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 A URIKF roruLAirAcoouNT 
 
 _- "^ OF ALL TIIL FlNAXCrAT> 
 
 -PANICS 
 
 AND COMMERCIAL 
 
 REVULSIONS 
 
 m^ IN THE 
 
 |f UNITED STATES, FROM 1G90 TO 1857 
 
 ^^ 
 
 tL A MORE PAUTICULAR HISTORY OF THE TWO 
 
 m- GREAT REVULSIONS OF 
 
 18 3 7 AND 18 5 7. 
 BY MEMBERS OP THE NEW-YORK PRESS. 
 
 y.uUivvA Hccording to Act of Congress, in the year 1857, by J. C. Hanky, ui the Cleric s OJlicc 
 of the District Co-irt of tho United States, for the Southern District of New-York. 
 
 NEW-YORK: 
 li J. (J. lIAiSTEY, PUI3LIS11KK. 
 
 185T. 
 
 k 
 
 RQ3^ ^ TQXJSI^T, WKQLBSAIiE ^C^ENTB. 
 
from 
 ^ .- Baker Library 
 
 xd^icc," CoppERtiKLJ), ''you know. Annual inco 
 
 .iiutii expenditure — nineteen, nineteen six ; rcsiult — ha 
 
 ,..o6nie — twenty i)ounilt^. Annual expenditure — twenty pou 
 
 ^^±\ result— nnsery. The blossom is blighted ; the leaf is witl 
 
 y^d of day goes down upon the dreary seene, and, in short, you 
 
 ix floored." — Mr. Micaavbku. 
 
 PREFACE. 
 105fil8 
 
 Thk difficulties under which the whole country ii^ at present 
 laboring will be richly compensated if they should lead to 
 such a renovation of our business system as shall prevent the 
 recurrence of similar periods of panic aud disaster. 
 
 To secure this most desirable end, it is, above all other 
 things, necessary, that the causes of financial revulsions should 
 be understood, and their incidents noted. 
 
 One of the objects of this little work is to aid the public in 
 coming to correct conclusions on this momentous subject. It 
 (jonsists, lirst, of tlid facts of the difierent periods of revulsion 
 in our history, compiled from the records of those periods. 
 Sccondl}^ we have presented a selection of the opinions of 
 eminent individuals respecting the causes of revulsion. 
 
 Other matters, of interest at the present moment, arc ap 
 pended and interspersed ; the whole forming, we trust, a tinu - 
 ly, interesting and useful compilation. 
 
 I^TIT'T 
 
3/ 
 
 PANICS AND RB^VULSIONS. 
 
 CHAPTER I. 
 
 PANICS AND REVULSIONS PREVIOUS TO THE GREAT REVULSION OF 1831. 
 
 The distinction between a Panic and a Revulsion in the commercial world, 
 is obvious. A Panic is a pressure in the money market without adequate 
 cause. A Revulsion, on the contrary, is pressure with adequate cause, and 
 that cause invariably is a previous Destruction of Value. A national Revul- 
 sion is a national pay day. The nation has been drawing on the Future, and 
 the Future dishonors the draft. The forcing process is then applied, wide- 
 spread ruin is the result, and a long period of paralysis ensues. 
 
 THE REVULSION OF 1690. 
 
 We must go as far back as 1690 to find the origin of paper money in New 
 England. In that year the pious and warlike colony of Massachusetts, in 
 the excess of its loyalty to the mother country, and its hatred of catholic 
 France, fitted ©ut, at a prodigious expense, an expedition against Quebec. 
 The expedition, commanded by Sir William Phipps, consisted of thirty-four 
 vessels and seven thousand men. The forces reached Quebec in safety, but 
 after landing, fighting two gallant actions, and bombarding the fortress, they 
 were compelled to retire. On their return, eight of the largest ships were 
 wrecked in the Gulf of St. Lawrence, and the expedition returned frustrated 
 and disheartened. To defray the immense expenses (immense for that period), 
 bills of credit were issued, which first initiated the colonies into the perilous 
 channel of a paper currency. The other colonies followed the example, when- 
 ever an emergency arose. Yery soon, the bills of credit depreciated in value, 
 and produced, in time, great disaster to the infant commerce of the colonies. 
 In New York, then a mere village, it required two dollars of paper to buy one 
 dollar of silver. In Boston, the depreciation was fifty per cent. 
 
 THE REVULSION OF 1*148. 
 In 1745, Massachusetts, ever ready for a tilt against the French, fitted out 
 a most costly expedition against Louisburgh, a powerful fortress on the island 
 of Cape Breton. The fortress was captured, and the expedition returned 
 cov(ired with glory. But the expense demanded a fresh issue of between two 
 and three millions in bills of credit, which soon depreciated to an unprece- 
 dented and alarming extent^ In the year 1^48, it took eleven hundred pounds 
 
 /63 
 
2 THE REVULSION OF 1780, ETC. 
 
 in their paper to purchase one hundred pounds in gold or silver. The paper 
 of all the colonies had wofully fallen in value. To procure a hundred pounds 
 in specie, required 
 
 In Massachusetts' paper, 1100 pounds, 
 
 " New York *' 190 " 
 
 *' East Jersey " 190 " 
 
 •' West Jersey *' 180 " 
 
 " Pennsylvania *' 180 " 
 
 " Maryland " 200 " 
 
 *' Virginia " 125 '' 
 
 " North Carolina " 1000 " 
 
 " South Carolina " TOO " 
 Such facts as these show the cause of the deep-rooted, and not yet eradi 
 
 cated antipathy of the American people to a paper currency of every descrip- 
 tion whatever. Thus early did they begin to attach an extravagant value to 
 the possession of hard cash. 
 
 THE REVULSION OF 1780. 
 The Revolutionary war caused the greatest destruction of value which this 
 country has ever known. It cost, in money and money's worth, not less than 
 three hundred milhons of dollars, every dollar of which somebody had to pay. 
 The year of stagnation and prostration which began with 1780, and continued 
 till 1789, were the years in which the country, (without knowing it), was pay- 
 ing for the war. Congress had issued one hundred and sixty miUions of paper 
 money, which after falling lower and lower in value, became in 1780 abso- 
 lutely worthless, and ceased to circulate. The people, impoyerished by the 
 war, without a currency of any kind, except a few millions of specie, without 
 union, without a practicable government, without credit either at home or 
 abroad, would have utterly despaired had not the bounty of the soil and their 
 own industrious hands always secured a sufficiency of the bare necessaries of 
 life. There were no great cities, then, swarming with laborers living from 
 hand to mouth, whom the first shock of a financial reverse deprived of their 
 only means of subsistence. A nation of hardy yeomen, mostly cultivating 
 their own land, making their own clothes, and owning their own houses, is to 
 a great extent, independent of all reverses, except such as destroy or diminish 
 the productions of the earth. With the administration of General Washing- 
 ton and Alexander Hamilton, the country began its wonderful career of 
 business prosperity. 
 SUSPENSION OF SPECIE PAYMENTS BY THE BANK OF ENGLAND IN 1*I9Y. 
 
 "On the twenty-sixth of February, 1797, Sunday, an order of the Privy 
 Council was transmitted to the Bank of England prohibiting the further pay- 
 ment of specie, until the pleasure of Parliament should be made known. Par- 
 liament took the subject into consideration the next day, February 27th, and 
 approved of the order of the Privy Council. The suspension of specie pay- 
 ments was originally intended to be only a temporary measure, and the 
 strongest assurances were given to this effect on the part of the Bank and the 
 Government. 
 
SUSPENSION OF BANK OF ENGLAND. 8 
 
 "It was, however, continued, from time to time, but always as a temporary 
 measure, until 1819, 22 years after the suspension, steps began seriously to be 
 taken for resuming specie payments, which were, in fact, resumed on the 1st 
 of May, 1 823. The Bank thus presents the singular example of a virtual 
 insolvency for 26 years, and eventual redemption of its paper and credit ; and 
 this return to specie payment was not attenae'd by any sudden revulsion or 
 commercial shock. Preparations were made for it long beforehand. The 
 amount of the notes of the Bank in circulation was reduced from about 
 £24,000,000 to about £18,000,000. In the mean time a new coinage of gold 
 had been issued, in 1821-22, to the amount of £14,877,547, which supplied the 
 chasm made in the circulation of the country by the reduction of the amount 
 of Bank of England notes, and also went to replenish the vaults of the Bank 
 in preparation for the run that might be made on the resumption of payment ; 
 but the danger was passed with the greatest facility. 
 
 " The bank notes had depreciated, or, as the phrase was at the time, the price 
 of bullion had gradually risen, so as to be, at one period, at the rate of 14 or 15 
 per cent. ; and if the Bank had then stopped suddenly, and, if we may imagine it 
 possible, had redeemed the whole of its paper, £25,000,000 or more, with 
 specie, it would have been a gain to the holders of the notes, in the whole, of 
 £3,500,000, and a loss to the then debtors to the Bank of the same amount, 
 assuming the depreciation to be 14 per cent.; while the Bank itself would 
 have lost only the amount of bad debts, which would have been made by such 
 a sudden and tremendous revulsion ; for, the moment of the Bank resuming 
 to pay specie itself, by this very operation, it reduced the payments to the 
 Bank, by its debtors to specie ; for the Bank had a right to demand payment 
 of notes and bills discounted in specie, or, what would have been equivalent, 
 its own notes. Such a measure would evidently have shaken the kingdom to 
 its foundation, and probably have brought down its commercial, financial, and 
 economical system in ruins. Instead of such a catastrophe, either in discon- 
 tinuing or renewing payments of specie, each of which was equally hazardous 
 and difficult, ihe transition in the depreciation of the paper was gradual and 
 almost imperceptible, and after the overthrow of Napoleon, its rise in value was 
 again, for the most part, as gradual, until it arrived to a par with gold, before 
 the resumption of specie payments. In a pohtical, financial, and commercial 
 point of view, this Institution, from the suspension to the resumption of specie 
 payments, presents a stupendous phenomena unparallelled in history. The 
 suspension of payment, in 1797, was one of those bold measures which are 
 justified only by extreme cases, and which, in such cases, are only prudent 
 measures. The whole system of financial administration, and all the commer- 
 cial combinations and connexions of the kingdom, were involved in the affairs 
 of the Institution at the time of stopping, 1797. The holders of the notes, and 
 the depositors, were pressing to the Bank for specie, of which there remained 
 in the vaults only £1,272,000 while the notes and claims outstanding, and 
 which might be demanded, were £8,640,250, and the demands were pouring 
 in with a still increasing tide. It seemed probable that the Bank must stop, 
 after paying out this specie ; the shock, whatever it might be, must be encoun- 
 tered, and it was very justly supposed that it would be in a measure broken, 
 in anticipating the necessity, and stopping with more than a miUion in its 
 vaults, instead of waiting until they should have been emptied. 
 
 The reasons given in Parliament in favor of this suspension of payment, and 
 of its continuance from time to time, were : — 1. That the Bank could not con- 
 tinue its discounts and its payments in specie ; and if its discount were stopped 
 or greatly reduced, the commerce of the country would be destroyed : 2. 
 That the credit of the government would be lost if the Bank should cease to 
 make advances on its taxes : 8. That specie payments were of no benefit to 
 England, as the specie, on being drawn from the Bank, went abroad : 4. That 
 it was more important that the Bank should exist, than that it should 
 
4 THE PANIC OF 1798 IN THE UNITED STATES, ETC. 
 
 meet its payments at the expense of its existence : 5. That the commercial 
 arrangements, combinations, and relations, existing in the kingdom, would be 
 broken up by the dissolution of this Institution, and, being once broken up, 
 could never be renewed ; and, 6. That it was better to stop specie payments, 
 while specie and bullion could be kept in the country by that means. Such 
 were the reasons given in favor of the measure, and though it has been cen- 
 sured by some, who have pretended to discover in it the cause of much finan- 
 cial and commercial derangement, yet they do not show by what other course 
 Great Britain could have struggled through the terrible conflicts of that 
 period." 
 
 THE PANIC OF 1798 IN THE UNITED STATES. 
 This was really a terrible time. We call it a Panic, because, so far as the 
 histbry of the period records, there does not appear to have been any adequate 
 cause for the alarm. In other words, there does not appear to have been a 
 previous destruction of value to a sufficient amount to cause a genuine com- 
 mercial revulsion. The nation thought itself to be on the very eve of a war 
 with France. General Washington had accepted the command of the army, 
 and General Hamilton was his second. An army was raising, and everything 
 foreboded an immediate conflict. Meanwhile the French armies under Bone- 
 parte were filling the world with the fame of their exploits, and England, that 
 bore the brunt of that great struggle, seemed about to be overpowered. A 
 financial panic in London was at its height, and the Bank of England had 
 suspended specie payment. John Adams was president of the United States, 
 and the ahen and sedition laws were in force, keeping the nation in ceaseless 
 and bitter agitation. Political feeling ran so high, that men of opposite 
 parties could scarcely salute one another in the streets, and thousands were 
 of the opinion that the young republic had run its course. In the midst of 
 these events a financial panic arose, and hundreds of merchants failed. In 
 those days, failure to meet an obligation was a serious affair, as imprisonment 
 for debt had no where been abohshed. The prisons of Philadelphia, (then 
 our principal city,) were filled with merchants, many of whom were of old and 
 honorable standing in the business of the country. The panic was severe but 
 brief. The sky soon brightened. Peace was made with France. The elec- 
 tion of Jefferson and Burr in 1800 gave to the democratic party its first tri- 
 umph. The country was satisfied, and bounded forward in its bright career. 
 
 THE REVULSION OF 1808. 
 
 A war is, with regard to business, a three-edged sword. The anticipation 
 of it is one disaster ; carrying it on, is another ; paying for it, after it is over, 
 is a third. From 1808 to 1817, the business of the United States was, more 
 or less, affected by the war of 1812. Jefferson's embargo (passed in Decem- 
 ber, 1807) put an end, for a time, to the commerce of Xho, country. It pro- 
 hibited the departure of any merchant vessel from the ports of the United 
 States ! The effect may be imagined. Merchants, clerks, seamen, shipmas- 
 ters, and all the great army of men who are supported by commerce, were 
 deprived of employment and revenue. The great planting interest of the 
 
JACKSON'S WAR ON THE UNITED STATES BANK. 6 
 
 South was first paralyzed, then ruined. The great cities languished; the 
 farmers of the North, who had been growing rich by supplying the beUigerent 
 powers of Europe with bread and meat, could no longer sell their surplus pro- 
 ductions. Seldom have the temper and patriotism of the country been so 
 severely tried as during the operation of the various embargo and non-inter- 
 course acts of Jefferson and his successor. 
 
 THE REVULSION OP 1815. 
 
 This was the year of the general peace. Our own war was at an end, and 
 the exile of Napoleon at St. Helena gave repose to Europe. These happy 
 events, however, brought upon us one of the severest commercial reverses we 
 have ever experienced. Despite the embargo and the war of 1812, a consider- 
 able trade had been latterly carried on between the United States and Europe, 
 and the war itself had given, as war always does, an unnatural activity to 
 many branches of business. With the peace of 1816, ceased for a long time 
 the European demand for American provisions. The currency, too, had be- 
 come exceedingly deranged. In 181 Y, the Bank of the United States began 
 its career by importing into the country over seven miUions of dollars in specie, 
 at an expense of half a million of dollars. Manufactures revived under the 
 operation of the revised tariff, and the country, for the next fourteen years, 
 enjoyed great and nearly uninterrupted prosperity. There were, it is true, 
 occasional periods of panic and disaster, as in 1822 and 1825, but at no time" 
 was there a general revulsion and universal ruin, such as occurred in 1837. 
 
 CHAPTER II. 
 
 EVENTS PRECEDING THE GREAT CRASH OF 1837. 
 Our first object shall be to narrate the facts respecting the revulsion of 1837, 
 leaving to another chapter the various opinions respecting it which the time 
 called forth. The facts are few and easy to be understood. 
 
