Charlevoix county herald., 1907-05-25
TWO PANIC YEARS.
why the Depression Of 1873 Was Less
Injurious Than That of 1898.

III MS review or q new book treat.
ing the events of the contest between
Hayes and Tilden in 1876 Mr.. Edward
Cary says in the New York Times:
The disastrous panic of 1873, due
directly to the imitation of the cur
rency by irredeemable paper, was but
three years In the past, and business
men looked with dread upon the &C.
cession to power of party which in
three successive presidential elections
had made direct appeal to the infla-
tionists
The financial catacalysm of 1873
enjoys the unique distinction of being
the only panic that has ever occurred
in protective tariff period. This fact
is stated with due cognizance of the
kindergarten argument that the panic
OF 1898 began while the Mckinley tar.
in was in operation and therefore
could not have been influenced by the
Wilson-Gorman tariff of 1894. BY
parity of reasoning there should be
no advance in the price of wheat be-
fore the end of October, when thresh-
ing was all over, IL on the first of July
killing frost or blight had destroyed
one-half of the wheat crop of that
year. Quotations in the wheat pit do
not wait for threshing returns in such
circumstances. Neither did the pro-
ducing business of the country wait
for the threshing time of the Wilson.
German law of 1894, but took due &C.
count of the killing frost and blight
which came early in November of
1892, and drew in all lines of indus.
trial adventure more than Is months
before the anticipated blow really fell.
The case was very different in 1873
That panic was directly due to an ex.
cess of paper currency of greatly de.
pleted purchasing power as compared
with coin. It's severity was somewhat
augmented by the unwise and I'M
called-for tariff revision downward of
1872, when by the act of June re.
duction of ten per cent. was made in |
the customs duties on all importations |
OF cotton, wool, iron, steel, paper, rub |
Der, glass and leather besides a num-
Der of specific changes in the tariff |
and large addition to the free list.
But the panic of 1878 was relatively |
shortlived. In 1874 congress passed |
an act revising the tariff upward, and |
in March, 1875, another revision took
place restoring the duties that had |
been cut down two years before and |
also increasing some of the duties be-
yond the rates prior to June 6, 1872.
So prosperity was restored by pro-
lection after the panic of 1873, just as
was restored by protection
after the panic of 1898. In the first
case panic conditions were somewhat
a ggravated by a downward revision
of the tariff. which cost the govern
ment upward of S50000,000 in dimin-
ished revenues, but this blunder was
quickly rectified, and under the influ-
reaction toward prosperity was prompt
and effective.
Not so in 1898. This panic was al
most as exclusively the result of an
-icipated tariff revision downward as
he panic of 1873 was the result of
luHdllOH Ill consequence
he panic of 1898 lasted twice as long
md was perhaps ten times more de-
,tructive in results.
In his reply to Gladstone Mr.. Blaine
said of the panic of 1878:
And strongest of all points. the finan-
al distress was relieved and prosperity
estored under protection, whereas the
unous effects of panics under free trade
ave never been removed except by a re-
ort to protection.
Mr.. Blaine was not permitted to
witness the complete verification of
his statement in the marvellous re-
ults attending the restorative protec-
ion law of 1897. Eighty-fve million
prosperous partners in the firm of
Uncle Sam & Co." can testify to the
bsolute truth of the proposition that,
lthough-as in 1S73-a panic may oc-
ur in protection period from causes
4 no way related to protection, no
anic has ever occurred and none can
yer occur which protection cannot
ure.