The Yale expositor., 1895-11-22

He who does not appreciate the fact
that the industrial and business situa-
tion is unnatural and unsatisfactory,
must be a careless observer indeed.
Everybody knows that in 1893 this
country was struck by financial cy-
clone that had never been equaled in
its history. Money vanished from
sight, and credit utterly collapsed
Factories closed, mines suspended, mil
lions Of honest workmen were turned
idle into the streets. Business was
completely paralyZed. and everything
was at a standstill except the produc-
tion of the bare necessities Of life.
Even these were sold at prices ruinous
to the producer. and the hardest kind
of hard times held the nation and it's
people in grasp of iron. With its Sc
verify only slightly abated, this condi-
tion has lasted until the present time.
What was the cause?
The republican protectionist general
ly claimed that it was the advent of the
democratic party to power upon a free
trade platform. Some of them inti-
mated that the Sherman law" may
have been a very slight factor in de-
stroying public confidence, but all in
sisted that the main cause was the
threat of free trade.
Mr.. Cleveland and the gold wing of
the democratic party took the position
broadly that while high protection was
In degree responsible, the chief cause
was that Infamous measure" known
as the Sherman law"
The United States government was
adding about $4,000,000 a month to the
currency in treasury notes based upon
silver bullion, and this addition to the
money supply was actually ESQ it was
said producing a money famine. These
notes were of full par value. sometimes
even commanding a small premium,
and yet 1t was seriously urged that the
people had no confidence in them,
which lack of confidence had plunged
us into financial commissions.
We were told in the most dogmatic
way that the repeal of that law would
Immediately restore confidence, stop
the exports of gold and send a food
tide of prosperity rolling over the land.
The whole power of the administration
was brought to bear to force the repeal.
The democratic party broke in two un-
der the pressure. The republicans
voted strongly with the gold wing OF
the democracy, and the last vestige of
legislation sustaining and upholding
silver as a money metal was swept from
the statutes of the United States.
Two years have passed since then,
and still the flood-tide of prosperity
lags on its way. 1t is not pretended
by anybody at this time that the repeal
of the Sherman law" restored pros
perity. But it is loudly proclaimed
that good times are now coming by
leaps and bounds. This, however, is
merely prediction, and it may be laid
tenderly away with many others CON-
ing from the same source, for future
consideration.
The question recurs,. then, What was
the cause of the great panic of 1898?
The trouble with the reasoning of the
gold sophists was that they took too
narrow a view of the situation. The
financiers and business men of New
York, oppressed by the difficulties
which surrounded them, looked only at
the immediate present, forgetting that
during the previous four or five years
almost every civilized country on earth
had passed through the same ordeal.
For years the storms of financial dis
aster had been sweeping over Europe,
shaking the Bank of England to it's
foundations, aud carrying desolation
even into far-off Australia. Finally it
burst in all it's fury upon us. The
shock was heavier here than in any
other country, because of the enormous
magnitude of our productive enter
prises and the extent to which they are
conducted upon the basis of credit.
The United States is in fact the great
est of all debtor nations.
Our gold went abroad, not because
we were purchasing silver, but because
other nations, driven to extremity, had
to have the gold.
1t is commonly assumed by the oppo-
nents of silver that everything was all
right in monetary way until about
the beginning of 1893. This shows a
very superficial understanding of the
real situation. The truth is, and 1t Is
recognized by every leading economist
on both sides of the Atlantic and upon
both sides of the silver question, that
the entire period from 1873 down to
1893, with only temporary spurts of ap-
parent prosperity, had been one of ex-
traordinary business depression. In
1886 the Queen of England appointed a
commission to investigate the situa-
tion. and after the most exhaustive re-
search the commission made its report,
in which IL was shown that nearly every
industry in the United Kingdom was
in most grieyously depressed and un-
healthy condition; that vast numbers
of wofkmen were unemployed. and that
the prices of nearly all the staple prod
ucts Of the country had so fallen that
there was almost no profit in business.
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