 GEN. Jackson's war upon the BA^lK of the united states. 
 In the year 1832, the Bank of the United States, situated in the city of 
 Philadelphia, held a position in the finances of the western continent similar 
 to that now enjoyed in the eastern continent by the Bank of England. It 
 had existed for fifteen years, during the greater part of which it had been 
 managed with skill and success. Its capital was 35 millions of dollars, which, 
 owing to the high premium commanded by the stock, was equivalent to near- 
 ly 50 millions. The number of its directors was twenty-five, of whom five 
 were chosen by the federal government, and fifteen by the stockholders. 
 The stockholders were 3400 in number, of whom more than 500 were foreign- 
 ers. The bank had branches in all the principal cities of the Union. Its 
 clear profits in the year 1831, reached the enormous sum of $3,455,598. It 
 
6 VETO OF THE RE-CHARTERING BILL. 
 
 was the bank in which was deposited the public money, which disbursed the 
 public money, and which, at times Avhen the public money was short, made 
 up the deficiency. The great fact respecting it was, that the bank notes 
 issued by the Bank of the United States were as good as gold in any part of 
 the United States. There was no discount upon them anywhere. A man 
 provided with a sufficiency of United States Bank bills, could travel from 
 Maine to Georgia, and from Georgia to Astoria, without incurring the slight- 
 est loss or inconvenience. In fact, wherever there was a civilized commu- 
 nity on earth, there the bills of this great bank could be exchanged for 
 commodities. In London its credit was as unquestioned as that of the Bank 
 of England. 
 
 General Jackson was resolved upon the destruction of this institution. His 
 reasons have been variously stated. His enemies said then, and say now, 
 that he destroyed the bank because he personally hated Nicholas Biddle, its 
 celebrated president. Others maintain that the destruction of the bank was 
 a tribute to the known will of a majority of the people, who from time imme- 
 morial had distrusted all banks, and who in particular detested " The Monster," 
 as the Bank of the United States was then called by its opponents. Others 
 again, assert that General Jackson put down the bank for reasons purely 
 patriotic, because he really thought the existence of such a powerful moneyed 
 institution dangerous to liberty, and dangerous to the independence of the 
 Executive. The probabihty is, that all these motives had weight with the 
 General. Whatever his motives may have been, there is no doubt that he 
 accomplished his purpose with indomitable resolution, and in spite of obstacles 
 that would have deterred any man less resolute than himself. At the present 
 time there are few intelligent persons who, on a calm review of the whole 
 transaction, will not admit that the total separation of the general govern- 
 ment from banks and banking, is not merely in accordance with the genius 
 of our institutions, but practically right and wise. 
 
 VETO OF THE RE-CHARTERING BILL. 
 
 In 1832, the charter of the Bank of the United States had four years yet to 
 run, and a bill passed both houses of Congress renewing the charter. This 
 bill was laid before President Jackson for his signature on the 4th of July, 
 and on the 10th of the same month he returned it to the Senate vetoed ! His 
 objections to the bill were stated at great length, but the principal objection 
 was expressed with forcible brevity at the beginning of the message, as fol- 
 lows : — 
 
 " The present corporate body, denominated ' The President, Directors, and 
 Company of the Bank of the United States,' will have existed, at the time this 
 act is intended to take eft'ect, twenty years. It enjoys an exclusive privilege 
 of banking under the authority of the General Government, a monopoly of its 
 favor and support, and, as a necessary consequence, almost a monopoly of the 
 foreign and domestic exchange. The powers, privileges, and favors bestowed 
 upon it, in the original charter, by increasing the value of the stock far above 
 its par value, operated as a gratuity of many millions to the stockholders. 
 
REMOVAL OF THE BEPOSITES. 7 
 
 *' An apology may be found for the failure to guard against this result, in 
 consideration that the effect of the original act of incorporation could not be 
 certainly foreseen at the time of its passage. The act before me proposes 
 another gratuity to the holders of the same stock, and, in many cases, to the 
 same men, of at least seven miUions more, ^his donation finds no apology in 
 any uncertainty as to the effect of the act. On all hands it is conceded that 
 its passage will increase at least twenty or thirty per cent, more, the market 
 price of the stock, subject to the payment of the annuity of $200,000 per year, 
 secured by the act ; thus adding, in a moment, one fourth to its par value. 
 It is not our own citizens only who are to receive the bounty of our govern- 
 ment. More than eight millions of the stock of this bank are held by 
 foreigners. By this act the American republic proposes virtually to make 
 them a present of some millions of dollars. For these gratuities to foreigners, 
 and to some of our own opulent citizens, the act secures no equivalent what- 
 ever. They are the certain gains of the present stockholders under the oper- 
 ation of this act, after making full allowance for the payment of the bonus. 
 
 " Every monopoly, and all exclusive privileges, are granted at the expense 
 of the public, which ought to receive a fair equivalent. The many millions 
 which the act proposes to bestow on the stockholders of the existing bank, 
 must come, directly or indirectly, out of the earnings of the American people. 
 It is due to them, therefore, if their government sell monopolies and exclusive 
 privileges, that they should at least axact for them as much as they are worth 
 in open market. The value of the monopoly in this case may be correctly 
 ascertained. The twenty-eight millions of stock would probably be at an 
 advance of fifty per cent., and command in market at least forty -two milhons 
 of dollars, subject to the payment of the present bonus. The present value of 
 the monopoly, therefore, is seventeen millions of dollars, and this the act pro- 
 poses to sell for three millions, payable in fifteen annual instalments of 
 $200,000 each. 
 
 " It is not conceivable how the present stockholders can have any claim to 
 the special favor of the government. The present corporation has enjoyed 
 its monopoly during the period stipulated in the original contract. If we must 
 have such a corporation, why should not the government sell oftt the whole 
 stock, and thus secure to the people the full market value of the privileges 
 granted ? Why should not Congress create and sell twenty-eight millions of 
 stock, incorporating the purchasers with all the powers and privileges secured 
 in this act, and putting the premium upon the sales into the Treasury ? 
 
 "But this act does not permit competition in the purchase of this monopoly. 
 It seems to be predicated on the erroneous idea, that the present stockholders 
 have a prescriptive right, not only to the favor but to the bounty of the gov- 
 ernment. It appears that more than a fourth part of the stock is held by 
 foreigners, and the residue^ is held by a few hundred of our own citizens, 
 chiefly of the richest class : for their benefit does this act exclude the whole 
 American people from competition in the purchase of this monopoly." 
 
 This veto produced an intense excitement throughout the country, which 
 many of our readers will remember. The arguments of Old Hickory were 
 never answered, bnt he was abused without stint. 
 
 REMOVAL OF THE DEPOSITES. 
 The failure of the Bank of the United States to obtain a renewal of its char- 
 ter produced no immediate effect upon the finances of the country. The Bank 
 had four years in which to wind up its affairs, and under so accompHshed a 
 financier as Nicholas Biddle, it no doubt might have transferred its business 
 gradually to other institutions, and gone out of existence without seriously dis- 
 
8 THE INFLATION OF 1885-36. 
 
 turbing the monetary affairs of the nation. But General Jackson's next blow 
 struck home. Re-elected in 1832 on the bank issue, and in spite of the Bank's 
 active opposition, he was no sooner inaugurated, than he resolved upon his 
 great stroke of removing the pubhc money from the custody of the United States 
 Bank, and distributing it among the local banks of the several States of the 
 Union. In the fall of 1833, no less than eight miUions of the public money 
 were thus removed from the vaults of the great Bank. The effect was imme- 
 diate and disastrous. The Bank, shorn of so much practical capital, was com- 
 pelled to curtail its discounts to such an extent as to render money for a few 
 months exceedingly tight. There were many failures. In a short time, how- 
 ever, the distributed capital began to tell, and an enormous expansion of the 
 currency set in, which not only reheved the business world from its embarrass- 
 ments, but gave an inflation to the affairs of the country of an unparalleled 
 character. State banks were created all over the country, and, governed as 
 most of them were by men unexperienced in banking, they were easily drawn 
 into the seductive snare of excessive issues of paper. 
 
 THE INFLATION OF 1835-36. 
 
 In England : — The joint stock banks had increased with startling rapidity. 
 They had begun in 1825, and in September 1835, they numbered 102, exclu- 
 sive of an immense number of branches. During the preceding five months 
 they had been increasing at the rate of five per montn, exclusive of branches; 
 yet there was but a comparatively small increase of their notes — then whence 
 the enormous profits they were known to make ? It was by means of bank 
 credits. Tbey were in the habit of sending the paper they discounted imme- 
 diately dp to*London to be re-discounted there, thus banking to an indefinite 
 extent oii credit. *'To such an extent," said the Edinburgh Review for July, 
 1836, "had this system been carried, that we are weU assured that certain 
 banks, with less than £500,000 of paid up capital, have discounted bills and 
 made advances to the extent of from^?;<3 to six miUions; and the engagements 
 of others have been even more incommensurate with their capital." The con- 
 sequence of this state of things was, that during the first three months of 1836, 
 one hundred and four joint stock companies were formed in Manchester and 
 Liverpool alone, with an aggregate capital of £3*7, 987, 500 ; and Mr. Poulett 
 Thompson stated in the House of Commons, that the number of fresh compa- 
 nies on the tapis, for every imaginable object, from making railways in Hin- 
 dostan to burying the dead at home, were between three and four hundred, 
 with an aggregate projected capital of nearly two hundred millions sterling. 
 
 In the United States ;— The inflation is too well remembered among us to 
 require an enlarged statement here. Suffice it to say, that the country lost its 
 senses in its haste to be rich. The credit system was carried to an extent 
 which those who can remember the facts'can scarcely beheve. Men without 
 a thousand dollars of capital bought cotton plantations and slaves, and drew 
 on brokers immediately, on the credit of the first crop, before the seed had 
 been sown. Land speculation was the rage. Millions of acres of land, which 
 
BANKS AND BANKING CAPITAL. 
 
 9 
 
 were valued at prices ranging from one hundred dollars to a thousand dollars 
 an acre, have not yet reached the value at which they were then sold and re- 
 sold. The walls of the streets were covered with maps of towns that were still 
 miles in the woods or feet under water. AIL this will be brought out fully in 
 another chapter. 
 
 Comparative view of Imports into the United States, and Exports to Foreign 
 Countries for 13 years. 
 
 V/^or. 
 
 Imports. 
 
 Exports of Domestic 
 
 Total 
 
 xear. 
 
 Produce & Articles. 
 
 Exports. 
 
 1824 
 
 $80,549,007 
 
 $50,649,500 
 
 $75,986,657 
 
 1825 
 
 96,340,075 
 
 66,944,745 
 
 99,535,388 
 
 1826 
 
 84,974,477 
 
 53,055,710 
 
 77,595,322 
 
 1827 
 
 79,484,068 
 
 58,921,691 
 
 82,324,827 
 
 1828 
 
 88,509,824 
 
 50,669,669 
 
 72,264,686 
 
 1829 
 
 74,492,527 
 
 55,700,193 
 
 72,358,671 
 
 1830 
 
 70,876,920 
 
 59,462,029 
 
 73,849,508 
 
 1831 
 
 103,121,124 
 
 61,277,027 
 
 81,310,583 
 
 1832 
 
 101,029,266 
 
 63,137,470 
 
 87,176,943 
 
 1833 
 
 108,118,311 
 
 70,317,698 
 
 90,140,433 
 
 1834 
 
 126,521,332 
 
 81,024,162 
 
 104,336,973 
 
 1835 
 
 149,895,742 
 
 101,189,082 
 
 121,693,577 
 
 183d 
 
 189.980,035 
 
 106,916,680 
 
 128,663,040 
 
 TABLE OF BANKS AND BANKING CAPITAL IN THE UNITED STATES 
 
 FROM 1792 TO 1836. 
 
 Year 
 
 Banks 
 
 U. S. Bank 
 
 Total Capital 
 
 1792 
 
 12 
 
 $10,000,000 
 
 $18,935,000 
 
 1801 
 
 33 
 
 do 
 
 33,550,000 
 
 1805 
 
 76 
 
 do 
 
 50,493,000 
 
 1811 
 
 89 
 
 do 
 
 52,610,600 
 
 1815 
 
 208 
 
 Defunct 
 
 82,209,590 
 
 1816 
 
 246 
 
 do 
 
 89,802,422 
 
 1820 
 
 308 
 
 35,000,000 ■ 
 
 137,210,611 
 
 1830 
 
 330 
 
 do 
 
 145,192,268 
 
 1834 
 
 507 
 
 do 
 
 205,123,788 
 
 1835 
 
 558 
 
 do 
 
 231,250,337 
 
 1836 
 
 567 
 
 do 
 
 251,875,292 
 
 1837 
 
 677 
 
 do 
 
 378,421,168 
 
 I 
 
 STRIKES AND TRADE UNIONS. . 
 
 As the manufacture of paper money proceeded, provisions and other neces- 
 saries of life rose in price, and mechanics universally demanded higher wages. 
 Strikes were the order of the day. We read in the Journal of Commerce of 
 Feb. 1836, as follows : 
 
 '* On the 23rd inst., the Riggers and Ship-laborers turned out in large num- 
 bers, and went about the wharves in a body, compelling such of their profes- 
 sion as they found at work, to quit the business in. which they were engaged. 
 Almost simultaneously a squad of day-laborers, of another description, chiefly 
 foreigners, went through the burnt district compelling their fellow-laborera 
 about the premises to quit work, because they were receiving $1 a day instead 
 
10 STRIKES AND TRADE UNIONS. 
 
 of $1 25, which these imported dictators had determined was the rightful 
 sum." 
 
 In the N. Y. American, of about the same date, we find the following : — 
 
 " A sea-faring man, from exposure to severe weather, was on his arrival in 
 port sent to the city hospital, where his general health was restored, but both 
 feet were lost. Being cured, he could no longer, by the rule of the hospital, 
 be kept there ; yet to send him forth such a cripple, was to consign him to 
 starvation. Some of the governors, therefore, caused artificial feet to be 
 made for him at a cost of 70 dollars, and then, as he said he had been ac- 
 customed on ship-board to handle the sail-needle, obtained employment for 
 him with a sail-maker, and placed him in special charge of the foreman of the 
 loft, with the request that he might be suffered to earn whatever he could. 
 The cripple, happy and grateful, went to his new trade, and for two days was 
 unmolested, as was his employers ; and it was ascertained that by such work 
 he could earn enough to keep him above want. On the third day, a deputa- 
 tion from the Trades' Union went to the sail-loft — forbade the employment of 
 that helpless sailor — forbade him, in like manner, to work — and he was obliged 
 to relinquish the place. The governors of the hospital received him back 
 within their walls, or he would have been left without a meal, or a place to 
 lay his head." 
 
 We add one more case. "In March, 1836, a number of Journeymen Gran- 
 ite Cutters, nd^t members of the Union, were obliged to combine in order to 
 protect themselves against its machinations. In their Manifesto they declare 
 that the Unions had formally proscri];)ed all journeymen who refused to join 
 or co-operate with it — had undertaken to prevent such journeymen from ob- 
 taining employment in any town in the United States where Trades' Unions 
 were established — had, to use their own phrase, nullified two Yards, because 
 their proprietors had refused to discharge a foreman at the bidding of the 
 Union — had threatened death, tar and feathers, battery, and every species of 
 personal indignity, to those who might presume to labor in those Yards — and, 
 to intimidate strange journeymen, had declared, that unless they acquiesced, 
 they would forever be objects of persecution — had seduced apprentices from 
 the nullified Yards, and forced them as journeymen upon others — and that 
 such proceedings had caused contracts to the amount of $260,000 to be re- 
 moved to other States." 
 
