God or prosper until the Green.
/ back was redeemed in gold and silver.
1t was uot then known to the country, out
side of the conspirators, who did the job in the
| dark, that silver had been demonetized.
This great money power, backed up by the
| metropolitan newspapers, did its work well.
| 1t was potent in both Houses of Congress and
in the White House.
1t broke down every prominent public man
| who dared to oppose their schemes of greed
| and plunder of the masses of the people. Even
| Harper's Weekly, called journal of civiliza-
ton, went down to Washington, with an in
famous caricature of Senators Morton, Logan
and Cameron, representing them as bullies,
making an assault upon our National honor.
This daily slang-whanging of the New York
press, their abuse and Misrepresentation OF
| every prominent public man who dared to OPP
pose the schemes of Wall street, made deep
impression upon the country. Even the Chi
cago Tribune, then the leading Republican
advocated free banking and more currency
when the panic first struck the country,
made complete flop and Joined in
the abuse of Logan and Morton, who
were making fight for free banking.
What was the result of all this long and de,
moralizing controversy The result was com
promise against the interest of the people, The
Greenbacks were preserved rs part of our cir
cuation Silver was substituted for the $50,.
OOO, 600 fractional currency issued by the gov
ernment during the war. The maximum limit
of 354 millions of National bank notes was re
moved and National banking was made free
and a day was fixed for the so-called resump
ton of specie payments which was the m0st
gigantic robbery ever perpetrated upon the
debtor class of any country, barbarous, Pagan
or Christian. This law compelled every mar
who owed dollar, due after the date fixed fol
specie resumption, to pay dollar and guar
ter. / have not time 10 dwell upon that subject
Il An.. hx,k hatai Ia taH "a