The midland journal. (Rising Sun, Md.) 1885-1947, 1896-12-25
LIVE ISSUES.
FINANCIAL PANICS.
Cause and Remedy Considered by
Jesse Gilmore.
BENEFITS FROM FREE COINAGE.
Prosperity Comes With an Increased
Money Volume; Hard Times With
Scarce Money Supply.
THIRD PANIC.

THIRD PANIC.
Finally the tornado contraction
caused by the enormous funding
into bonds of the interest bearing
legal tenders, the large reduction
in the volume of the greenbacks,
and the vast expectation of gold
and silver, burst forth with all its
fury throughout the country. From
July 1, 1862, to July 1, 1873, $685.
397, 1924 net of gold and silver was
exported (see report Mint Director
1895, pages 294 and 1850. The first
heavy failure was that of Jay Cook,
one of the funding syndicate for
100000, followed shortly by the
suspension to pay depositors by
every national bank, except the
Chemical National Bank, and few
others in other sections. Also by
pretty much all the state and pri-
vate banks. Fortunately for the
banks as we'll as the people, the
banks were on a greenback basis,
in lieu of a specie basis. Therefore
they were enabled with but few ex-
ceptions, to resume payment TO de-
pOsitOrs in about seven weeks.
Also the national bank notes, which
are not a legal tender to pay debts,
were redeemed in greenbacks, in
lieu of coin, which saved our people
from a terrible affection. Had the
banks been on a specie basis as they
were in 1887 and 1857, in lien of a
greenback basis, the panic would
have been frightfully more severe
and the banks could not have re-
covered for mahy years. How
providential for the people that
they were then afforded the use OF
greenbacks issued by our govern
ment. The greenback saved our
nation from destruction by the war
and saved the banks from destruc-
tion from the panic. United States
notes made a full legal tender, and
backed up by the wealth of the
nation are far superior to all bank
notes backed up by specie or other
wise. When the specie is exported
the banks burst and their notes be-
come worthless, and the depositors
and note-holders pocket the enor-
NOUS losses.
Yet in view of all this terrible
experience, nearly every Bankers
Association that has been held OF
late years, have mostly urged that
the United States and treasury
notes be funded into interest bear
ing bonds and the substitution
therefor of bank notes, to be based
on gold coin. Still the bankers
know that our people are in debt to
Europeans about $4,000, OOO, 900,
with an interest charge Of about
$3.50, 100000 annually, which inter
est therefore, when the times were
good, was mostly reinvested in this
country in every species of prop
erty; but since the pressure set in
about 1888, they have been calling
for their interest and will continue
to call for it SO long as investments
prove Improbable. From July 1,
1888, to August 1, 1896, 1892, 1897, ;
800 net of gold has been exported
from our country.
After the failure of Jay Cook in
1873 bankruptcies increased to q
fearful extent. salaries and wages
went down very low, idleness, pow
erty and crime increased rapidly
and real estate decreased heavily il
value. Thus our country was agair
placed in a terribly sad plight
all owing to its most WORTHLESS.
financial system.
This wretched condition of affair.
continued on the down grade from
bad to worse until the fall of 1878
in the same ratio with the rapid
decrease in the volume of money
from the channels of trade, say from
about $50 per capita in 1865 tt
about $l5 in the spring of 1878.
A large decrease of money vol
ume always destroys confidence
brings on heavy increase of bank
ruptcies, wreckage of the banks
idleness, reduction in salaries, anC
wages, and financial panic of sew
eral years duration. AS a proof O
this assertion look back at the sew
eral frightful panics that hav,
occurred in our country during thu
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