The watchman and southron. (Sumter, S.C.) 1881-1930, September 20, 1893, Image 3
Cbc eteiwaHMQ j?tuilnm
- - ? o
WEDNSSDAY . S3SPT. 2Q, 189a.
The Great Panics.
Causes of the Country's Principal
Financial Convulsions.
Mr.j financial crises have occurred
in the United States during the
century and a few years over its
existence. Four of them-those of
1819, 1837, 1851 and 1873-will be
mentioned in detail here, and their
causes as well as their consequences
set forth. These were the most
extensive and disastrous industrial
commercial convulsion which the
country has known, the ill-effects in
each case being felt for several years.
The gold bubble of "Black Friday,"
in 1869, will also be touched upon,
and the reason tor it and the effects
which sprung from it noted.
In the popular mind the eight years ;
(1817-25) of Monroe in the presidency
are memorable merely for the "era of j
good feeling/' the passage of the
Missouri compromise and the pro?
mulgation' of the so-called Monroe
doctrine. It was notable also for
another event, the occurrence of the
most extensive and serious business
disturbance which the county had
known along to that time. As the
Missonri compromise of 1820 was the
first of the series of great slavery
dickers and deals which ended with
the concessions of 1850, so the panic
of 1819 may be considered the first
of the series of extended financial
* convulsions, the latest of which
began in 1873. Wild and extended
speculation was one of the immediate
causes of the business disaster which
set in in 1819, and another was the
heavy merchandise importations from
Europe, and especially from lingi and,
which the close of the war of 1812-15
precipitated on the country. The
speculation started with the re- j
organization of the United States j
Bank in 1817, which materially
improved the facilities for business
' credits. Mismanagement on the part
of some of thc high officials of thia
second United States Bank, and the
favors winch it granted to unscrupu?
lous borrowers, gave an impetus to
speculation such as had never been
known before, brought the bank into
trouble early in its career, and
obliged it to curtail its credits and
call in many of its loans. The
speculators who had been "working"
the institution in their own interests
were thus brought up with a "short
tum/' and a general collapse in the
fictitious values which their wild
operations had caused was precipitat?
ed. The bank in this way saved
itself, and ultimately put the business
of the country on a solid basis, again,
but for two or three years the trade
prostration was serious and wide?
spread and great distress was oc?
casioned.
Thc tariff's connection with the
panic of 1819 came around in this
way : About the time of the out?
break of the war with England in
1812, congress, as a war measure,
doubled the rates of ali existing duties.
This law remained in operation four
years. Imports practically ceased
under this law and the risks which the
war caused to commerce, and the
capital of' the country turned at once
to manufacturing, as its best avenue
for profit. The shipping interest was
crippled by the war and the legisla?
tion hampering foreign commerce, and
a large part of the money invested in
this interest was diverted to other
channels, but chiefly to manufactur?
ing. The close of the war, and the
expiration a little later of the war
tariff, found the country with a larger
number of factories than it could have
gained in three or four times that
period in any other condition, and the
factories were able to go a long way
toward fully supplying the country
with commodities in their line. When
the restraints against foreign com?
merce were removed the country was
flooded with cheaper, and, doubtless,
better goods, from England, and thc
domestic manufacturer found a com
pedon he could not cope with on ex?
ist ing terms. Factories began to close
at once, and eventually this produced
the condition of uncertainty and de?
pression which the collapse of specu?
lation before mentioned iniensified
into panic and transformed into pro?
longed financial and industrial pros?
tration.
Business men of all kinds adjusted
themselves to the new conditions,
however, as well as they could, and
the wise action of the Unsted States
bank, already altuded to, at length re?
stored confidence, while the tariff of
1842 afforded the manufacturers rea?
sonable protection in ?he directions in
which they needed it.
"I leave this great country pros?
perous and happy, ' said Jackson in a
farawell address about the time he left
the presidency in the early part of
1837. Appearances were delusive,
however. Scarcely had Jackson's
successor, Van Buren, entered the
White House, when one of the most
wide spread and disastrous financial
convulsions which the United States
has ever known set in.