 To show the angry spirit that prevailed at that time of universal prosperity, 
 we copy another case from the Journal of Commerce : 
 
 " Some days back, the journeymen tailors made out a new tariff of prices 
 to be paid by their employers, and also laid down certain rules relative to the 
 manner in which master-tailors should give out work. According to one of 
 these rules, every master tailor should keep a slate hung up in his store, and 
 enter on it every piece of work which he gave to a journeyman to make, and 
 that no journeyman should get work to do except in his turn. For example, 
 if two journeymen successively got each a coat to make, and the one who re- 
 ceived the second was more industrious than the first, or a more expeditious 
 tvorkman, and finished his work sooner, he must wait idle until the other man 
 had also finished his work and was given another job. So that the idle and 
 industrious, or awkward and expert workman were completely on a par by 
 these absurd regulations — to the monstrous injustice of the operative, and 
 serious inconvenience and loss of the employer. The master-tailors very pro- 
 perly refused to adopt so ridiculous a rule, or comply with the new scale of 
 prices dictated by the journeymen, and the latter very generally turned out, 
 and refused to work. Some of the journeymen tailors, however, were willing 
 to work at the old prices, and among them was a man named William Wright, 
 
STRIKES AND TRADES UNIONS. 11 
 
 in the employment of Messrs. Stokes & Co., Broadway. This man could earn 
 twelve dollars a week, and having a large family to support, was unwilling to 
 remain idle, but was obliged to do so from downright fear, as some of the 
 other journeymen tailors called on him, and threatened him, that if he did not 
 leave his employment they would cut off his hands or kill him I Intimidated 
 by these threats, Wright left his work ; a:^d his employers, in whose service 
 he had been for many years, and who had a great respect for him, having dis- 
 covered that he left them solely from intimidation, determined to prosecute 
 the lawless ruffians who had driven him away, and summoned Wright to the 
 police office yesterday evening in order to obtain his testimony against them. 
 Such a complete system of terror, however, have the journeymen tailors es- 
 tablished in their body, that Wright was afraid to tell the names of any of the 
 aggressors, and though Mr. Wyman said all he could to persuade hira to it, 
 promising him full protection against any consequences, Wright still dechned 
 mentioning any names, lest his doing so might cause his destruction. Finding 
 that threats or promises were alike unavailing, Mr. Wyman was obliged to 
 commit him to prison for refusing to give evidence ; and thus an honest, in- 
 dustrious, poor man, with a large family, has been obliged first to remain idle, 
 and is afterwards committed to prison for fear of disobeying the dictates of a 
 lawless combination." 
 
 The following advertisement from the papers of the same date, is also sig- 
 nificant : 
 
 " The public in general, and my binders in particular, are hereby 
 informed that I have now at work four and twenty good permanent workmen, 
 and several more engaged. to commence on the 1st of May, all of whom are 
 little affected with the brutal leprosy of Blue-Monday habits, and the moral 
 gangrene of Trades' Union principles. Hence, my binders may rely upon 
 steady employment, and the pubhc upon good work, punctually performed ; 
 and they and myself find just cause to fehcitate ourselves upon the prompt 
 and effectual disposal, at once and forever, of the inconvenience, injustice and 
 nuisance of perpetual variations, regular combinations, and periodical strikes 
 from marauding gangs of transient and tramping Trades' Unionists, who have 
 proved themselves as destitute of every moral principle as they have become 
 notorious for their wickedness and folly, their presumption, their insolence 
 and audacity. 
 
 "HORACE H. DAY, 
 
 " Shoe, Hat and Cap Manufacturer. 
 
 *' Neio Brunswick^ April 6, 1836." 
 
 CHAPTER III. 
 
 DISASTERS JUST PREVIOUS TO THE GREAT REVULSION OF 1837. 
 
 The reader will bear in mind that the year 1835 was, so far as appearances 
 went, the most buoyant and prosperous year which the business men of the 
 United States had ever known. The country was in the very highest spirits. 
 If ever a warning voice was heard, it was not heeded, and the very prophets 
 themselves scarcely believed their own predictions. Nowhere was the infla- 
 tion of credit carried to a greater extent than in the city of New Yojk. New 
 blocks of costly houses were erected, and that imposing and magnificent region 
 
12 THE GREAT FIRE OF 1835. 
 
 which we now call "Up-Town," was beginning to rise, like an exhalation, from 
 a wilderness of rock, sand and shanty. Extravagance was the order of the 
 day, — extravagance in business, in speculation, in expenditure, and in talk. 
 " In 1834," said a newspaper of the time, " the current increased. The new 
 squares up-town were built— great profits made in lots near town — speculation 
 began also in the South — cotton culture increased. In 1835 the madness 
 made further progress, and continued increasing up to 1836, in July, when it 
 had reached its height. In the course of these events, prices of everything 
 increased — of lands, cotton, provisions — every article of necessity and use." 
 We now commence our catalogue of disasters with 
 
 THE GREAT FIRE OF 1835. 
 
 To convey to our younger readers a vivid idea of this great calamity, which, 
 in the space of about twenty-two hours, destroyed seventeen blocks of postly 
 stores, we cannot do better than copy the following account from " Watson^s 
 Annals of Neiju York ;" 
 
 " The great conflagration of New York city, in December, 1835, — the 
 greatest wonder and calamity, and befalling the greatest city, hitherto known 
 to the Western world, — were subjects of sufficient excitement and interest, to 
 induce a journey in mid-winter, purposely to visit the. ruins, and to see the 
 havoc and desolation which the devouring element had inflicted. 
 
 " Such a scene of devastation can only be expected to occur once in a cen- 
 tury, or but once in a life ; and when the spectacle once got up^ is showed off 
 at such tremendous expense, and with such terrific display, it must surely be 
 worth a journey of observation 'to note and observe!' Such thoughts in- 
 fluenced my mind, and induced the visit to the scene of destruction, on Christ- 
 mas-day, the 25th of December, 1835, being eight days after the disaster had 
 closed its career of ravage and dismay. 
 
 " On my arrival .in the city of New York, my first impulse was to inspect 
 the awful ruins. In doing so, I was necessarily obliged to see, beforehand, 
 the persons of numerous citizens at the wharves and along the streets. Their 
 faces nor actions, indicated none of those excited feelings, which my own 
 . emotion might have suggested as very natural from the occasion. Indeed, it 
 was but too true, that the wonder of the occasion had much subsided ; and 
 this agreed with the fact before observed, in the intermediate journey, that 
 the mass of traveUing passengers — equal to 150 persons, had already found 
 out other topics of conversation and interest. 
 
 " Soon, however, I entered upon the »cene of ruin, and oh ! what a scene 
 — to comprise an area of forty -five city acres, in absolute destruction. To see 
 still the charred, the blazing and smouldering embers, to scent the tainted air 
 loaded with smoke from the still consuming parcels of cotton, coffee, tobacco, 
 tea, cotton and woollen goods, still resting in cellars, covered with masses of 
 bricks and broken granite. Of 628 buildings of the most costly fabric, of four 
 and five stories height, which were consumed, only one^ a conspicuous Sala- 
 mander^ was remaining ; — Benson's fire-proof copper store, of four stories, 
 upon No. 83 Water street. There it stood unscathed, an Oasis in the sur- 
 rounding desert. 
 
 " It was passing strange, to contemplate in one view, so great a mass of 
 towering architecture as 528 houses of brick and granite, all prostrated^ all 
 gone down into their own tombs, in their several cellars ; or in some cases 
 tumbling into the narrow streets, and clogging up their passage. Here and 
 there, were to be seen craggcd and dofornicd fraficmenls of standing walls, 
 
THE GKEAT FIKE OF 1835. 13 
 
 some of one story — some more slender and lofty, of two and three stories, 
 acting as pointers and indices to the ruined area, and warning the inquisitive 
 explorer like myself, to beware of coming within the verge of their expected 
 fall.^ On some they had fallen and broken limbs, even while I was there. 
 Amid these ruins, guided by the remains of the several former streets, were 
 to be seen continuous Hues of male and -ifemale passengers, come in hoHday 
 clothes from country villages, to behold the catastrophe. I speak of them 
 generally as strangers ; for in truth, as I afterwards ascertained, the proper 
 inhabitants of New York had already ceased to visit the place, as an affair of 
 worn-out character, superseded by something more recent and of fresher 
 news. Even as I overheard some gentlemen near the place, conversing and 
 saying, that' " usually their occasions of excitement lasted twenty-four hpurs ; 
 but here was one of thirty-eight hours, and now no longer such." Trtly, this 
 destruction has fallen upon men of peculiar elasticity of spirit and enterprise. 
 It is almost wholly upon the mercantile class, accustomed to risk and chance, 
 and who are habituated to recover from mishaps and disasters. They were 
 very generally insured; and so generally too, that the chief of their present 
 concern, is the probability of the Insurance companies being unable to divide 
 more than an average of fifty per cent. Yet losing as they must, there is no 
 betrayal of heart-sorrow in the countenances of the street walkers, nor in the , 
 congregations of the churches. They still look wholly like their former-selves, ' 
 —yea more, they even give to other charities ; for instance, at Dr. Brodhead's 
 church where I was, they gathered in the annual collection for missionary 
 purposes 820 dollars. ,It is probable that two-thirds of all the famihes in New- 
 York, might themselves become hberal contributors to the sufferers. 
 
 " I visited the ruins both by day and by night, spending in such observations 
 from one to two hours at a time. It was sad to see the cartloads of goods, 
 which could even at the end of a week or ten days after the fire, still be 
 rescued from the heated cellars. Thus great piles of ready roasted coffee was 
 brought out ; piece after piece of caHcoes and worsted, scorched and smoking, 
 were drawn out of others ; piles of prepared tobacco for chewing ; numerous 
 pigs of lead ; masses of bar iron, and iron chains ; cotton in bales, burning in 
 places and extinguished in others ; laboring men, all dingy with the smut of 
 the fire, working in many places to clear away the rubbish and to still preserve 
 something from the flames. 
 
 " The best and most extensive perspective view of the whole area, was to 
 be seen from Coenties slip, looking thence across to the line of Wall street 
 as & back ground. I was so impressed with the utility of preserving such a 
 spectacle for people at a distance, and for posterity, that I immediately sug- 
 gested to Col. Stone, the editor of the ' Commercial Advertiser,' that a call 
 should be made for some one or two hthographic views of the scene ; and 
 after I returned home, I directly prompted Mr. Breton to go on and endeavor 
 to execute them. He agreed, but soon after declined, because of the proposed 
 diorama of the same by Wright. Still, however, the print is a desideratum. 
 
 " The lurid glare of the night spectacle, seen as I saw it on the 28th of 
 December, just before daylight, was awfully impressive. Fires of smaller di- 
 mensions could be seen every here and there, of goods still consuming, and afford- 
 mg enough of illumination amidst the general gloom, to show the explorer his 
 path-way along the former streets. How different the quiet and desolate 
 scene, from its recent busy mart of commerce. I met no individual, heard no 
 voices, and had the whole silence and soHtude to myself. I sat upon a heap 
 of ruins near to a warming fire, and indulged in reveries and musings. 1 
 thought of ^'yre of old, "whose merchants were princes, and whose mansions 
 were palaces:' I thought of the quickening influences of commerce wherever 
 they are freely indulged and not ignorantly fettered. I thought then of the 
 unwise system which denied to foreign underwriters, (like the Phoenix Com- 
 pany, of London,) the risk of our preservation, and reserved to tJ^emselves the 
 
14 THE GREAT FIRE OF 1835. 
 
 sole privilege of being responsible for the calamities of their own people. 
 The practical issue is, that the ruin of seventeen millions of property, 
 is a family concern of a ivhole city^ wherein all are mediately or immediately 
 involved. 
 
 " Although I had not seen the actual conflagration which began at Comstock 
 and Andrews' store, on Merchant street, on the night of Wednesday, the 16th 
 of December, and raged through all the next day until Thursday evening, I 
 could still imagine the terrific and appalling picture : — 
 
 ' Could see her flames from lofty mansions rise, 
 And send their eddying columns to the skies ; 
 Where spreading fire makes night a brighter day, 
 Nor skill nor courage can its fury stay — 
 The richest merchandize of eveiy name, 
 • The worth of millions feed the flame, 
 
 ' And one vast ruin meets the aching eye.' 
 
 " In the time of the fire, when dismay and confusion were at their utmost 
 heif'ht, great prices were offered and given for help in any needed form. 
 Twenty dollars were given for a single cart load, and even one hundred dollars 
 was asked and given. One merchant on South street, by the river side, who 
 saw the high extortion on those who had not their own carmen at hand, offered 
 and actually purchased a horse and cart for five hundred dollars, and thereby 
 saved his o'wn property of $80,000 by removal. My friends Clark and Smith, 
 offered, after the fire had consumed their store, one hundred dollars to sundry 
 bystanders, working men, to pull out their iron chest ; it was soon done, and 
 their books and even notes, were all saved, although so charred and injured, 
 as to be necessary to transcribe the books. 
 
 " It might surprise many to learn, that while I and others, travelled to the scene 
 from 10(?miles, that there were numerous persons even in New York city, who 
 never waked or heard of the fire. My own kinsman, Mr. B. up town, heard 
 of some cry of fire about the time of his retiring to bed, but Uttle regarded 
 It ; and he and his wife and two servants, actually slept out the whole night 
 in Bleecker street, without knowing that there had been any tire, and that he 
 had actually lost a large store worth $2500 a year rent. 
 
 " Some others of my friends, near Houston street and Broadway, were at 
 a wedding party, and although they heard of the fire at a distance at nine 
 o'clock, not one of them left^heir entertainment till midnight; and then only 
 one of 'them on his nearer approach homeward, saw or heard enough of the 
 fire to influence him to go on to the place of desolation— there in his gala 
 dress and dancing pumps, he had to set to work earnestly to pack up his store 
 goods near the Exchange, and send them to the Battery ground for safety- 
 he eventually lost $2000. Three of the other guests went home to rest, and 
 never heard of their losses until the next morning, when they found that 
 their stores and all their contents were dissolved in fervent heat. 
 
 " It is the strangest thing to contemplate, that nearly 600 houses of the 
 loftiest and most- expensive construction, should go down to absolute ruins in 
 so short a space of time. One would think that the bare walls might be found 
 standing ; but it was not so. It is said that they build with insufficient width 
 of wall for such large superstructures of four and five stories ; and above all 
 that the cheaper Ume which they have preferred from Maine, Rhode Island, 
 and Albany &c., has been wholly unequal to that which Philadelphia county 
 supplies to its architecture. The granite and marble pillars on which many 
 of the fronts of the houses rested, were wholly unable to sustain the action of 
 fire and water; 2iVidi fractured and rived m such manner, as to be no support 
 to the walls above them. The narrowness of the streets, and the undue ele- 
 vation of the houses, (a sufficient warning to us,) prevented firemen froin act- 
 ine; with effect. These circumstances, while they hindered men from aiding, 
 greatly increased the action of the heat, so that such an intensity of fire has 
 
THE GREAT FIRE OF 1835. 15 
 
 never been surpassed. I saw china stores, where the masses of broken china 
 was vitrified in clusters, zinc and copper, from roofs, was found in the drench- 
 ing form of gushing water, the masses of nails, screws, &c., in iron stores, 
 were partially dissolved, and then cooled in union. I preserved some such 
 fragments, and I also brought away a whole ewer, which had endured all the 
 fire, at the china store of John Greenfield and 'Sons, in Pearl street, close to 
 where a china store was blown up, and caused the arrest of the fire at the 
 head of Coenties shp, on Pearl street. 
 
 "The cause of so much unparallelled havoc, was that of a fierce wind — felt 
 equally all the way to Philadelphia, which was blowing from the north-west 
 during all the night ; and besides this, the weather was too intensely cold, to 
 admit of a due use of the engines and hose. In many places firemen could be 
 seen beating their hose to prevent the formation of ice within them. 
 
 " It was impossible to find firemen reckless enough to ascend ladders, which 
 might be raised to the eves of houses, of four and five stories — and in narrow 
 streets, the water played so high, necessarily fell back upon the people below. 
 In such extremities, men had to stand useless gazers upon the destruction of 
 their property. 
 
 " Seventeen blocks, (squares,) containing houses of the largest and most 
 costly construction, were consumed in one night. What an awful picture of 
 the Great Assize, * when the elements shall melt with fervent heat!' 
 
 '* Explosions were often heard, resulting sometimes purposely from the use 
 of gunpowder, and in otiier cases from the bursting of liquor casks, and from 
 the presence of gunpowder held for sale. These, when they occurred, were 
 subjects of indescribable grandeur and terror — it set every bosom upon the 
 qui vive. 
 
