The citizen. [volume] (Berea, Ky.) 1899-1958, 1907-05-30
TWO PANIC YEARS.
Why the Depression Of 1873 Was lest
Injurious Than That Of 1898.

In his review of a new book trean
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 10
three successive presidential elections
had made direct appeal to the inna
uonists.
The financial catacalysm OF 1872
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 German 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. n on the FIRST OF july
a 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 throshing time Of the Wilson.
German Law Of 1894 hut took due ac
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 rs montha
before the anticipated blow really fell
The case was very different In 1874
THAT panic was directly due to an ex'
cess OF paper currency OF greatly de
pletad purchasing power as compared
with coin. lite severity was somewhat
augmented by the unwise and un.
called.for tarir revision downward %
1879. when by the act OF June a re-
ductiOn OF ten per cent. was made In
the customs duties on all importaticss
OF cotton. wool. iron. steel. paper. rub
Der. glass and leather. besides mum.
Der OF specific changes In the tariff
and large addition to the free list
But the panic OF 1873 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 tao years before and
also increasing sorue Of the duties be
yond the rates prior 10 June s. 1872
So prosperity was restored by pro
lection after the panic OF 1879. just as
prosperity was restored by protection
after the panic Of 1898 IN the first
case panic conditions were somewhat
aggravated By a downward revision
OF the tariff. which cost the govern
mcnt upward Of $50. 900 geo IN dimin-
ished revenues. but this biunder was
quickly rectiiied. and under the innn.
ence OF fully restored protection the
reaction toward prosperity was prompt
and effective.
Not 80 IN 1893 This panic was al
most as exclusively the result OF an
ticipated tariff revision downward as
the panic Of 1873 was the result Of
currency imitation. 10 consequence
the panic OF 1895 lasted twice as Ions
and was perhaps ten times more de
structive In results.
In his reply TO Gladstone Mr. Blaine
said OF the panic Of 1873.
And strongest Of an points. tho nnan-
ciai distress was relieved and prosperity
restored under protection. whereas the
ruinous effects Of panics under free trade
have never been removed except by a re-
sort 10 protection.
Mr.. Blaine was not permitted Ia
witness the complete verincatlon OF
this statement IN the marvellous re-
suits attending the restorative protec.
ton law OF 1897. Eighty-hvc million
prosperous partners In the firm OF
Uncle Sam & Co" can testify 20 the
absolute truth Of the proposition that.
although--as in iS7S--a panic may oc-
cur in a protection period from causes
in no way related 10 protection, no
panic has ever occurred and none can
ever occur which protection cannot
cure.