The panic of 1837 was more exten?
sive and serious than that of 1819. The
country was considerably more popu?
lous, and its business interests were far
more diverse and important About
9,000,000 inhabitants were in the
country when the crash of 1819 set
in, and 16,000,000 were here when
the convulsion of 1837 took place.
Thc difference in the volume of busi?
ness between the two dates cannot be
so readily figured out, bnt it was
enormous.
About the time that Van Buren en?
tered upon his duties, a large business
house in New Orleans failed. This
was the beginning ot the panic of
1837. The financial storm which had
been gathering during the whole of
the Jackson administration now burst
forth with terrible fury. Loans were
called in by the banks, bank circula?
tion was contracted, and business men
of the highest standing in the com?
munity, being denied accommodation
by the financial institutions, were un?
able to meet their debts. Banks too,
went down in the tempest. Business
houses which had successfully
weathered many financial gales were
wrecked. All sorts of property im?
mediately and immensely declined in
values. Suddenly everybody seemed
to be insolvent Confidence vanished.
Nobody would trust auybody. Un?
reasoning terror seized almost the en
tire community. Business came to a
standstill.
^In New York city alone in March
and April, 1837, tbe failures reached
the enormous sum of $100,000,000 In
New Orleans in the same time they
aggregated $50,000,000. Other busi?
ness centers suffered severely also.
AH the banks in New York suspended
specie payments, and the legislature
of that state authorized the suspension
to continue for one year. Banks in
other cities followed the example of
those in New York, and specie vir?
tually disappeared from circulation.
Even the United States government
had the greatest difficulty to obtain
gold and silver, and it was compelled
to pay the army and navy in paper
money, which though worth its face
at the time of payment, might be im?
mensely reduced in value tomorrow.
Factories and business enterprises of
most sorts stopped altogether or were
run on quarter or halt time, and great
numbers ot employees were thrown
out of work.
A deputation of merchants and
bankers from New York called ou
President Van Buren in May, 1837,
two months after he gained office, and
appealed to him to summon an extra
session of congress to provide means
of relief from the prevailing distress
Congress was called to assemble on
September 8, but beyond the passage
of a bill authorizing the issue of $10,
000,000 in treasury notes it did very
little of what the people demanded
or what Yan Buren desired. In the
regular session, however, congres?
passed an independent treasury bill,
which Yan Buren recommended, pro?
viding a special recepatcle for the
money of the government, which had
previously been deposited in a few
banks called, by ti ie government's
foes, "pet banks.1' Out of this law
developed the treasury and sub
treasuries, the latter of which are
situated hi the chief cities. -In
Tyler's presidency the independent
treasury scheme was repealed, but
under Polk it was re-enacted.
"Without a dollar of national
debt," said ex-President John Quincy
Adams, then in the early part of his
long- and illustrious service in the
house of reprentatives, "we are in
the midst of national bankruptcy/'
This was the.actual situation in 1837.
All the government's obligations had
been met, and a large surplus had
been accumlated. Part of this had
been distributed among the Stetes in
proportion to their number of rep
resentatives in the house. This was
deemed be the best way of getting
rid of the surplus, which nobody sup
posed at the time that the government
would ever need a*rain.
These are the chief causes iOf the
panic of 1837 : 1. Congress,Ufering
Jackson's administratien, refused to
renew the charter of the ffitited
States bank, aud this called int^xis
tence a large number of wild cat
banks and put hundreds bf millions
of dollars in face value of irredeeof
able currency in.circulation. This
"cheap" money encouraged specula?
tion, which took the form of iavest
tnent in wild lands, and which was
carried on to an extraordinary, and
insane extent. 3. . The government
called iu the gold and silver which it
had desposited in certain State^jtonks
(the "pet" banks), "which crippled
these institutions 4. The gagern
ment also lefused to sell any"more
public lands except for 8pecie^,.The
order to this effect was sent by the
so called specie circular to the va?
rious government laud agents. These,
circumstances created the crisis.
The bank notes went into disuse
.-^ WW" ?
at once when the government^ re
fused to take them ; businessmen
could neither collect debts nor* pay
them; speculation stopped, aad the
smash came.