 " How wonderful, that in so much just cause of personal apprehension and 
 danger, only one person should have been wounded, and one other missing. 
 
 " It was somewhat peculiar that the fire travelled so readily to loindward^ so 
 that those who conveyed their goods and stored them for safety in the Mer- 
 chants' Exchange and the old Dutch church, should have had them overtaken, 
 even there, by the consuming element, and wholly burned. The best refuge 
 was found in the Bowling Green and Battery, where marine guards with fixed 
 bayonets, gave them protection. 
 
 "The several streets, after the fire, were seen for several days, choked up 
 with rich merchandizes — all tramped under foot, and almost totally ruined. 
 In short thousands upon thousands of dollars in value, were lying wasted and 
 whelmed in ruin. 
 
 " Wail after wall, were seen or heard tumbling Hke avalanches to the ground, 
 while flames were darting their tongues of fire, and were heard roaring from 
 roofs and windows, along whole streets. At the same time, firemen worn out 
 with over exertion, were still struggling for mastery over the storm of fire, 
 which seemed to revel in its power, and to mock all human skill and prowess. 
 
 " The next day, all the city military were put under requisition, to be ready 
 to protect property exposed, and to aid the civil authorities in the preserva- 
 tion of order and the civil rule. 
 
 *' It was curious to see occasionally, the harvest which occurred to the poor, 
 and to stroUing boys and girls. You could see the rag gatherers, crowding 
 their sacks with scorched fragments of cotton and silk stufts. In one place 
 was the remains of a jeweler's store, in which ragged boys and girls were very 
 busy searching for sundry trinkets. At the china stores, men, women, and 
 children, were engaged raking among broken china and queensware, for small 
 articles unbroken. In one such place, I saw and purchased, as a relic, an 
 ewer in good state.'* 
 
 The most wonderful circumstance respecting this Great Fire was, that it 
 caused scarcely any failureSj and seemed to produce no serious effect upon 
 
16 THE GREAT FIRE OF 1S85. 
 
 either the progress of the city or the finances of the country. The city was 
 under such tremendous headway, that the sudden and total annihilation of 
 eighteen millions of property was hardly felt. Every body was amazed at 
 this. It hugely flattered the nationul vanity. In what other country, asked 
 the elated people, could such a catastrophe occur, without bringing ruin upon 
 all concerned ? 528 houses were consumed. On the 1st of October 1836, 
 167 houses on the burnt district were occupied ; 58 more were finished ; 64 
 more were roofed ; 82 more were in progress, and nearly every trace of the 
 .fire was obHterated. As a very striking proof of the elasticity of things at 
 that time, note the annexed account of sales of real estate by Jas. Bleecker & 
 Sons, Feb. 23, 1836 — at their sales room, 13 Broad street. The real estate 
 of the late Joel Post. 
 
 1 lot on Wall street, corner of Exchange place, 28 feet 6 inches by 63 feet 
 
 6 inches - - - - $66,500 
 
 1 lot on Wall street, adjoining above, 19 feet by 28 feet, . - 55,750 
 1 lot on Exchange street, 30 feet 5 inches by 54 feet, - - 46,500 
 
 1 lot on Exchange street, 29 feet 7 inches by 52 feet 9 inches, - 41,000 
 1 lot on Exchange street, 20 feet 4 inches by 45 feet deep, running to 
 
 a point, 18,100 
 
 1 lot corner of William street and Exchange place, 25 feet 11 inches 
 
 by 52 feet 5 inches, -.-_...._ 46,500 
 
 1 lot next but one adjoining, 39 feet 2 inches by 40 feet, - - 38,750 
 1 lot on William street, next to corner of Wall street, 17 feet 2 inches 
 
 front, 11 feet rear, and 60 feet deep, .... 25,000 
 
 1 lot on Exchange Place, 32 feet 9 inches front by 55 feet deep, 36,500 
 
 1 lot adjoining, 26 feet 2 inches by 66 feet, .... 28,250 
 
 1 lot in rear on Merchant street, 23 feet 6 inches by 52 fact, 24,250 
 
 1 lot fronting on Exchange Place and Merchant street, 20 feet 5 inches 
 
 by 91 feet, 45,500 
 
 1 lot 20 feet 6 inches-23 feet, by 88 feet, .... 47,500 
 
 1 lot adjoining, 20 feet 6 inches-24 feet, by 75 feet, - - 38,500 
 
 1 lot 20 feet 6 inches-24 feet, by 65 feet, 37,750 
 
 1 lot 20 feet 5 inches on Exchange Place, 24 feet on Merchant street, 
 
 and 60 feet deep, 44,250 
 
 1 lot corner of Exchange street and Pearl street, 19 feet 11 inches 
 
 . front, by 65 feet, 32,500 
 
 1 lot on Pearl street, 20 feet by 67 feet, 29,500 
 
 1 lot rear on Exchange Place, 28 feet by 64 feet - - . 33,000 
 
 1 lot corner Exchange Place and Merchant street, 28 feet 7 inches 
 
 front, 38 feet 7 inches rear, by 64 feet, - . - - 35,500 
 
 $771,100 
 
 THE SHORT CROPS OF 1835 AND 1836. 
 
 Excessive drouth followed by excessive rains, a backward spring and 
 early frosts, did such damage to the crops, that the country did not produce 
 food enough for its subsistence during the winters. As early as the month of 
 October 1835, wheat began to be imported from foreign countries, and con- 
 tinued to be imported until late in the spring of 1837. Ink) the single port 
 of New York, there were imported in October 1835, 18,200 bushels of wheat, 
 
8,600 bushels 
 
 17,200 
 
 a 
 
 68,400 
 
 a 
 
 109,800 
 
 (( 
 
 120,100 
 
 u 
 
 THE SPECIE CIRCULAR OF 1836. 11 
 
 In February 1836, 36,160 bushels. In August 1836 
 
 " March " 42,800 " " September '' 
 
 *' April " 39,200 " " October " 
 
 " May *' 31,100 " " Novjember " 
 
 " June " 16,600 " " December " 
 
 *' July " 8,000 " 
 
 Total import for 1836, 493,100 
 
 In January 1837 132,600 bushels.In March 1837 413,300 bushels. 
 
 " February " 179,800 " To April 19, " 135,300 " 
 
 Total import to April 19th, 1837, 1,369,300 
 
 During this period the price of flour ranged from eight dollars per barrel 
 to sixteen, which led in the winter of 1837 to the flour riots in the city of 
 New York, which will be described on a subsequent page. 
 
 THE SPECIE CIRCULAR OF JULY 1836. 
 This was simply an order from the treasury that public lands must be paid 
 for, henceforward, in specie. Speculation in land had become a mania, sim- 
 ilar to that which has prevailed during the last ten years in stock gambling. 
 That is -to say, milHons of acres were sold at prices utterly fictitious, and paid 
 for in values utterly fictitious. There was no longer any reality in the busi- 
 ness. The effect of the specie circular was to restore it to reality, to prick 
 the bubble, and, for a time to paralyze the busine3s of the coimtry. The 
 specie circular was in no proper sense the cause of the great crash of 1837, 
 but it certainly hastened the catastrophe. Its particular effects upon the 
 finances of the nation, were ably shown at the time by Nicholas Biddle, in a 
 passage which will be quoted in another place. Biddle, like most of the finan- 
 ciers threw all the blame upon the pin which pricked the bubble, instead 
 of the gas which inflated it. The financiers of 1857 are doing the same thing, 
 and so will financiers continue to do, as long as we are subject to revulsions. 
 
 THE BEGINNING OF THE PRESSURE. 
 
 The crash of 1837 was fourteen months incoming on! As early as March 
 1836, money began to tighten at most of the the leading markets of the 
 country, yet the country seemed on the topmost pinnacle of prosperity. We 
 read in the papers of bank stock selling at 80 per cent, premium ; of railroads 
 begun in every direction ; of universal employment for the people ; of univer- 
 sal high prices for produce ; of advancing wages ; of new manufactories ; of 
 new inventions ; of an overflowing spring emigration ; of the marvellous 
 growth of western cities ; of the great prosperity of the planting interests ; 
 and of immense importations. In the midst of all this show of success and 
 advancement, the pressure in the money market begins. It excited little re- 
 mark at the time, and no one dreamt of its continuance. Some papers attrib- 
 uted it to the delay of Congress in voting the annual appropriations, and call- 
 
18 THE PRESSURE OF 183Y. 
 
 ed upon members to attend to their duties, and relieve the money market 
 by putting the public money into circulation. There was scarcely a whisper 
 that the pressure was any thing but temporary and accidental. 
 
 CHAPTER lY. 
 
 THE PROGRESS OF THE PRESSURE. 
 
 By very slow degrees the pressure increased. The best way of exhibiting 
 its gradual progress, and the little alarm it at first excited, wiU be to copy a 
 few paragraphs from the Press of the years 1836 and 1837. 
 
 From BicknelVs (Phila.) Reporter of March 20th^ 1836. 
 
 " Money. — Money continues scarce — very scarce. On Saturday last, good 
 paper was offered at one per cent, per month. The market was somewhat 
 easier yesterday ; very Httle, however. A change for the better must soon 
 take place. The New Yorkers and Bostonians who have been forwarding their 
 stocks to our market for the last fortnight, and have thus been absorbing our 
 capital, will not be permitted to do so any longer with impunity. Our capital- 
 ists have commenced retahating on them, and the New York market will soon 
 be, if it is not already, in as bad a condition as ours. Some think that this will 
 not relieve us — it cannot do otherwise, however." (No hint of the true cause.) 
 
 From the Baltimore Gazette^ April lOth^ 1836. 
 "The great and apparently unaccountable delay of Congress in making the 
 necessary appropriations for the payment of the current expenses of govern- 
 ment, and more especially to pay the bills drawn by the distant agents and 
 officers of the government, some of which, it is reported, have been protested 
 — has caused very general, and, we fear, too just complaint. Some explanation 
 is certainly due from the representatives to their constituencies for this omis- 
 sion to pay just claims, when the treasury is full to overflowing, and money so 
 scarce as to cause general embarrassment to almost every class of business 
 men." (Equally in the dark.) 
 
 From Niles' Register^ April 16^A, 1836. 
 "Money seems to be very scarce, though ^aper ought to be plentiful, seeing 
 that in the last six months there have been incorporated in the United States 
 considerably more ih^Ln fifty millions of banking capital, and we have nearly 
 fifty-five millions of surplus in the deposite banks. * * * The responsibili- 
 ties of banks in the United States are six or eight times greater than their 
 means, though all the specie in the land were gathered into their vaults — and 
 there must be a scrabble for it ! * * * The unbounded extent of credit 
 which we have latterly had has arisen from the fact that there was no demand 
 for specie. It remained in the banks, only as ballast stones in the hold of a 
 ship. But let the exchange on England a^-ance one or two per cent, and 
 eleven-twelfths of all our banks will be deprived of their means of accommoda- 
 tion — being also hard put to it to save themselves. A general war in Europe 
 will bring jibout this state of things." (The Specie Circular did it instead. Mr. 
 Niles understood the matter.) 
 
 From Niks' Register of April 23c?, 1836. 
 *'It is stated from New York that bills on England, owing to the scarcity of 
 
THE PRESSURE OF 1837. 19 
 
 money, are at five per cent, advance, that is, three and a half per cent, below 
 the real par. * * * We have heard that the United States Bank has been 
 required to reduce its circulation between five and six millions within a few 
 months — and, from the doings in Congress, it seems resolved that it shall sud- 
 denly do more. The bank can — ^but are the geople able to bear it ?" 
 
 Frcym the Boston Daily Advertiser^ April 20th, 1836. 
 
 " There has evidently been a great falling off in the amount of business 
 transactions for three or four weeks past, solely on account of the scarcity of 
 money and the difficulty with which negotiations are effected. The lowest 
 street rates for the best notes has been, during the present week, one per cent, 
 per month, and no doubt much has been done at a higher rate. So long as 
 this pressure upon the very vitals of trade continues, a comparatively meagre 
 detail of weekly operations in merchandize generally must be expected. 
 
 From Mies' Register, May lUh, 1836. 
 
 *' There is an awful pressure for money in most of the cities. The shavers 
 exact their pounds of flesh." (Yet, at the same date, U. S. bank stock was 
 quoted at 125^. The drouth was killing the early crops and injuring grain.) 
 
 The congressional appropriations relieve the pressure in the money market 
 for a few weeks (during which the scorched crops were soaked with continual 
 rains,) when the business world were astounded by the failure and arrest of 
 Benjamin Rathbun, of Buffalo, N. Y. 
 
 From Mies* Register, August \Zth, 1836. 
 
 '' Great excitement has been created in Buffalo by the failure of Benj. Rath- 
 bun, one of the greatest speculators and business men in that region of enter- 
 prise. Rathbun was an extensive property holder, owned a number -bf stores, 
 employed 1200 workmen and 300 teams, and was engaged in^the erection of 
 a large number of buildings and a splendid exchange at Buffalo, And a large 
 hotel at Niagara Falls. His liabihties are estimated at nearly $6,000,000, and 
 his property at $2,600,000. But the most extraordinary fact developed is, 
 that, of the vast amount due by him, upwards of $1,500,000 is of paper with 
 forged endorsements, which has been shaved at ruinous rates. * * * it 
 is rumored that several banks will suffer severely by this extraordinary event, 
 and it is certain that it will fall heavily upon individuals. But the recuperative 
 energies of Buffalo will soon overcome the shock she has received, and the 
 'speculations' of Rathbun be only remembered as a caution for the future." 
 
 Money was tight during the autumn, and even tighter as winter drew on ; 
 the more timid began to be alarmed, and *a considerable number of men were 
 thrown out of employment in consequence of the stopping of manufactories. 
 But the country at large was still hopeful, and the failures were few. 
 
 From the Providence Courier of December 1st, 1836. 
 
 " The following transaction, which took place in Boston during the present 
 week, will give some idea of the straits to which even the rich are reduced. 
 A rich man had borrowed ten thousand dollars of an institution, which circum- 
 stances required he should pay on a certain day. He gave his notes to one of 
 our banks for six months on interest, and obtained notes of the bank. He 
 then paid a broker one per cent, to get the money for him, giving these notes 
 as security. The broker obtained the money at two and a half per cent, a 
 month for six months. Thus eighteen hundred dollars were paid for the ten 
 thousand for tho six months. How many can afford such sacrifices long?" 
 
20 THE FLOUR RIOTS. 
 
 From tJie iV. Y. Journal of Commerce^ December Ith^ 1836. 
 " Notwithstanding the continuance of the pressure, Saturday passed off with- 
 out any commercial disaster. The payments of merchants on that day are said 
 to have been eight milHons of dollars, and not a note lay over. The opinion 
 is gaining ground that the crisis is past, and that the money market will short- 
 ly be easier. We hope so. On Friday, in Philadelphia, the United States 
 Bank discounted $900,000, and the Girard Bank $300,000. Things are becom- 
 ing easier there." 
 
 From the Journal oj Commerce^ January \st^ 183Y. 
 " On Saturday several of the banks refused to receive merchants' checks in 
 deposit. Immense sums which are usually liquidated by entries on the books 
 of the bank had to be drawn out in bills. The consequence was that some of 
 the banks were exhausted of bills, although a special effort was made to keep 
 up a supply by signing them as fast as possible. After all, in a good many 
 cases, the teller was oblige^ to give due bills for the occasion, which were of 
 necessity passed for money and deposited at other banks. The incident is of 
 no consequence, except as illustrating the importance of that department of 
 the currency called checks. They save the use of a vast amount of bank notes, 
 and lessen immensely the dangers of bank transactions. The refusal to take 
 checks on deposite as usual put the last strain upon the mercantile strength of 
 the city, as it prevented all fiction in payments, and compelled every man to 
 furnish real cash. We are happy to state that so far as we know, every man 
 furnished the cash, and every engagement was fulfilled. The merchants have 
 now been proved in all sorts of ways, and by quadruple power, and stood the 
 test. We hope they may soon be relieved from further testing of their 
 strength." 
 
