Year: 1878

Again the prophecy is made that the spring


will find us fully recovered from the effects of
the financial panic of 1878, and once more in
the way OF business prosperity. But we may
be excused from putting implicit faith in
prophecy which we have heard for years and
which accommodates itself to failures with all
the elasticity of a Millerite prediction. The
hope of speedy recovery which has been cher
ished ever since 1874 arises from misconcep-
tion. We have confounded the disaster of 1873
with the industrial depressions that, our his
tory has taught us, occur about once in every
decade. A season of prosperity leads to
great expansion Of credits, recklessness in
speculation, an extravagant way of living,
rapid increase in prices and the investment of
much capital in undertakings that will make
no return for years. Then the crash comes
and there are many failures. But the recov-
cry Is rapid, settlements are speedily effected,
and good times soon .return.


The disaster Of 1873 was however, quite
another affair." The causes which led to it
were more serious in their nature and the
consequences which came from it more last
ing than any before in our experience. For
years we had been wasting our substance and
reducing ourselves to poverty. Our expen.
diture of wealth from 1861 to 1855 was enor-
nous, and is but family indicated by the mag
nitude of the national debt. In the Northern
section of the country alone halfmillion of
men were withdrawn from production and
setsto the work of destroying wealth. Our
industries were devoted to productions which
were at once annihilated by war, which re-
turned nothing in the shape of new material.
Grain was harvested and goods were made
not to feed and clothe men while they were
producing wealth but while they were giving
all their energies to its destruction. The
whole surplus of the country was put into en-
gines of war which were destroyed on the
battlefield, and the surplus used up we drew
enormously on our credit. We were steadily
flated currency and the high wages which
labor commanded deceived us as to our con-
dtion and led to the belief in a prosperity
which did not exist. We went on making
use of our credit still further. A mania for
railroad building set in. Rich in the evidences
ofnational debt which we thought evidences
of wealth we sunk capital and burdened our
selves for years to come with debt in the con-
struction of railroads that were not needed
and cannot return interest on the investments
in them. In 1873 the crash came. The
failure of one great banking house brought on
general collapse.


1t is not to be wondered at that the recov-
cry from so great an i'll is slow. The panic of
1873 left US terribly poor. In the years that
followed we have been getting cut of debt
and trying to earn enough to make new
start. Our expenses, national, municipal,
and personal, have been reduced. We are
economizing in every direction. Business is
conducted with far greater prudence. By
these means we have effected much. The
great crops Of the last two years and the for
eign market opened to many of our manu-
factures are of great aid to us. The shrink
age of values has about reached its limit. In
all but name we are on specie basis once
more. Unless the finances are again unset
tied by further initiation or by the substitu-
ton of a deprecated and fuctuating cur
rency for the money Of the world we shall
not be disturbed in our progress toward good
times. But that progress will necessarily be
slow, and it will be unwise to look for a sud-
den revival of business in the spring, Doubt.
less we shall be better off then than now,
and our prosperity will increase with the
months; but we cannot expect to so soon
work out all the bad consequences of infa-
tion.