In 1857 the third of the"""great
financial crises occurred. This was
a stormy period. The passage of
the Kansas Nebraska bills three years
earlier had repealed the Missouri
compromise and throwu the territories
open to slavery; the sections were
beginning to prepare themselves for
the desperate political struggle which
was to occur at the polls three years
later, and the^ehadow of the greater
and fiercer stiuggle lying beyond was
already looming up. But the finan?
cial situation drew men's thoughts
away from coming political com?
bats and cencentrated them nu the
immediate danger.
The panic of 1857 was ushered in
by the failure of tho Ohio Life and
Trusty company, of Cincinnati, which
occurred on August 24 of that year.
This was in the first year of the
Buchanan administration, as the be?
ginning of the panic of 1837 had
been in the first year ot the adminis?
tration of Van Buren. The liabilities
of the Ohio Life and Trust company
were over $7,V00,000. It was au
institution whose credit and prestige
stood especially high When it tell
it brought ha ilks and business houses
in different parts of the country
down with it. Several banks in Phila?
delphia succuntbed 6oon tc the storm,
runs were made on banks in the
principal cities in the various States,
and suspensions of specie payment?
became general, though not quitt
universal. Factories and oilier large
business enterprises stopped work,
and immense number? of people were
thrown out of employment. A wide?
spread prostration in business set in
For a year or thereabouts the scenes
of 1837 were repeated The rally
occurred quicker however, than it
did from the panic of 1837, for most
of the strong banks resumed specie
payments within six months after tue
crash set in, but it was 1$G0 before
I ali the traces of the financial wreck
? were removed.
The principal causes of the iinan
cial convulsion of 1857 were: 1.
Wild speculation in lands. 2. Ex?
cessive building of railroads. 3.
Overproduction in most lines of manu?
factured goods. 4. Inflated prices
on the general ai tides of necessity
and on many articles of luxury These
were the immediate causes. Thc
ultimate cause was the discovery of
gold in California.
The finding of the California gold
fields was one of the great events of
the first half of the Nineteenth cen?
tury. It stimulated trade not only in
the United States, but in every civil
ized lam?, and exerted an intiueuce
on the commerce, industry and sociai
life of the world, which is felt to thia
day. Its first effect, however, iu this
country was far from beneficent. It
started an insane speculation, and
led to the general trade excesses
pointed out in the preceding para?
graph, which, in the reaction that
was inevitable, resulted in disaster
in 1857 and 1858. Everybody sup
I posed he was going to get rich in a
hurry, and consequently he put
highly exaggerated prices on every?
thing he had to sell, and thc same
hopeful feeling led him to pay with?
out a murmur excessive prices for the
things he had to buy. Lands were
bought with the expectation of being
sold next day at a large increase.
Railroads were constructed on the
assumption that the tremendous ex?
pansion in . population and wealth
hoped for would enable them to pay
immense dividends at once, while in
reality many of these roads were
beyond the .needs of the county for
the next dozen years. The same
buoyant spirit led to the overpro?
duction in all kinds of goods. Every?
body was going to be wealthy any?
how, and therefore everything which
was made would -find ready pur?
chasers at high prices. The awak?
ening from this dream was rude, but
it was salutary, and business as well
as men's plans and expectations
eventually adjusted themselves to the
norma) conditions.
"Black Friday," which came in
1869, is the next on thc list of
monetary disturbances. This affair,
however, was a mere flurry, and,
though immense sums of money
were made and lost by it, and Wall
street was demoralized for several
days, yet its effects on general busi?
ness were only transient compared
with those of 1857 and 1873.
"Jim Fisk," who Was killed two
or three years later by Edward S
Stokes, and Jay Gould were the big
figures which organized the "Black
Friday" deal. Their object was to
corner the gold market and force
-gold up to 180. Gold was then a
commodity, and was bought and sold 1
like ordinary merchandise or like j
stocks It was at a premium in our
currency, and remained, so until
January I, 1879, when.specie pay?
ments were resumed by the govern?
ment. The conspirators controlled,
or imagined they controlled, nearly
all the gold held in private hands,
and got it at about 131. By mani?
pulation they at length sent it np to
150. This was the price at which it
stood on the morning of Friday,
September 24, 1869-"Black Fri
I day,"
Everybody felt that the corner conld
not be broken unless the government
i sold gold, while the clique .boasted
: that the government was on its side.