 THE NEW YORK FLOUR RIOTS OF 1837. 
 In February, 1831, flour reached what was then considered the enormous 
 price of twelve dollars a barrel, and large numbers of those whom the pressure 
 of the times had deprived of work, were distressed in the extreme, and were 
 in want of the necessaries of life. The rumor was started that the high price 
 of flour was caused by a combination of dealers to hold back an adequate sup- 
 ply from market, and a meeting was called by some arrant demagogues to de- 
 nounce the alleged combination. What followed was thus related by the 
 Commercial Advertiser oi Febm&Tj 14th, 1837 : 
 
 At four o'clock a concourse of several thousands had convened in front of 
 the city hall, composed, as we are assured, of the very canaille of the city, 
 and combining within itself all the elements of outrage, riot and revolution. 
 Moses Jaques was elected as the fitting chairman of such a meeting. But 
 order was not the presiding genius on the occasion, and the meeting was di- 
 vided into various groups, each of which was harangued by some chosen dem- 
 agogue, after his own fashion and on his own account. 
 
 Conspicuous among the orators was Alexander Ming, Jr., a patriot who has 
 several times been honored as one of the candidates for the office of register 
 in this city. Ilis discourse on the present occasion, is represented as having 
 been less exciting and inflammatory than were those of his fellow orators, as 
 he confined himself to the currency question — enforcing the doctrines of his 
 colleague of reforms Colonel Benton, and advising people to discard bank 
 notes, and receive nothing but the precious metals. At the close of his 
 harangue, iMing introduced a set of resolutions, of the character of which, we 
 are no further informed than that one of them proposed a memorial to the 
 
TEE FLOUR RIOTS. 21 
 
 legislature, praying a prohibition of all bank notes under one hundred dollars. 
 The illustrious Bentonian patriot was then uplifted upon the shoulders of the 
 sovereign mob, and borne proudly aloft over to Tammany Hall. 
 
 There were other speakers, however, who came directly to the business of 
 the meeting, and in the most exciting manner/'4enounced the landlords and 
 the holders of flour, for the prices of rents and provision s. One of these 
 orators, in the course of his address, after working upon the passions of his 
 audience, until they were fitted for the work of spoil and outrage, is reported 
 to have expressly directed the popular vengeance against Mr. Eli Hart, who 
 is one of our most extensive flour dealers on commission. " Fellow citizens !" 
 he exclaimed, " Mr. Ilart has now 53,000 barrels of flour in his store ; let us 
 go and offer him eight dollars a barrel for his flour, and if he does not take 
 it"_liere some person touched the orator on the shoulder, and he suddenly 
 lowered his voice and finished his sentence by saying, " we shall depart from 
 him in peace." The hint was sufficient— and a large body of the meetmg 
 moved off in the direction of Mr. Hart's store in Washington between Dey and 
 Courtlandt streets. The store is a very large brick building, having three 
 wide but strong iron doors upon the street. Being apprised of the approach 
 of the mob, the clerks secured the doors and windows, but not until the 
 middle door had been forced and some twenty or thirty barrels of flour or 
 more, rolled into the street, and the heads stove in. At this point of time 
 Mr. Hart himself arrived on the ground with a posse of officers from the 
 police. The officers were assailed by a portion of the mob in Dey street, their 
 staves wrested from them and shivered to pieces. The number of the mob 
 not being large at this time, the officers succeeded in entering the store, and 
 for a short time interrupted the work of destruction. 
 
 The mayor next arrived at the scene of waste and riot, and attempted to 
 remonstraf^ with the infatuated multitude on the folly of their conduct— but 
 to no purpose ; their numbers were rapidly increasing, and his honor was as- 
 sailed with missiles of all sorts at hand, and with such fury that he was com- 
 pelled to retire. Large reinforcements of the rioters having arrived, the offi- 
 cers were driven from the field, and the store carried by assault— the first iron 
 door torn from its hinges, being used as a battering ram against the others. 
 The destructives at once rushed in, and the windows and doors of the lofts 
 were broken open — and now again commenced the work of destruction. 
 
 " Barrels of flour by dozens, fifties and hundreds were tumbled into the 
 street from the doors, and thrown in rapid succession from the windows, and 
 the heads of those which did not break in faUing were instantly staved in. 
 Intermingled with the flour, were sacks of wheat by the hundred, which were 
 cast into the street and their contents thrown upon the pavement. About 
 one thousand bushels of wheat, and four or five hundred barrels of flour, were 
 thus wantonly and foohshly, as well as wickedly destroyed. The most active 
 of the destructionists were foreigners — indeed the greater part of the assem- 
 blage were of exotic origin, but there were probably five hundred or a thou- 
 sand others standing by and abetting their incendiary labors. Amidst the 
 faUing and bursting of the barrels and sacks of wheat, numbers of women 
 were engaged, like the crones who strip the dead in a battle, filling the boxes 
 and baskets with which they were provided, and their aprons with flour, and 
 making off with it. One of the destructives— a boy named James Roach- 
 was seen upon one of the upper window sills, throwing barrel after barrel 
 into the street, and crving out with every throw, ' here goes flour at eight 
 dollai^ a barrel !' Early in the assault Mr. Hart's counting room was entered, 
 his books and papers siezed and scattered to the wind. And herein probably 
 consists his greatest loss. 
 
 "Night had now closed upon the scene ; but the work qf destruction did not 
 cease until strong bodies of the police arrived, followed soon afterward by 
 
/ 
 
 22 THE GREAT CRASH OF ISSY. 
 
 detachments of troops. The store was then cleared by justices Lownds and 
 Bloodgood, and several of the rioters were arrested and despatched to Bride- 
 well under charge of Bowyer of the poUce. On his way to the prison, he 
 and his assistants were assailed, his coat torn from his back, and several of 
 the prisoners were rescued. Several more, however, were afterwards cap- 
 tured and secured. 
 
 " Before the close of the proceedings at Hart's store, however, the cry of 
 * Meech,' was raised — whereupon a detachment of the rioters crossed over 
 to Coenties slip, for the purpose of attacking the establishment of Meech & Co., 
 but the store of S. H. Herrick & Co, coming first in their way, they com- 
 menced an attack upon that. The windows were first smashed in with a 
 shower of brickbats, and the doors immediately afterward broken. Some 
 twenty or thirty barrels of flour were then rolled into the street, and the heads 
 of ten or a dozen knocked in. 
 
 " The number of rioters engaged in this work was comparatively small, and 
 they soon desisted from their labors, probably from an intimation that a 
 strong body of the poHce were on their way thither. Another account is, 
 that they were induced to desist from the work of mischief, by an assurance 
 from the owner, that if they would spare the flour, he would give it all to the 
 poor to-day. Be this, however, as it may, the ofiicers were promptly on the 
 spot, and by the aid of the citizens who collected rapidly, the wretched rabble 
 was dispersed — some thirty or forty of them having been taken and secured 
 at the two points of action. Unfortunately, however, the ringleaders escaped, 
 almost, if not quite, to a man." 
 
 CHAPTER V. 
 
 THE GREAT CRASH AT LAST. 
 
 The South and Southwest were the first to give way. The Cotton interest 
 was prostrate. The inflation of the last three years had stimulated the pro- 
 duction of cotton to an enormous extent, and the inflation in England, by 
 stimulating manufactures, had kept up the price of the great staple. In the 
 spring of 1837, came the re-action. Manufactures languished. The immense 
 crop of 183G could not be sold. Bankers and brokers who had made large 
 advances upon that crop — advances proportioned to the recent high price of 
 the article — were the first victims ; and in their fall they bore down with them 
 the entire edifice of American credit. About the 15th of March, 1837, the 
 news reached New York, that the great house of Herman, Briggs & Co., of 
 New Orleans, cotton factors, had failed for eight millions of dollars. Before 
 showing the effect of this news upon New York, we may mention, that within 
 a month after the failure of Herman, Briggs & Co., the whole South-west, as 
 though by a simultaneous and irresistible impulse, became bankrupt. In 
 Mobile, nine-tentlis of all the mercantile firms failed. In New Orleans, every 
 house of importance went down ; one concern owing fifteen millions of dol- 
 lars ! The business of shipping cotton and sugar was so completely paralysed' 
 
THE CRASH IN NEW-YORK. 23 
 
 that days passed without a single transaction of any kind occurring. In a 
 word, the great region of country depending for its resources upon the raising 
 of cotton and sugar, was, in the space of less than four weeks, incapacitated 
 from paying the vast suras which it owed the ijorthern cities, or any consider- 
 able part of the same. In a business sense, for the time being, the South was 
 prostrate and helpless ! Cotton fell, in a few days, from seventeen cents to 
 ten cents ; sugar in about the same proportion, and tobacco was unsaleable at 
 any price. 
 
 THE CRASH IN NEW YORK. 
 
 The immediate effect of the news in New York of the great failure at 
 New Orleans was to cause the " suspension " of the then celebrated and im- 
 portant house of J. L. & S. Joseph & Co., who were under acceptances from 
 New Orleans to the amount of several millions of dollars. It was given out 
 (as it always is) that the suspension would be but temporary, and that all 
 debts would be paid with interest. It was even said that the house would re> 
 sume on the following Monday. The suspension, however, turned out to be a 
 most complete and disastrous failure. The house had been eaten hollow by 
 discounters and shavers, and in a few days after the suspension, the furniture 
 of the leading partner was sold at public auction for the benefit of the credi- 
 tors. The failure of this house fell upon the town and country like a thunder- 
 bolt, and from that day the grand crash began. No one yet, however, began 
 to foresee the full extent of the danger, and the commercial papers still flatter- 
 ed their readers from day to day that the crisis had passed^ and that in a few 
 days all would be well again. 
 
 Note the following extracts from the Journal of Commerce of March 27, 
 188Y (a few days after the failure of the Joseph's), and from BicknelVs Reproter 
 of March 28th:— 
 
 Fronn the Journal of Commerce^ March 27, 1887. 
 
 " \% cannot be denied that people were tremrendously scared last week, and 
 it cannot be denied that after all, they were not much hurt. Only two or 
 three houses could not make notes or draw bills good enough to appease pub- 
 lic anxiety — ^yet almost every note which fell due proved good. * * * 
 Unless the screws can be turned down harder, we may as well give over look- 
 ing for the grand crash which has been so long waited for, and which it was 
 thought must certainly have come last week. The reason why the merchants 
 do not fail is, first, they do not choose to, and, second, they are not obliged 
 to. They are rich, that is the secret of the wonder, and we cannot be mis- 
 taken in believing that this fact having been so abundantly proved, confidence 
 will be resumed." 
 
 From BicknelVs {Phila.) Reporter of March 28, 1837. 
 " The credit of Philadelphia will not suffer in the slightest degree by the 
 recent disasters There is no city in the Union that contains a larger body 
 of sounder or more upright commercial men, or a greater amount of intrinsic 
 wealth. Our banks are all perfectly safe^ pursuing the even tenor of their 
 way within their means ; and the little storm that we have alluded to will 
 only serve to render the enterprising a little more cautious, and, in the end, 
 to purify the atmosphere of the money market." 
 
24 THE CRASH IN NEW-YORK. 
 
 Just so^ the commercial papers of 1857 have been talking all through the 
 present revulsion. Just so, class papers will always flatter and delude the 
 class which supports them. In ISS^Z, as in 1857, the New York Herald was 
 the first of the New York papers to get an inkhng of the real nature of the 
 crisis. It told them. as it tells now, the disagreeable truth about the matter, 
 instead of the pleasant lie. 
 
 The merchants of New York, when the panic of 1837 was getting frantic, 
 sent a deputation to Nicholas Biddle, President of the United States Bank, 
 (then a state institution of Pennsylvania, but retaining, in common parlance, 
 its ancient name,) asking the help of his renowned financial genius to get them 
 out of their difficulties. Mr. Biddle, who was still as completely in the dark 
 respecting the nature and extent of those difficulties as the humblest scribe 
 in his bank, replied, in effect, that, owing to certain accidental and temporary 
 causes, private credit, for the moment, was impaired, and, in consequence, the 
 whole system of foreign and domestic exchanges was deranged. " For this," 
 continued the financier, " the appropriate remedy seems to be, to substitute, 
 for the private credit of individuals, the moi'e known and established credit of 
 the bank, until pubhc confidence in private stability has time to revive. To 
 the foreign exchanges I would apply that restorative by issuing the engage- 
 ments of the bank, payable in London, Paris and Amsterdam, to be remitted 
 in lieu of private bills. These will be ready for the next packet, and they 
 will enable the country to make without injury an early provision for the ad- 
 justment of foreign exchanges by the natural operation of remitting its pro- 
 duce and its coin. A similar operation I shall recommend to the board in 
 respect to the domestic exchanges, by an enlarged and immediate purchase 
 of bills of exchange on the distant sections of the Union." 
 
 These smooth and plausible words, aided by the operations proposed, gave ', 
 relief to the money market for the space of four days ! 
 
 To show still further how utterly ignorant financial and commercial writers 
 sometimes are of the real nature of finance and business, we copy another 
 short passage from the Journal of Commerce of the fourth day after Mr. 
 Magician Biddle had waved his healing wand over a paralyzed metropolis. 
 
 From the Journal of Commerce, April Zd, 1837. 
 
 *' The past week will long be remembered by our merchants as. a season of 
 trial and difficulty, such as has not before been experienced for many years. 
 It will be remembered also, we trust, as the cribis of the great financial 
 troubles which have been gathering for more than a year past from the com- 
 bined influence of speculation, the surplus revenue, bad government, etc. The 
 first three days of the week were indeed gloomy ; a number of failures occur- 
 red, chiefly, however, of houses essentially sound, but which were unable to 
 sustain themselves under the tremendous money pressure which existed, and 
 what was worse than all, in some of its bearings, Confidence, that essential 
 element of credit, appeared to be entirely at an end. It was a glorious time 
 for panic-makers, croakers, and assassins of credit, and well did they improve 
 the opportunity afforded them. We could mention a dozen of our largest 
 and best houses, who were reported among the fallen, but who still survive 
 
THE CRASH IN NEW-YORK. ^ ^1 25 
 
 unharmed. The temporary suspension of payments by Messrs. E. M. Morgan 
 & Co., who were agents for 20 or 80 country banks, gave opportunity to the 
 enemies of such institutions to propagate suspicions concerning them ; and 
 all of these troubles were aggravated, we will ^t say wantonly aggravated, 
 by a portion of the press. 
 
 " Tihus things were proceeding, when, by a concerted movement, between 
 the U. S. Bank and our local institutions, measures were adopted for the re- 
 lief of the community ; and from that moment the state of the money market 
 has been evidently improving. During the last three days, there has not 
 been a single failure. Stocks which had been rapidly declining began to ral- 
 ly, and confidence, though still scarce, was perceptibly gaining ground. We 
 feel assured that these encouraging indications will continue and increase 
 until the money market shall recover* its Uisual healthy condition." (And so 
 on, in the same strain, for half a column.) 
 
 r Yet, in^two days^ the market was down again to a lower point than ever, 
 and a deeper glgom overspread the city than was ever known before. Read 
 the following : — 
 
 Fromthe NewYorh Transcript^ April 6, 1837. 
 
