Evening star., 1932-01-17

has been customary in al
periods to cry out that economic dis
ease threatened disaster in the
United States. While in the throeI
of depression and its companion
evil, unemployment, it has otter
been customary to observe only
the things that produce hopeless
ness of spirit, overlooking the undis-
puted fact that throughout f1nancia
history depressions nave melted away
as abruptly and unceremoniously as
they have approached
American economic annals show
many such periods. Each generation
has experienced at least one disturb
nnce. and the comments Of the people
or their leaders have been similar
throughout. Distress has been upper
most, but the certainty Of the inevitable
aftermath of renewed prosperity Is
driven from the mind as the struggle
has followed the usual course. From
the records, however, 1t appears that
American depreSsions were more marked
in the last century, and that somehow
since 1900, this country has SHOWN
greater efficiency in dealing with an
abnormal situation.
More than a century ago, President
James Monroe faced such SITUATION
and in a message to the leglslaIlVe
branch of the Government described
Conditions with the concluding state
nent. In what way the evils adverteo
10 NAV be remedied is submitted to the
wisdom of Congress" In his frank
discussion of facts, President Monroe, on
December 7, 1919, told the statesmen
of his day: THE great reductlon IN
the price of the principal articles OF
domestic growth, which has occurred
during the present year, and the cohse-
ouent fall in the price OF laoor' ap-.
narentlv so favorable to the success OF
domestic manufactures, have not snlelo-
ed them against other causes ADVERSE
to their prosperity. The pecunlary EN-.
barrassmentS have so oeepy at!eC.eu
the commercial interests OF the NaVloIl
have been no less adverse TO our manu-
featuring establishments in several Sec
tons of the Union.
Ranks Withdraw Support.
.1-ne great reduction of the currency
u,bicb the banks have been constrained
to rnake in order to continue specie
nevnents and the vitiated character OF
+ where such reductions have not peen
ottemnted. instead Of placing within
tbe reach of these establishments the
pecuniary aid necessary TO avaA Inenl-
selves of the advantages resulting from
the reduction of the prices OF the raw
materials and of labor, have compelleo
the banks to withdraw from them a
norton of the capital heretofore ao-
yanced to them. That aid which mas
been refused to the banks mas not peeh
obtained from other sources, owing 70
the loss of individual commence: from
the failures which have recently oc-
l. 10 riIr T1rinHinal conn
mercial cities. An additional cause OF
the depression of these establishments
NAV probably be found in the pecuni-
ary embarraSsmentS which have re-
Gently affected those countries with
which our commerce has been prlncl-
pally prosecuted"
The President concluded his COM
ment with the appeal TO Congress
and a statement Of what would now
be described as dumping" by foreign
countries also affected by the general
conditions.
Another outstanding period of de-
spondency was that of 1857, In the
course of which Harper's Weekly pub
nshed the comment:
1T is a gloomy moment IN history
Not for MANY years has there
been so much grave and deep appre.,
hension: never has the future seemed
so incalculable as at this time, In our
own country there is universal COM
mercial prostration and panic, ano
thousands of our poorest fellow cltl-
zens are turned out against the ap-
proach Of Winter without employment
and without the prospect OF It, In
France the political caldron seethes and
bubbles with uncertainty; Russia hangs
as usual, like a cloud upon the
,,,If oil 6o m ne
and resources of the British empire are
sorely tried and are yet to be tried
more sorely in coping with the
Indian insurrection and with the
disturbed relations in China"
The New York Herald, on the same
day, october 10, 1857. pictured the con-
ditions that afflicted the country, in tht
words: "As day after day passes in th'
terrible financial agony, we can see tht
country thrill from end to end. Banl
failures succeed each other slowly bu
regularly in the North and East II
the West there has been SO little money
and so much business has been dom
on credit that the revulsion is likely L
be more severely felt there than any
where else The city banks OF New
York and Boston still hold out and tht
managers say-whatever they think
that they will weather the crisis. w,
hope some of them may. AS to thu
marchantS, after the failures of thi
week. no catastrophe could be regarded
as surprising. Failure has now becom
the rule and solvency the exception"
Depression Causes Traced.
The North American Review, in tn
course of comment on the same depres
sion in the issue of January, 1858, CAV
- x1Fitn h.
statement: The Summer OF 1876
found the whole mercantile community
though apparently prosperous, with al
amount of Indebtedness, mutual, t
banks and to capitalists, exceeding to
degree before unprecedented, the aggre
gate convertible value OF the propert
In hand. Much of this property, toe
had begun to decline in its repute
value Real estate in the new cities 0
the West had fallen in the market. Al
most every description Of railroad prop
ertv had become deprecated; in numer
Gus instances the original stock Of rail
ways had grown worthless; thlrd an
second mortgages could hardly haV
been exchanged for an equlValen
amount of blank paper; and even mrs
mortgages were below par. Manulac
tured goods had been produced and i'm
the highest possible demand of the sea
son. and thus to threaten general re
duction of prices. There were thus ac
cunulated all the materials for a uni
versal panic. At this juncture occurre
the failure of the Ohio Life and TruS
Co an institution which had stood hig
in the public confidence, and had ex
tensive connections in all our grea
cities. Its suspension at any othe
period might have affected only thos
who held its obligations, or were lntef
ested in it as depositors or stockholder
But the credits Of the country were a
inverted pyramid, and needed but
touch for them to topple and fal
Creditors became alarmed and sa
ample reason for alarm. Loans WEI
called in on maturity; extensions an
new loans were refused. Prices Sti
falling, and threatening still further dt
cline, the assets of the indebted clai
were dwindling in the prospect an