I The prices which started at 150 on
this memorable Friday, were slowly
but steadily forced up to 162, while
bulletins posted in every city in the
country showed the advances. Such
excitement was never seen in the
country at any other time as was
shown on that day.
But the culminating point was
reached when J.he quotation touched
162. UnKnown, to the conspirators,
the treasury had come to the rescue
At the 162 bid, $1,000,000 was soid
to the clique, and the prices went
down to 161, at that rate and
at 160, other sums were sold
and all by the same individual.
Consternation seized the clique, and
they, as well as the onlookers began
to realize that this individual, who
stood calm in the midst of this con?
vulsion, must have measureless
resources at his back. Suddenly his
identity was divined. Like light?
ning word went through the ex?
change, "The treasury is selling !"
Scores of operators rushed to sell,
and in a few minutes the quotation
had dropped to 135. The gold bub?
ble had burst, and "Black Friday"
passed into history.
Next on the list of the country's
financial convulsions, and the latest
of all of them thus fat, was that of
1873. Early in that year a general
feeling of insecurity began to be felt
in business circles. Banks curtailed
their loans and exercised greater
discrimination in bestowing their
favors Shrewd business men, too,
shortened their periods of credit.
The knowing ones on all sides be?
gan to prepare for the financial tor?
nado which they felt to be impend?
ing. And yet when the storm did
come, it may be said to have taken
the country by surprise.
In September the crash came. On
the 8th day of that month the New
York Security and Warehouse com?
pany Rank under its load of Missouri,
Kansas ard Texas; on the 13th,
Daniel Drews's firm went down with
Canada Southern, and on the 17th,
the fateful 17th of September, the
great banking house of Jay Cooke &
Co. was buried under the weight of
Northern Pacific, and the panic of
1873 was "on." Then banking and
business concerns on all sides
collapsed, and the New York Stock
Exchange put up its shutters for the
time being.
In the remainder ol 1873 the scenes
of calamity witnessed in 1837 and
1857 were repeated Banks suspend?
ed payments temporarily throughout
! the greater part of the country, and
many of them were wrecked perma?
nently. Factories suspended or re?
duced the hours of labor large num
bets of employes were thrown out of
work, and the distress was wide?
spread and serious. The effects of
the panic lasted until about the
middle of 1877. or about a year and
a half before the resumption by the
government of the specie payments,
which had been suspended in the
early part of the civil war. *
The principal causes for the panic
of 1873 may be broadly summarized
thus: I. The inflated and fluctuaiing
currency. 2. Large exports of gold.
3 Excessive railway building 4\
Heavy spoctilation in real estate and
other directions.
In 187.'?, and along to the beginning
of1879, g?>ld was merchandise, and
was bought and sold like other
merchandise or property dealt in on
the commercial exchanges, and was
subject to rapid fluctuations in value.
For many years too, the exports of
gold largely exceeded the imports., in
response to an adverse balance of
trade and others causes. Railway
building in tin? West during that era
had gone beyond the demands of busi?
ness for haifa dozen or half a score of
yeats to come. Over $1,000,0(10,000
was sunk in 1871, 1872 and the first
hall of 1873 in railway building
which, for the time being, was almost
a dead loss, this immense sum of
money being withdrawn for years
from the channels of commerce, to
the great injury of all branches of
business. The chief railroad pro
jected at the time was the Northern
Pacific, which wrecked Jay Cooke.
The speculation in houses and lands
was not as extensive as was the rail?
way building, but it helped to expend
the bubble of fictitious values whose
callapse spread demoralization and
min on sides.
Several financial flurries have
occurred since 1873-those of 1881,
1884, 1889 1890 and 1893 being the
severest.-St. Louis Globe Demo
erat. _
John Dennis and General
Floyd.
