The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-11-11

III.
It will be remembered that early in 1888
Congress passed the Compromise Tarif
bill. framed and advocated by Henry Clay.
and simultaneously a Force bill, termed by
the nullifers the Bloody bill. the joint effect
OF which measures wa to bring about the
repeal OF the Notification ordinance by a
South Carolina State convention. Very
different views were taken Of the methods
adopted by jackson on the one hand, who
demanded the Force bill, and by Clay on
tho other hand, who urged the adoption
OF a compromise tariff, to avert a disruption
Of the Union or the violent coercion of a
State. On the day Of Jackson's second
inauguration March 4, 1889 the United
States Telegraph appeared in mourning
because the Bloody bill was the law of the
land. saying; "Here lie, the remains Of
State Rights and 1t is for this we mourn"
The Richmond Encairsr. OF the contrary.
declared that notification was triumphant.
What. IL asked, has produced the settle
ment Of the tariff question: Notification.
would We have had Mr.. Clay's bill had it
not been for the action Of South Cardinal
In the opinion OF the New York Evening
Post. the compromise tariff act had dealt
protectionism q stroke from which IL never
would recover. "A system founded on
the most short sighted selishness has re-
oeived its death blow. The experiment
has been fully, almost fatally tried, and it
will he recorded in history only to be
avoided" According to q South Carolina
newspaper that State considered the adj
justment reached to be less than was its due.
Yet it boosted that much had been gained
by a single effort and against fearful odds.
A little State had defed the staggering
giant Of the Union. mot only had 5000
Carolinians awed the Wild West into re-
spect. compelled Pennsylvania stolidity
into something like sense. New York Dor
ulption into something like decency. and
nike rapacity into q sort Of image Of
honesty. but they had done all this loftily
and steadily. and in the face Of 1900 be-
trayers Of the liberty Of their own State
II is certain that the tariff, Of which South
Carolina had complained. was overthrow.
and that the majority In Congress yielded.
The friends Of the American System, as
p~Otecfionism was then called. received
the compromise " something which would
have had to be. conceded soon OF late.
The day when the national debt would be
paid in full was near at hand. and to keep
up after that event a high tariff, which
turned into the treasury s20.oo0.0oO a year.
WAS admitted to be unreasonable and I'm
desirable. As a matter Of fact. the lower
ing Of the tariff had taken place only a
couple OF years before the time when it
must have come. Moreover. the reduction
WAS not TO be an abrupt one. such as South
Carolina demanded. bus was to be spread
oyor n nariod ~ paarlu ,tna uaara ard had
been accompanied by n Force act which
left no doubt as u what the country thought
about notification. So by the Protection
lists Mr.. Clay's part in the matter was
thought to have been most honorable and
the Great Pacifcator.
IL was On September 20, 1883, that the
Globe announced by authority that on or be-
fore October | deposits of the public money
would cease to be made in the Bank Of the
United States. and would be made in the
State banks at New York, Boston. Phila-
delphia and Baltimore. There was then on
deposit with the bank more than 1880 900
Of public money. Every cent OF this might
at any mornsn be withdrawn, and much
Of it was sure to be used in a short time to
meet the current expenses OF the Govern
ment. The bank was therefore forced to
curtail its loans to the extent OF W. mill
ions and was unable to Use the deposits for
the benefit Of the commercial community.
Thus the whole system of credit was sud
denly and Unexpectedly thrown into con-
fusion. State banks that were debtors to
the monster" corporation were likewise
compelled to stop loaning money freely;
and so too were the twenty-three pet
banks selected to receive the Government
deposits; for the share which each Of these
might receive would depend on its financial
condition. As a consequence. money be-
came scarce, rates OF exchange and dis
counts rose rapidly, and business enter
prises of a hundred sorts were checked or
stopped altogether. Exchange. which pro-
viously had cost one-half OF I per cent.
was now effected with difficulty at 2 per
cent. The discount or notes was often
is per cent. Merchants could no longer
buy produce with cash. for they could not
make collections, being unwilling to press
old customers. Under the circumstances,
farmers would not sell, but stored their
produce in hope of better days soon to
come. Bank notes once willingly received
on deposit were now rejected and would
no tOukcE puy NCbbcs ~" bhC iOShibahb
paralysis OF business jackson was, Of course,
held responsible by the great majority OF
men engaged in manufactures n COM
merce, and Henry Clay made himself the
spokesman OF their discomfort in the Sen
ate, where the Wings had a majority. On
May 7 that body adopted n resolution that
the President in the late Executive pro-
oeedings in relation to the public e
had assumed upon himself authority and
power not conferred by the Constitution
and laws, but in ~derogation Of both. Against
this, which was virtually a resolution OF
censure, jackson sent a vehement protest,
but the Senate refused TO enter il upon its
journal. 1t was not until January. 1887. that
Thomas H. Benton succeeded in ~persuading
the Senate, which had become Democratic,
to expunge the resolution.
The panic Of 1884, though harmful enough,
inst gnihc compared with the finan-
cial catastrophe of 1887. The immediate
causes of the CONFUSION in the last named
wear we're two. First, the Specie Circular,
iss,ed bv~ Jackson's order in 1885, requiring