 " Yesterday was a day that tried men's souls ; the money market was tighter 
 than ever. For the first day or two it has been more so than at any time dur- 
 ing the pressure, and should it continue to become more so, things will be 
 brought to a focus pretty quickly, for our merchants will become discouraged 
 and stop when they are solvent. Yesterday there were several very heavy 
 failures, principally among our dry goods people, which class of merchants 
 were considered the cream of New York, and have stood the high price ol 
 money nobly, and so long, that it was thought they would weather the point, 
 and pass the gale unharmed. The payments of the New Yord dry goods 
 jobbing houses were very heavy during the months of April and May, and 
 the small return of money from the South, with the tremendous quantity of \ 
 protested paper, had driven them to despair and eventually to fail. It is es- | 
 timated that the Southern merchants do not pay Jive cents on the dollar of which '\ 
 they owe in New York ; and some of our large Southern houses have, for the 
 last two or three months, paid both sides of their note book, which speaks 
 volumes in their favor." \ • 
 
 Through the whole month of April, the failures continued, and things grew 
 worse and worse. Toward the close of the month, there was one transient 
 gleam of sunshine afforded by the arrival of favorable news from England. 
 At that time the three great American houses in England were Thomas Wil- 
 son & Sons, Thomas Wilder & Co., and Timothy Wiggins, (the " Three W's.") 
 The news was, that the Bank of England had agreed to assist, those houses 
 to sustain the awful pressure upon them to the extent of £500,000, and that 
 the financial pressure in England seemed to be relieved. For one day the city 
 feebly smiled ; though on that day, many thousand laborers petitioned the 
 Common Council for work, alleging thatiheir families were in want of food. ^ 
 
 About the 25th of April, the merchants of New York, in desperation, held 
 a meeting at the Masonic Hall, and resolved to send a committee of " not less 
 than fifty," to Washington, to wait on the Presiden.t,and urge the immediate 
 rescinding of the " specie circular" as the only measure of saving the country 
 from " universal bankruptcy." *' The meeting," said the JV. Y. American^ 
 *' was a remarkable one, for the vast number assembled — the entire decorum of 
 
26 THE CRASH IN NEW-YORK. 
 
 the proceedings — and, especially, from the deep, though subdued, and res- 
 trained excitement, which evidently pervaded the mighty mass. It was a 
 spectacle that could not be looked upon without emotion, that of many thou- 
 sands of men, trembling as it were on the brink of ruin, owing to the mea- 
 sures, as they verily believe, of their own government, which should be their 
 friend, instead of their oppressor — and yet meeting with deliberation and 
 calmness, listening to a narrative of their wrongs, and the causes thereof ; 
 adopting such resolutions as were deemed judicious, and then quietly separ- 
 ating to abide the result of their firm but respectful remonstrances." 
 
 The deputation, reduced to fifteen, repq^ired to Washington, and sought an 
 interview with the President. The wily and pohtic Van Buren refused to con- 
 fer with them except in writing); and accordingly in entering the " presence," 
 they merely read a statement of their case, and the petition of which they 
 were the bearers. Mr. Van Buren, to his honor, his immortal honor, stood 
 firm to his principles, refused to rescind the specie circular, and thus kept the 
 federal government,- for ever, separate from the financial institutions of the 
 people — which was the great gain to the nation of the revulsion of 1837, and 
 it was worth the price ! ! ! 
 
 No sooner was this news known than the pressure resolved itself into mere 
 mad and blind panic. Tlie bottom was out. 
 
 Here is a brief record of some of the events of the first few days of May, 
 ISST. 
 
 May 4. — John Fleming, President of the Merchants' Bank, fell dead from 
 
 excessive anxiety with regard to the affairs of the bank. A run set in on all 
 
 the banks. w^ 
 
 May 5th. — Merchants failed by whole blocks. " It is in vain to disguise," 
 
 said the iV Y. American^ " that the whole frame of society is out of joint." 
 
 / May 6th. — The failures worse and worse. U. S. Bank Stock, for the first 
 
 ' time in twenty years, fell below par. It was quoted to-day at 98 ; not a stock 
 
 in the market brought par. 
 \ May 'Zth. — The Dry Dock Bank, after a hard run, stopped payment. 
 
 May 8th. — Steady drain on the banks. Failures too numerous to chronicle. 
 No bank stock at par, but a few shares of Utica rail road sold at 102. 
 , May 9th. — Furious run on all the banks — depositors and bill holders min- 
 
 gling in one indiscriminate mass, all desperate to get their money. N. F 
 American said : " The banks are all safe, as the run is ridiculous." Tliat very 
 evening^ a meeting of bank officers was held, at which it was resolved to sus- 
 pend specie payments the next morning. Three banks opposed the measure, 
 namely, the Merchants', the Manhattah, and the Bank of America ; but the 
 ' next morning, they felt compelled to suspend. 
 
 May 10. — The suspension announced. The city drew a long breath, and 
 felt relieved. At noon, a n>eeting of merchants was held at the Exchange to 
 sustain the banks. President, James Poorman ; Vice Presidents, Nathaniel 
 Prime, Gideon Lee, David Leavitt, P. (Gr. Stuyvcsant, Girtain C. Verplanck, 
 William B. Astor, Urenddent Phelps, Kobort T.onnore, Sto|)hon Whitney, C. 
 
THE CRASH IN NEW-YORK. 2*7 
 
 H. Russell, Benjamin Birdsall, Joseph Defew, Andrew Lockwood, Philetus H. 
 Woodruff, Samuel Ward ; Secretaries, John H. Stephens, Richard M. Blatch- 
 ford, W. H. Aspinwall. The resolutions were moved by James G. King, and 
 seconded by Nathaniel Prime. 
 
 May 11th. — Chaos, bewilderment, despondency and lamentation. Three 
 hundred firms in the city had failed. 
 
 The following table shows that the suspension of specie payments through- 
 out the country proceeded as rapidly as the mail bore the news of the sus- 
 pension in New York : 
 
 PROGRESS OF BANK SUSPENSION OF ISSt. 
 Planter's and Agricultural Banks, Natchez; - , - - - May 4 
 
 State Bank at Montgomery, Ala., "9 
 
 New York City Banks, '* 10 
 
 Albany, Hartford, New Haven, Philadelphia, Providence, and Balti- 
 more, "11 
 
 Mobile and Boston, "12 
 
 New Orleans (6 Banks), - - - "13 
 
 Washington, D. C, "15 
 
 Montreal, "16 
 
 Charleston, Cincinnati, and Quebec, - -- - - - -"lY 
 
 State Bank of North Carolina, ------- "18 
 
 Savannah and Augusta, "19 
 
 In the crash of 183Y, stocks do not appear to have suffered the extreme 
 fluctuations which they have experienced in IBS'/. Taking the stock of the 
 United States Bank as a specimen, we present the following : 
 
 Prices of the IT. S. Bank Stock during the crash of 1837. 
 
 January 
 
 6th, 
 
 March 
 
 19th, 
 
 (( 
 
 29th, 
 
 May 
 
 2d, 
 
 
 4th, 
 
 
 5th, 
 
 
 6th, 
 
 
 8th, 
 
 
 9th, 
 
 116 
 
 May 
 
 11th, 
 
 103 (UticaR. R. 113.) 
 
 119 
 
 (( 
 
 12th, 
 
 104 
 
 118 
 
 u 
 
 13th, 
 
 110 
 
 111 
 
 u 
 
 15th, 
 
 110 
 
 108 
 
 .( 
 
 18th, 
 
 109J 
 
 102 
 
 a 
 
 19th, 
 
 111 
 
 98 
 
 C( 
 
 23d, 
 
 lOH 
 
 96 
 
 a 
 
 26th, 
 
 103 
 
 96 
 
 a 
 
 31st, 
 
 101 
 
 100 
 
 Nov. 24th, 
 
 121 
 
 " 10th, (suspension,) 100 
 
 CONTRACTION OF DISCOUNTS AND CIRCULATION, 
 The following statement was furnished by the Bank Commissioners for the 
 purpose of showing the general condition of the banks in May, as compared 
 with their condition on the 1st of January, 1837 ; 
 
28 HARD CASH AT THE CUSTOM HOUSE. 
 
 Eighteen New York City Banks. 
 
 1st January. 4th May. 
 
 Loans and Discounts, - - - - 36,442,000 35,685,000 
 
 Specie, 3,854,000 2,596,000 
 
 Circulation, 8,155,000 4,931,000 
 
 Individual Deposites, - - . - 11,180,000 9,536,000 
 
 United States " ... - 7,176,000 3,800,000 
 
 Sixty-Three Country Banks. 
 
 1st January. 4tli May. '"'} 
 
 Loans and Discounts, . - - - 26,979,000 26,822,000 
 
 Specie, 1,459,000 1,100,000 
 
 Circulation, 12,461,000 9,601,000 
 
 Thus, the City banks had reduced their discounts about $800,000, and their 
 circidation three millions and a quarter I 
 
 HARD CASH AT THE CUSTOM HOUSE. 
 The government having decreed that nothing but specie should be received 
 at the Custom House, the merchants were so extremely inconvenienced that 
 the Collector, Samuel Swartwout, went to Washington to endeavor to obtain 
 some mitigation of the difficulty. On his return, a meeting of merchants con- 
 vened to hear his report. The New York American says : — 
 
 " A meeting of merchants, convened to hear the report of the Collector on 
 his return from "Washington, was held at one o'clock at the Exchange. Mr. 
 Swartwout, on presenting himself, was loudly cheered. He stated, that im- 
 mediately on receiving the order requiring specie payments, on Saturday, 
 convinced of the impractibility of enforcing it, he started for Washington to 
 represent the case to the Government. 
 
 " The Secretary and President both expressed great sympathy with the mer- 
 chants, but the former exhibited the law, which forbade, as he said, any other 
 course. No order, other than that given, could be issued — nor could that be 
 withdrawn. On a suggestion from the Collector, that permission might be 
 given to delay acting on that order, it was replied that such permission would 
 virtually be an infringement of the law, but that in the meantime, the Execu- 
 tive would seek to devise any means which, in addition to an early'call of 
 Congress, might tend to alleviate the sufferings of the country. Mr. S. then 
 added, that as no discretion could be exercised by the Department at Wash- 
 ington, nor authorized in the Collector, he had determined to throw himself 
 on the merchants, on Congress, and on his country, for his justification in con- 
 tinuing to take, until after the meeting of Congress, current notes in payment 
 of duties and bonds. This annunciation was received with deafening cheers, 
 in the midst of which, Mr.f Swartwout left the Exchange. The meeting was 
 then organized, James G. King being called to the chair, and J. A. Stevens 
 
 appointed Secretary ; when, on motion of Daniel Jackson, seconded by , 
 
 it was resolved, that the Chairman and Secretary, together with the mover 
 and seconder, be a committee to address, in the name of the meeting, a letter 
 of thanks to Mr. Swartwout for his manly conduct. 
 
 THE TROUBLES OF A TRAVELLER. 
 The currency being totally deranged, travellers were put to strange shifts. 
 
THE TROUBLES OF A TRAVELLER. ' 29 
 
 The following narrative appeared in the papers a few days after the suspen- 
 
 " I left New York on Thursday and anticipating some trouble in passing 
 Utica money, obtained two five dollar New Jei^ey bills, from my obliging 
 friend and kind host, Mr. Bunker. I was able to get over to Philadelphia 
 very well, and received silver to the amount of $1 50, in exchange for one of 
 my bills. I was able to pay my bill in Philadelphia with that and other silver, 
 and had one dollar in specie remaining when I went on board the steamboat 
 for New York. I immediately offered my New Jersey five dollar note, which 
 was refused, and I was informed that no money would be received except 
 specie, and notes of the Philadelphia and New York banks. Whilst this con- 
 versation was going on, a gentleman from Troy offered a five dollar note of 
 the Troy City Bank ; he was promptly told that no Safety Fund notes would be 
 received. As we had^ no Philadelphia or New York City money, we were in 
 some trouble, as it was early in the morning and no broker could be found. 
 We made up our minds to go on at any rate. After we had ascended the 
 Delaware a few miles, we went to the captain and stated our case ; he seemed 
 somewhat provoked that we had come on, for he said he had heard the young 
 man tell us that our money would not be received. He finally, however, con- 
 sented to take my New Jersey five dollar note, if we could muster one dollar in 
 silver, and give us two tickets for our passage. I stated to him that I wanted 
 breakfast, as did also the Troy gentleman ; he said he could not help that. 
 I took therefore two tickets, amounting to six dollars, having just one dollar 
 in silver, and we were compelled to go without our breakfasts. Fortunately, 
 the gentleman from Troy had a shilling and three cents in specie, with 
 which he purchased some gingerbread and apples, which we divided between 
 us, and thus we got back to New York. The Troy gentleman could only pay 
 me in a three dollar Vermont bill, and I had no other bills less than five dol- 
 lars. On my passage up the North River, I paid away this three dollar Ver- 
 mont bill, and took two supper tickets, in order to make change. Thus, in 
 the end, although I had no breakfast, I became entitled to two suppers." 
 
 THE JOKES OF THE CEASH OF 1831. 
 
 From the iV Y. Sun. 
 W " During the performance of Brutus at the National Theatre, a gentleman 
 asked his comrade what was the meaning of the letters S. P. Q. R., on the 
 banners. * Why, the meaning is plain enough, Tom,' replied his friend, * it 
 means Specie Payment Quite Rare !'"^ 
 
 From the Baltimore Gazette. 
 p" A market man at Lowell, Mass., being like every one else, bothered for 
 change, has hit upon a new expedient. With his marketables, he carries a 
 basket from which he makes change^in hens' eggs. Now, unless the Legisla- 
 ture, like some other wise bodies, should enact a penalty ' for issues of so 
 small a denomination,' we don't see why the Lowell man will not get along 
 very well." 
 
 From the JS^. Y. Commercial Advertiser. 
 " The * egg currency' is certainly better and more convenient than that of ] 
 some countries we wot of — Texas for instance, where th'ey pay in cows for I 
 large sums, and throw in the calves for the change." . 
 
 HARD TIMES FOR FIVE YEARS. 
 Ten days after the banks of New York had suspended specie payments, 
 Gov. Marcy signed a bill legalizing the suspension, and authorizing the banks 
 
80 HARD TIMES FOR FIVE YEARS. 
 
 of the state to issue twenty-nine and a half millions of paper. To provide a 
 circulating medium, " shinplasters " were issued in millions. The crops of 
 183Y were, fortunately, abundant, but during the winter of 1838, there was 
 extreme suffering among the poor, owing to the scarcity of employment. In 
 the life of Horace Greeley, we find the following notice of that dreadful 
 winter. 
 
 "The winter of 1838 was unusually severe. The times were hard, fuel and 
 food were dear, many thousands of men and women were out of employment, 
 and there was general distress. As the cold months wore slowly on, the 
 sufferings of the poor became so aofgravated, and the number of the unemploy- 
 ed increased to such a degree, that the ordinary means were inadequate to re- 
 lieve even those who were destitute of every one of the necessaries of life. 
 Some died of starvation. Some were frozen to death. Many, through ex- 
 posure and privation, contracted fatal diseases. A large number who had 
 never before known want, were reduced to beg.^ Respectable mechanics 
 were known to offer their services as waiters in eating houses for their food 
 only. There never had been such a time of suffering in New York before, 
 and there has not been since. Extraordinary measures were taken by the 
 comfortable classes to alleviate the sufferings of their unfortunate fellow cit- 
 izens. Meetings were held, subscriptions were made, committees were ap- 
 pointed; and upon one of the committees Horace Greeley was named to 
 serve, and did serve, faithfully and laboriously, for many weeks. The dis- 
 trict which his committee had in charge was the Sixth Ward, the ' bloody ' 
 Sixth, the squalid, poverty stricken Sixth, the pool into which all that is worst 
 in this metropolis has a tendency to reel and slide. It was his task, and that 
 of his colleagues, to see that no one froze or starved in that forlorn and pol- 
 luted region. More than this they could not do, for the subscriptions, liberal 
 as they were, were not more than sufficient to relieve actual and pressing 
 distress. In the better parts of the Sixth Ward a large number of mechanics 
 lived, whose cry was, not for the bread and the fuel ofcharisy, but for Work! 
 Charity their honest souls disdained. Its food choked them, its fire chilled 
 them. Work, give us work ! was their eager, passionate demand. 
 
 The spring brought relief, but the business of the country remained stag- 
 nant and disordered till 1842. The year 1841 was perhaps the gloomiest of 
 all. The failure of the United States' Bank, in consequence of its ill-judged, 
 but well-meant endeavors to sustain the cotton interest, brought ruin upon 
 thousands, and depressed business to the lowest point. In 1841, more than 
 3000 houses in Philadelphia stood vacant. But it was darkest just before the 
 dawn of better times. In 1842, the long period of enforced economy on the 
 part of the people, aided by the stimulating tariff of that year, and the hopes 
 infused by a new administration, began to give tone to the body pohtic. 
 From 1842 to 185*7, the country enjoyed great apparent, and some real, pros- 
 perity. The New York banks resumed specie payment in May 1838, but it 
 was not till 1842, that the resumption became general and permanent. Phila- 
 delphia resumed and suspended three times before her final resumption in 
 that year. 
 