Early in the late oivil war John Den
DIS, a full blooded negro, believiag him?
self fired with patriotic zeal and able to
serve his country, besought his master,
a Georgian, and got permission to ac?
company a regiment from that State
which was soon placed under the com?
mand of General Floyd. The history of
that campaign is well known On the
retreat John became homesick, and was
allowed to depart He had become
well-known to General Floyd and all
his command. On his departure he
went to take leave of the general, when
the following dialogue was bad:
General Floyd-Well, John, you
are going to leave us, eh ?
John-Yes, Marse Floyd ; it -pear*
like I co old do more good at home dan
bein' here ; so I thought Td go home
and courage up our people to hold on."
General F.-That's right, John.
But are you going to tell 'em that you
left us when running from the yan?
kee ?
John-No, sir ; no Mars Floyd, dat
I ain't Your may 'pend on my not
tellin' nothin' to 'moralize dem people."
General F.-But how will you get
aroucd telling them, John ?
John-Easy enough, Mars Floyd.
\t won't do to 'morallie dem people. I'm
goin' tell'em dis-da( when I left de
army it was in first rate spirrits, and dat,
owin' to de situation of de country aad de
way de land lay, we was advancin' baok
ards, and de Yankees was retreatin' on
to us.
Colossal Icebergs In the
South Atlantic.
Captain Hay, of the British ship
Persian Empire, which recently com?
pleted a voyage from Tacoma around
Cape Horn to England, reports to the
Hydrographie Office that be encounter?
ed, on March 27 last, an unusually
large amount of ice in latitude 50
degrees south, longitude 40 degrees
west. There were thirty-three Targe
icebergs near the ship, some of them
three hundred and fifty feet high,
while the lookout from aloft reported
the sea to be one mass of icebergs and
loose ice One immense ice-floe, which
was only about thirty feet above the
sea-level, was estimated to be-sixteen
miles square.
For several months similar reports of
exceptionally massive and numerous
icebergs in the South Atlantic have been
made by vessels rounding Cape Hom.
It would be interesting to discover
exactly what bas caused the South Polar
regions to discharge so much of their
i oe and to ship it northward by means
of the Antarctic currents into milder
latitudes. Possibly this extraordinary
phenomenon can be ultimately traced to
an excess of solar radiation during a
period, like the present, of excessive
solar activity. The Northern limit of
the Antarctic icedrift in the South
Atlantic occasionally reaches almost up
to the fortieth paral led of south latitude,
between the twentieth and twenty-fifth
meridians west. Fortunately the im?
mense icebergs seen by Captain Hay
have not drifted so far north.-N. Y.
Herald.
---
For Over Fifty Years.
Mas. WINSLOW'S SOOTHING SYRUP has been
used for children teething. It soothes the
child, softens the gum9, al IRV s all pain, cares
wind colic, H od is the best remedy for Diar?
rhoea. Twenty-five cern8 a bottle.
The Watchman and Southron and Cosmo?
politan will be sent to any address for one
year for $3.00 cash in advance. Have you
ever seen the Cosmopolitan ? Sample copie
at this office.
ANNOUNCEMENTS
ROBERT T. CARR.
Desires to inform the public that be is fully
equipped and prepared to do
TIN ROOFING, PLUMBING, REPAIRING PUMPS *
and anything usually done in a first-class
plumbing and tinning shop.
-Also
SETTING FANCY WOOD AND MARBLE
MANTLES, TILE HEARTHS,
FACINGS and GRATES. j
Makes a specialty of pulling in Electric
Bells, Annunciators, Speaking Tubes, &c.
ROBT. T. CARR.
Shop at J. B. Carr's Mill.
Communications left at Walsh k Co's Shoe
Store ur through post office will receive
prompt attention. Oct 26-o
Are you going to the
WORLD'S FAIR.
CHICAGO.
Vhe L. k N. offers choice several Routes
3 Trains Daily
Leave ATLANTA-W & A-10 a m ; 2:15
pro; 8;20 pm. Through Cars. Special
Rates, Velvet Vestibule Train, less than
23 hours to Chicago.
IT WILL PAY YOU to write me.
FRED. D. BUSH,
D P A LIN. R. R.,
3C Wall Street, Atlanta.
May 10, 1893. 45 5m.
li. I). JOHNSTON,
SUMTER, S. C.