OPINIONS ON THE CAUSE OF THE REVULSION. 81 
 
 CHAPTER VI. 
 
 OPINIONS RESPECTING THE CAUSE OF THE REVULSION. 
 It is curious to notice how blind many otherwise clear-headed persons were 
 to the true causes of the difficulty of 183Y, or what contradictory opinions 
 were expressed on every hand. 
 
 OPINION OF THE WHIG PARTr AS EXPRESSED IN THE N. Y. AMERICAN. 
 
 From the N. Y. Aynerican^ May 5, 1837. 
 
 " When the cause of our calamities is traced mainly to. misgovernment, we 
 hear it said, ' Oh, for God's sake, do not make this a political matter.' Not 
 make it a political matter? Why,- it is from politics, base, vile, mercenary, 
 personal politics, that the evil is Avhat it is. It is to the fatal popularity of 
 Andrew Jackson, which gave currency to every mearjare that the corruption 
 or resentments of his irresponsible minions and flatterers suggested to him — 
 it is to the dishonorable sycophancy which thought it 'glory enough' to serve 
 under, and render unquestioning obedience to such a chief, that the over- 
 whelming ruin which is desolating this land is, in a large degree, to be 
 ascribed. 
 
 " True, there has been overtrading — true, there has beei; expansion of the 
 currency — true, there has been a wild spirit of speculation — but all these 
 would have been moderated, controlled, and rendered kss disastrous, if the 
 balance-wheel of our whole monetary system, the Bank of the United States, 
 had not been broken, and if that scarcely less mischievous measure, the forced 
 introduction from Europe to which we were and are in debt, of its specie 
 treasures, had not boen undertaken." 
 
 THE OPINION OF PRESIDENT VAN BUREN. 
 
 The extra session of Congress, called to devise measures of relief, began 
 on the fourth of September, 1837. The President's Message was looked for 
 with the most intense interest. Mr. Van Buren gave the following opinion of 
 the causes of the total prostration of credit: — 
 
 " The history of trade in the United States for the last three or four years, 
 affords the most convincing evidence that our present condition is chiefly to 
 be attributed to overaction in all the departments of business ; an overaction 
 deriving, perhaps, its first impulses from antecedent causes, but stimulated to 
 its destructive consequences by excessive issues of bank paper, and by other 
 facilities for the acquisition and enlargement of credit. At the commence- 
 ment of the year 1834 the banking capital of the United States, including 
 that of the national bank then existing, amounted to about two hundred mil- 
 lions of dollars ; the bank notes then in circulation, to about ninety-five mil- 
 lions ; and the loans and discounts of the banks to three hundred and twenty- 
 four millions. Between that time and the first of January, 1838, being the 
 latest period to which accurate accounts have been received, our banking 
 capital was increased to more than two hundred and fifty-one milHons ; our 
 paper circulation to more than one hundred and forty millions ; and the loans 
 and discounts to more than four hundred and fifty-seven miUions. To this 
 vast increase are to be added the many millions of credit, acquired by means 
 of foreign loans, contracted by the States and State institutions, and above all 
 by the lavish accommodations extended by foreign dealers to our merchants. 
 
 " The consequences of this redundancy of credit and of the spirit of reck- 
 less speculation engendered by it, were, a foreign debt contracted by our citi- 
 
82 THE OPINION OFcrEESIDENT|VAN BUREN. ; 
 
 zens, estimated, in March last, at more than thirty millions of dollars; the 
 extension to traders in the interior of our country, of credits for supplies, 
 greatly beyond the wants of the people ; the inyestment of thirty-nine and a 
 half millions of dollars in unproductirve pubhc lands, in the years 1885 and 
 1836, -whilst, in the preceding year the eales amounted to only four and a half 
 millions ; the creation of debts, to an almost countless amount, for real estate 
 in existing or anticipated cities and villag«es, equally unproductive, and at 
 prices now seen to have been greatly disproportionate to their real value ; the 
 expenditure of immense sums in improvements which, in many cases, have 
 been found to be ruinously improvident ; the diversion to other pursuits of 
 much of the labor that should have been applied to agriculture, thereby con- 
 tributing to the expenditure of large sums in the importation of grain from 
 Europe — an expenditure which, amounting in 1834 to about two hundred and 
 fifty thousand dollars, was, in the first two quarters of the present year, in- 
 creased to more than two milHons of dollars ; and finally, without enumerat- 
 ing other injurious results, the rapid growth among all classes, and especially 
 in our great commercial towns, of luxurious habits, founded too often on 
 merely fancied wealth, and detrimental aUke to the industry, the resources, 
 and the morals of our people. 
 
 " It was so impossible that such a state of things could long continue, that 
 the prospect of revulsion was present to the minds of considerate men before 
 it actually came. None, however, had correctly anticipated its severity. A 
 concurrence of circumstances, inadequate of themselves to produce such wide- 
 spread and calamitous embarrassments, tended so greatly to aggravate them, 
 that they cannot be overlooked in considering their history. Among these 
 may be mentioned, as most prominent, the great los5 of capital sustained by 
 our commercial emporium in the fire of December, 1885 — a loss, the effects 
 of which were underrated at the time, because postponed for a season by the 
 great facilities of credit then existing ; the disturbing effects, in our commer- 
 cial cities, of the transfers of the public moneys required by the deposite law 
 of June, 1836 ; and the measures adopted by the foreign creditors of our 
 merchants to reduce their debts, and to withdraw from the United States a 
 large portion of our specie. 
 
 " However unwilling any of our citizens may heretofore have been to as- 
 sign to these causes the chief instrumentality in producing the present state 
 of things, the developments subsequently made, and the actual condition of 
 other commercial countries, must, as it seems to me, dispel all remaining 
 doubts upon the subject. It has since appeared that evils, similar to those 
 suffered by ourselves, have been experienced in Great Britain, on the conti- 
 nent, andi indeed, throughout the commercial world ; and that, in other coun- 
 tries, as well as in our own, the^ have been uniformly preceded by an undue 
 enlargement of the boundaries of trade, prompted, as with us, by unprece- 
 dented expansions of the systems of credit. A reference to the amount of 
 banking capital, and the issues of paper credits put in circulation in Great 
 Britain, by banks, and in other ways, during the years 1834, 1836, and 1886, 
 will show an augmentation of the paper currency there, as much tlispropor- 
 tioned to the real wants of trade as in the United States. Wilh this redun- 
 dancy of the paper currency, there arose in that country also a spirit of ad- 
 venturous speculation, embracing the whole range of human enterprise. Aid 
 was profusely given to projected improvements ; large investments were made 
 in foreign stocks and loans ; credits for goods were granted with unbounded 
 liberality to merchants in foreign countries, and all the means of acquiring 
 and employing credit were put in active operation, and extended in their ef- 
 fects to every department of business, and to every quarter of the globe. The 
 reaction was proportioned in its violence to the extraordinary character of the 
 events which preceded it. The commercial community of Great Britain were 
 subjected to the greatest difficulties, and their debtors in this country were 
 
THE OPINION OF NICHOLAS BIDDLE. 83 
 
 not only suddenly deprived of accustomed and experienced credits, but called 
 upon for payments, which in the actual posture of things here, could only be 
 made through a general pressure, and at the most ruinous sacrifices. 
 
 " In view of these facts, it would seem impossible for sincere inquirers after 
 truth to resist the conviction that the causes of the revulsion in both countries 
 have been substantially the same. Two nations, the most commercial in the 
 world, enjoying but recently the highest degree of apparent prosperity, and 
 maintaining with each other the closest relations, are suddenly, in a time of 
 profound peace, and without any great national disaster, arrested in their 
 career, and plunged into a state of embarrassment and distress. In both 
 countries we have witnessed the same redundancy of paper money, and other 
 facilities of credit; the same spirit of speculation ; the same partial successes; 
 the same difficulties and reverses, and, at length, nearly the same overwhelm- 
 ing catastrophe." 
 
 THE OPINION OF NICHOLAS BIDDLE ON THE EFFECTS OF REQUIRING THE 
 PUBLIC LAND TO BE PAID FOR IN HARD CASH. 
 
 ** The whole pecuniary system of this country, that to which, next to its 
 freedom, it owes its prosperity, is the system of credit. Our ancestors came 
 here without money — but with far better things — with courage and industry — 
 and the want of capital was supplied by their mutual confidence. This is the 
 basis of our whole commercial and internal industry. The government re- 
 ceived its duties on credi*, and sold its lands on credit. When the sales of 
 lands on credit became inconvenient from the complication of accounts, the 
 lands were sold for what is termed cash. But this was only another form of 
 credit, for the banks, by lending to those who purchased lands, took the place 
 of the government as creditors — and the government received their notes as 
 equivalent to specie, because always convertible into specie. This was the 
 usage — this may be regarded as the law of the country. By the resolution of 
 Congress passed on the 30th of April, 1816, it was declared that " no duties, 
 taxes, debts, or sums of money, accruing or becoming payable to the United 
 States as aforesaid, ought to be collected or received otherwise than in the 
 legal currency of the United States, or treasury notes, or notes of the Bank of 
 the United States, or in notes of banks which are payable and paid on de- 
 mand in the said legal currency of the United States." 
 
 " This resolution presents various alternatives — the legal currency — or trea- 
 sury notes — or notes of the Bank of the United States — or notes %i specie 
 paying banks. A citizen had a right to choose any one of these 
 modes of payment. He had as much right to pay for land with the 
 note of a specie paying bank, as to pay it for duties at the custom house. If 
 this be denied, certainly any one of them might be accepted by the treasury 
 — but to prescribe all but one — to refuse everything but the most difficult 
 thing — to do this without notice of the approaching change in the fundamen- 
 tal system of our dealings — is an act of gratuitous oppression. 
 
 " Under the operation of this resolution, the banks had gone on, fearing no- 
 thing, as they only had to provide for the usual specie calls upon them — and 
 saw the country full of specie, with no foreign demand to drain it from them — 
 when, on a sudden, without any intimation of the coming shock, an order was 
 issued by the secretary, declaring that their notes were no longer receivable, 
 and, of course, inviting all who held the notes, or had deposits in these banks, 
 to convert them into specie. It in fact, made at once the whole amount of 
 their circulation and private deposits a specie demand upon them. The first 
 consequence was that the banks nearest the land offices ceased making loans. 
 The next was, that they strove to fortify themselves by accumulating specie. 
 It was just at this moment that the warrants for transfers were put into their 
 liandn. The combination of the two measures produced a double result — first. 
 
 / 
 
84 THE OPINION OF ^flCHOLAS BIDDLE. 
 
 t) require the banks generally to increase their specie, and next, to give them 
 the means of doing it by drafts on the deposite banks. The commercial com- 
 mmiity were thus taken by surprise. The interior banks making no loans, 
 and converting their Atlantic funds into specie, the debtors in the inte- 
 rior could make no remittances to the merchants in the Atlantic cities, who 
 are thus thrown for support on the banks of those cities, at a moment when 
 they are unable to afford relief on account of the very abstraction of their 
 specie to the West. The creditor States not only receive no money, but their 
 money is carried aw^ay to the debtor States, who, in turn, cannot use it, either 
 to pay old engagements, or contract new. By this unnatural process, the 
 specie of New York and the other commercial cities is piled up in the West- 
 ern States — not circulated, not used, but held as a defence against the trea- 
 sury — and while the West cannot use it, the East is suffering for the want of 
 it. The result is, that the commercial intercourse between the West and the 
 Atlantic is almost wholly suspended, and the few operations which are made 
 are burdened with the most extravagant expense. In November, 1836, the 
 money has risen to twenty-four per cent. — merchants are struggling to preserve 
 their credit by ruinous sacrifices — and it costs -five or six times as much to 
 transmit funds from the West and South West, as it did in November, 1835, 
 or 34, or 82. Thus while the exchanges with all the world are in our favor — 
 while Europe is alarmed, and the bank of England itself uneasy at the quan- 
 tity of specie we possess — we are suffering because from mere mismanage- 
 ment, the whole ballast of the currency is shifted from one side of the vessel to 
 the other. In the absence of good reasons for these 'measures, and as a pre- 
 text for them, it is said that the country has over-traded — that the banks 
 have over issued, and that the purchasers of public lands have been very ex- 
 travagant. I am not struck by the truth or propriety of these complaints. 
 The phrase of overtrading is very convenient, but not very intelligible. If it 
 means anything, it means that our dealings with other countries have brought 
 us in debt to those countries. In that case the exchange turns against our 
 country, and is rectified by an exportation of specie or stocks in the first in- 
 stance — and then by reducing the imports to the exports. Now, the fact is, 
 that at this moment, the exchanges are all in favor of this country — that is, 
 you can buy a bill of exchange on a foreign country cheaper than you can 
 send specie to that country. Accordingly much specie has come in — none 
 goes out. This, too, at a moment when the exchange for the last crop is ex- 
 hausted, and that of the new crop has not yet come into the market — and when 
 we are on*the point of sending to Europe the produce of the country to the 
 amount of eighty or one hundred millions of dollars. How, then, has the 
 •country overtraded? Exchange with all the world is in favor of New York. 
 How then can New York be an overtrader ? Her merchants have sold goods to 
 the merchants of the interior, who are willing to pay, and under ordinary 
 circumstances able to pay — but by the mere fault of the government, as obvious 
 as if an earthquake had swallowed them up , their debtors are disabled from 
 making immediate payment. It is not that the Atlantic merchants have sold 
 too many goods, but that the government prevents their receiving pay for 
 any. Moreover, in the commercial cities money can be had, though at ex- 
 travagant rates, for capitalists add to the ordinary charges for the use of it a 
 high insurance against the loss of it. It is not then so much that money is 
 not to be procured, as that doubt and alarm increase the hazard of lending it. 
 *' Then as to the banks. It is quite probable that many of the banks have 
 extended their issues — but whose fault is it ? Who called these banks into 
 existence ? The executive. Who tempted and goaded them to these issues ? 
 Undoubtedly the executive. The country five years ago, was in possession 
 of the most beautiful machinery of currency and exchanges that the world 
 ever saw. It consisted of a number of banks protected, and at the same 
 time restrained by the bank of the United States. 
 