-THE
Practical Carpenter,
Contractor and Builder,
ll rolTL!> RESPECTFULLY inform the
Y f citizens of Su lu Irr and surroundiu^
country that he is prepared to furnish plans,
?and estimates on brick and woodeo building*
All work entrusted to him will be done
first class.
SATISFACTION GUARANTEED.
Aug 19 _
FERTILIZERS!
FERTILIZERS ! FERTILIZERS !
Having bought largely, FOB CASH, a full ai
9ortment of,
Fertilizers, Acids and other Gi?.
We are prepared to fill ordetf tm
such at low figures and on reassuabU
terrat.
G. VVULBERN & CO..
Wholesale Grotatt,
171 and 173 E&*t Bay
Nov. 19. CharlestdB, 9 Q.
1*3
! SEEN IT i
Why the ?ight of the town
-ic
I Ducker & Bultman's New f
? . Store. i
0~
oj.; rS3
c?' r?o
f. Their goods are also new and f
i fresh, and it is certainly astonish- *
I ing how close they will sell goods *
I for the cash. |
ct T
They say they must have cash |
I and do not want the goods. ?
* go
Cali and see about it. |
?Si ff*
^^zf??fv^rFr^ ? & m v*?- ?s- tnt? *
?
urow
I? your chance to buy
FRUIT JARS.
We are selling Mason's best Jars at the
following prices:
1 qt. Jars 80c. per dozen.
1-2 gallon Jars .$1.10 per dozen.
KINGMAN & CO.
Aug 30
ALSM & POMP 431,
THE LEADERS.
Stylish Shoes, Strong* Shoes and Shoes
cheap enough for everybody are com?
mencing to come in for the Early Fall Trade.
All we have left in Summer Shoes will be sold NOW
At Greatly Reduced Prices.
We have just received a complete assortment of
.BEFORE BUYING
See fft#| Men's And {?ti) Ladies Button
Our ipa Shoes Our \f)L Boots,
We can meet any competition.
Walsh & Co.,
Monaghan Block ' - Sumter, S. C.
THE ONLY
Way to meet competition, the only way to sell goods
at a small profit, is to buy them right and give the
customer the benefit. We'are going to do this. We
keep everything that is kept in a First Class Gent's
FURNISHING STORE,
Such as Hats, Caps, Umbrellas, Collars, Cuffs, Neck?
ties of every description, Dress Shirts, plain and fancy
bosoms, Unlaundried Shirts, Negligee Shirts, Under?
wear, Socks. Boy's Stockings. Suspenders, Gloves,
Handkerchiefs. A little later we will have a full line
of Mackintoshes and Rubber Coats. Our expenses
are small, therefore, we mean to sell goods close and.
please everybody in country and
i? TOWN.
' CALL IN TO SEE US.
CUTTINO & DELGAR,
MASONIC TEMPLE,
P. S.-Suits and Pants made to order at astonishingly low
prices.
1893. Fall and Winter. 1893.
BULTMAN & BRO.
Opposite the Court House,
SIGN OF TES "BIS BED BOOT."
WE KEEP PACE WITH THE PROCESSION.
Everything up to Date. No fogy
methods. Procession is the rule.- Will
give you the
for the LEAST MONEY. For evidence
come and see our GOODS and be CON?
VINCED.
We have a complete line of Men's ?tej? ?m?m
Goodyear Welts at W*9 ****
Also a handsome Ladies Button fife ?%?k
Shoe at m ****
All of our goods will be sold at popular prices to suit the
STORMY HARD TIMES.
Bring in ONE DOLLAR ?nd we will give you a pair of
Ladies' Button Shoes, "Solid as a Rock," andfor another Dollar
you will get a pair Men's Shoes "Solid as iron."
Our TRUNKS are the CHEAPEST and
the BEST in the City.
JE WE LR I*.
j- -
Watches, Diamonds,
Sterling and Plated Silverware,
LARGE STOCK SUITABLE FOR WEDDING PRESENTS.
Clocks, Optical Goods, Fine Knives, Scissors
and Razors. Machine Needles, &c.
FOLSOM.
SIGN OF THE BIG WATCH.
ESTABLISHED 186S. Sumter. S. C.