THE OPINION OF NICHOLAS BIDDLE. 35 
 
 "The people of the United States, through their representatives, re-charter- 
 *ed that institution. But the executive, discontented with its independence, 
 rejected the act of Congress — and the favorite topic of declamation was, 
 that the states would make banks, and that these banks would create a better 
 system of currency and exchanges. The states accordingly made banks — 
 and then followed idle parades about the loa'n^ of these banks, and their en- 
 larged dealings in exchange. And what is the consequence ? The Bank of 
 the United States has not ceased to exist more than seven months, and al- 
 ready the whole currency and exchanges are running into inextricable confu- 
 sion, and the industry of the country is burdened with extravagant charges 
 on all the commercial intercourse of the Union. And now when these banks 
 have been created by the Executive, and urged into these excesses, instead of 
 gentle fand gradual remedies, a fierce crusade is raised against them — the 
 funds are harshly and suddenly taken from them, and they are forced to ex- 
 traordinary means of defence against the very power which brought them 
 into being. They received, and were expected to receive, in payment for the 
 government, the notes of each other, and the notes of other banks, and the 
 facihty with which they done so, was a ground of special commendation by 
 the government. And now that government has let loose upon them a de- 
 mand for specie to the whole amount of these notes. I go further. There is 
 an outcry abroad, raised by faction, and echoed by folly, against the banks in 
 the United States. Until it was disturbed by the government, the banking 
 system of the United States was at least as good as that of any other com- 
 mercial country. What was desired for its perfection was precisely what I 
 have so long striven to accomplish — to widen the metallic bases of the cur- 
 rency by a greater infusion of coin into the smaller channels of circulation. 
 This was in a gradual and judicious train of accomphshment. But this miser- 
 able foolery about an exclusively metallic currency, is quite as absurd as to 
 discard the steamboats, and go back to poling up the Mi^^sissippi. Banks may 
 often err from want of skill, and occasionally be as injurious as steam is — ^but 
 it is not the less true, that the banks of this country have been the great in- 
 struments of its improvement, and that, during all the convulsions of the last 
 fifteen years, for every American bank that has failed, at least ten English 
 banks have failed. So with regard to the lands. For the last few years, the 
 amount of the sales of the pubhc lands has been a constant theme of congrat- 
 ulation with the Executive. In the very last message, on the 12th of Decem- 
 ber, 1835, he repeats the same strain. ' Among the evidences of the increasing 
 prosperity of the country^ not the least gratifying is that afforded by the re- 
 ceipts of the public lands^ which amount in the present year to eleven millions 
 of dollars. This circwnstance attests the rapidity with which agriculture^ the 
 first and most important occupation of man^ advanced^ and contributes to the 
 wealth and power of our extended territory ^ In the same message he declared 
 that the circulating medium has been greatly improved. By the use of the 
 State banks, it is ascertained that all the ivants of the community in relation 
 to exohange and currency are supplied as well as they have ever been before? 
 Scarcely seven months elapse when these pastoral and financial visions di- 
 aolve in air. Agriculture ceases to be ' the first and most important occupa- 
 tion of man,' the State banks cease to be the models of exchange and cur- 
 rency — but forth issues the secretary with a declaration that to protect the 
 treasury ' from frauds, speculation, and monopolies in the purchase of public 
 lands,' — from 'excessive bank credits' — from 'ruinous extensions of bank 
 issues' — nothing shall be received for land but gold and silver. " 
 
 " Now what an exhibition is this ? 
 
 " The public lands are exposed to public auction, the prices reduced in order 
 to encourage sales, and the President stands by, exulting at the amount, when 
 suddenly he declares that he will permit no speculations, and that he will raise 
 the price of the lands, by raising the price of what alone he will receivcfor 
 
36 - DANIEL WEBSTER^S OPINION, 
 
 them. Now, supposing it true that men have bought too much land. What 
 right has the President to dictate to the citizens of this country whether they 
 buy too much land, or too much broadcloth ? They might be permitted to 
 know and to manage their own concerns, quite as well as he does, leaving the 
 evil, if it be one, to correct itself by its own excess. If he prohibits the re- 
 ceipt of anything but specie to correct land speculations, he may make the 
 same prohibition as to the duties on hardware, or broadcloth, or wines, when- 
 ever his paternal wisdom shall see us buying too many shovels, or too many 
 coats, or too much champaigne — and this brings the entire industry of the 
 country under his control." 
 
 DANIEL Webster's opinion. 
 
 From a Speech delivered at Wheelmg^ Va. {about) May 20, 183Y. 
 
 " I travel, gentlemen, for the purpose of seeing the country, and of seeing 
 what constitutes the important part of every country — the people. I find 
 everywhere much to excite, and much to gratify admiration, and the pleasure 
 I experience is only diminished by remembering the unparalleled state of dis- 
 tress which I have left behind me, and the apprehensions, rather than the 
 feeling, of severe evils which I find to exist wherever I go. 
 
 " I cannot enable those who have not witnessed it, to comprehend the full 
 extent of the suffering in the eastern cities. It was painful, indeed, to behold 
 it. So many bankruptcies among great and small dealers, so much property 
 sacrificed, so many industrious men altogether broken up in their business, so 
 many families reduced from competence to want. So many hopes crushed, 
 BO many happy prospects forever clouded, and such a fearful looking for still 
 greater calamities, all form such a mass of evil as I had never expected to see, 
 except as the result of war, of pestilence, or some other external calamity. 
 
 " I have no wish, in the present state of things, nor should I have, indeed, 
 if the state of things were different, to obtrude the expression of my pohtical 
 sentiments upon such of my fellow-citizens as I may happen to meet, nor, on 
 the other hand, have I any motive for concealing them, or suppressing their 
 expression, whenever others desire that I should make them known. Indeed, 
 on the great topics that now engage public attention, I hope I may flatter 
 myself that my opinions are already known. 
 
 '* Recent evils have not at all surprised me, except that they have come 
 eooner and faster than I had anticipated. But, though not surprised, I am 
 afflicted ; I feel anything but pleasure in this early fulfilment of my own pre- 
 dictions. Much injury is done which the wisest future counsels can never 
 repair, and much more that can never be remedied but by such counsels, and 
 by the lapse of time. From 1832 to the present moment, I have foreseen 
 this result. I may safely say I have foreseen it, because I have presented 
 and proclaimed its approach in every important discussion and debate in the 
 public body of which I am a member. In 1S32 I happened to meet with a 
 citizen of Wheeling, now present, v.ho has this day ivuiinded meof what I 
 then anticipated as the result of the measures which the administration ap- 
 peared to be forming with regard to the currency. In the summer of 1833, 1 
 was here, and suggested to friends what I knew to be resolved upon by the 
 executive, namely, the removal of the dcposites, which was announced two 
 months afierward. That was the avowed and declared commencement of the 
 * Experiment.'' You know, gentlemen, the obloquy then and since cast upon 
 those of us who opposed the ''Experiment'' You know that we have been 
 called b.xnk agents, bank advocaters, banlv hirelings. You know that it lias 
 been a thousand times said that the Ex[)eriHient worked admirably, that no- 
 Ihing could be better, that it was the highest ]>ossible evidence of the practi- 
 Ci.l wisdom and F[i{:neily of its contrivers; n\n\ none opiKi^-cd il, dv di.'ubted 
 
DANIEL WEBSTER'S OPINION. Sl 
 
 its eJSiciency, but the wicked or the stupid. Well, gentlemen, here is the 
 end, if this is the end, of this notable '■ Experiment.' Its singular wisdom 
 has come to this — its fine workings have wrought out an almost general 
 bankruptcy. 
 
 *' Its lofty promises, its grandeur, its flashes, that threw other men'c sense 
 and understanding back into the shade — wheje are they now ? Here is ' the 
 fine of fines, and the recovery of recoveries.' Its panics, its scoffs, its jeers, 
 its jests, its jibes at all former experience, its cry of a * new poUcy,' which 
 was so much to dehght and astonish mankind. To this conclusion has it come 
 at last. 
 
 * But yesterday, it stood against the world ; 
 
 Now lies it there, and none so poor to do it reverence.' 
 
 " It is with no feehngs of boasting or triumph, it is with no disposition to 
 arrogate superior wisdom or discernment, but it is with mortification, with 
 humiliation, with unaffeeted grief and affliction, that I contemplate the con- 
 dition of difficulty and distress to which this country, so vigorous, so great, 
 so enterprising, and so rich in internal wealth, has been brought by the 
 policy of her government. 
 
 " We learn, to-day, that most of the eastern banks have stopped payment 
 — deposite banks as well as others. The Experiment has exploded. That 
 bubble which so many of us have all along considered as the offspring of con- 
 ceit, presumption, and political quackery, has burst. A general suspension 
 must be the result — a result which has come even sooner than was predicted. 
 Where is now that better currency that was promised ? Where is that specie 
 circulation ? Where are those rupees of gold and silver which were to fill 
 the treasury of the government, as well as the pockets of the people ? Has 
 the government a single hard dollar? Has the treasury anything in the 
 world but credit and deposites in banks that have already suspended specie 
 payments? How are pubhc creditors now to be paid in specie ? How are 
 the deposites which the law requires to be made with the States on the first 
 of July, now to be paid ? We must go back to the beginning and take a new 
 start. Every step in our financial and banking system, since 1832, has been 
 a false step. It has been a step which has conducted us farther and farther 
 from the path of safety. 
 
 . "The discontinuance of the National Bank, the illegal removal of the de- 
 posites, the accumulation of the pubhc revenue in banks selected by the ex- 
 ecutive, and for a long time subjected to no legal regulation or restraint, and 
 finally the unauthorized and illegal treasury order, have brought us where 
 we are. The destruction of the National Bank was the signal for the creation 
 of an unprecedented number of new State banks. Some of them with more 
 disproportionate, and even more nominal capital, than the National Bank had 
 possessed. These banks lying under no restraint from the general govern- 
 ment or any of its institutions, issued paper corresponding to their own sense 
 of their immediate interests and hopes of gain. The deposite with tlie State 
 banks of the whole public revenue, then accumulated to a vast amount, and 
 making this deposite without any legal restraint or control whatever, increased 
 both the power and disposition of the banks for extensive issue. In fact, the 
 government seems to have administered every possible provocation to the 
 banks to induce them to extend their circulation. It uniformly, zealously 
 and successfully opposed the land bill, a most useful measure, by which accu^ 
 mulation in the treasury would have been prevented ; and, as if it desired and 
 sought this accumulation, it finally resisted, with all its power, the deposite 
 among the States. It is advanced as a reason for the present overthrow, that 
 an extraordinary spirit of speculation has gone abroad, and has Ijeen mani- 
 fested, particularly and strongly in the endeavor to purchase the public land ; 
 but lias not every act of the government directly encouraged this spirit? It 
 
38 DANIEL WEBSTER'S OPINION, 
 
 accumulated revenue which it did not need, all of which it left in the deposite 
 banks. The banks had money to lend, and there were those w^lio were ready 
 to borrow for the purpose of purchasing lands at government prices. The 
 public treasury was thus made the great and efficient means of affecting those 
 purchases which have since been so much denounced as extravagant specula- 
 tion and extensive monopoly. These purchasers borrowed the public money ; 
 they used the public money to buy the pubHc property ; they speculated on 
 the strength of the public money ; and while all this was going on, and every 
 man saw it, the administration resisted to the utmost of its powder every at- 
 tempt to withdraw this money from the banks and from the hands of those 
 speculators, and distribute it among the people to whom it belonged. If there 
 has been overtrading, the government has encouraged it ; if there has been 
 rash speculation in the public lands, the government has furnished the means 
 out of the treasury. These unprecedented sales of the public domain were 
 boasted of as a proof of a happy state of things, and of a wise administration 
 of the government, down to the moment when Congress, in opposition to ex- 
 ecutive wishes, passed the distribution law, thus withdrawing the surplus re- 
 venue from the deposite banks. The success of that measure compelled a 
 change in the executive policy, as the accumulation of a vast amounfi of money 
 in the treasury was no longer desirable. This is the most favorable motive 
 to which I can ascribe the treasury order of July. It is now said that that 
 order was issued for the purpose of enforcing a strict execution of the law 
 which forbids the allowance of credits upon purchasers of the public lands, 
 but there was no such credit allowed before ; not an hour was given beyond 
 the time of sale. 
 
 "In this respect, the order produces no differences whatever. Its only effect 
 is to require an immediate payment in specie ; whereas, before, an imme- 
 diate payment in the bills of specie-paying banks was demanded. There was 
 no more credit in the one case than in the other • and the government gets 
 just as much specie in the one case as in the other ; for no sooner is the 
 specie, which the purchaser is compelled to procure (often at great charge) 
 paid to the receiver, than it is sent to the deposite banks, and the govern- 
 ment has credit for it on the books of the bank ; but the specie itself has 
 been again sold by the bank, or disposed of as it sees fit. It is evident that 
 the government gets nothing by all this, though the purchaser, and especially 
 the purchaser of small tracts, are put to great trouble and expense. No one 
 gains anything but the bankers and the brokers. It is, moreover, most true, 
 that the art of man could not have devised a plan more effectually to give the 
 large purchasers or speculators a decided preference and advantage over 
 small purchasers who purchase for actual settlement, than the treasury order 
 of July, 1836. The stoppage of the banks, however, has now placed the ac- 
 tual settler in a still more unfortunate situation. How is he to get money to 
 pay for his quarter section ? He must travel three or four times as many 
 miles for it as he has dollars to pay, even if he should be able to obtain it at 
 the end of that journey. 
 
 " I will not say that other causes, both at home and abroad, have not had 
 in agency in bringing about the present derangement. I know that credits 
 have been used beyond all former example ; that it is probable the spirit of 
 trade has been too highly excited; that the pursuit of business may have 
 been pressed too fast, and too far. All this I am ready to admit. But, in- 
 stead of doing anything to abate its tendency, our government has been the 
 prime instrunjent of fostering and encouraging it. It has jnirtcd voluntarily,- 
 and by advice, with all control over the actual currency of the country. It 
 has given a free and full scope to the spirit of banking. It has aided the 
 spirit of speculation with the public treasure ; and it has done all this in the 
 midst of loud-sounding promises of an exclusive specie medium, and a pro- 
 fessed detestation of all banking institutions." 
 
PANIC AND REVULSION OF 185Y. 
 
 CHAPTER YII. 
 
 PANIC AND REVULSIOIir OF 185t. 
 
 The revulsion from which we are still suffering has been remarkable for its 
 suddenness and severity. 
 
 On the 23d of August last, the country to all appearance, was in a state of 
 high and general prosperity. The- Fall business had opened well ; in some 
 branches of business, dealers had done as much as they chose to do. Merchants 
 were returning from the watering-places in excellent spirits, without a surmise 
 of disaster. Pleasure-seekers were coming to the metropoUs in crowds to par- 
 take of the rich banquet of delights which the caterers for the public amuse- 
 ment had provided for the opening season. The harvest of grain and grass 
 then fully garnered, was superabundant ; and, though Indian corn was late, 
 yet there was little doubt of its ultimate safety in all the states south of New 
 England. The great staples of the South were in active demand at remuner- 
 ating prices. The manufacturing interests of the North were under a cloud, 
 it is true, but they had long been in that condition, and it excited liitle remark. 
 The shipping interest, since the termination of the Crimean war, had been 
 scarcely paying its way ; but that, too, was an old story. In short, the whole 
 country, on the morning of the last 24th of August, felt satisfied with itself 
 and confident of its future. 
 
 The following are the prices at which some of the leading stocks were sold 
 at the New York Stock Exchange on that day : — N. Y. Central, 11^ ; Erie, 28 ; 
 Reading, 66 ; Michigan Central, 16 J ; Panama, 90; Illinois Central, 106 ; Dela- 
 ware and Hudson Canal, 114^; Park Bank, 102; American Exchange Bank, 
 110. 
 
 We now present the subsequent events in the form of a brief 
 
 DIARY OF DISASTER. 
 
 Aug. 24th, 1857. — Failure of the Ohio Life and Trust Company was an- 
 nounced. A few days before, its stock had sold at 102, and it had declared a 
 semi-annual dividend of 5 per cent. The failure astounded the street, and 
 gave a shock to Confidence from which it has not yet begun to recover. This 
 was the beginning disaster. 
 
 Aug. 25th.— John Thompson failed. The Habilities of the Ohio Life and 
 Trust Company were found to be, at least, five millions, a large part of which 
 were held by New York banks. Increased alarm and distrust. All stocks 
 fell from three to seven per cent. N. Y. Central, 72 ; Erie 22 ; Panama, 86 ; 
 Ilhnois Central, 104. 
 
 Aug. 26th.— Failure of seven country banks announced. Increasing scarci- 
 ty of money. Further decline in stocks. N. Y. Central, 71 ; Erie, 20; Read- 
 ing, 5<J; Panama, 84 ; Illinois Central, :;9| ! Metropolitan Bank, 104. 
 
4o DIARY OF DISASTER. 
 
 Aug. 2*7 th.— Slight rally. Metropolitan Bank, 105 ; Erie, 21 ; N. Y. Cen- 
 tral, 15 ; Illinois Central, 99 ; Delaware and Hudson Canal, 113. 
 
 Aug. 28tli. — Rally more than lost. Extreme pressure for money. Metro- 
 politan Bank, 102; Park Bank, 99. Bank of Commerce, 100; Delaware and 
 Hudson Canal, 112 ; N. Y. Central, '74; Ohio Life and Trust, 1^7 ; Erie, 20i 
 
 Aug. 29th. — Slight decline on nearly all stocks. Park Bank, 98 ; Am. Ex. 
 Bank, 100; Bank of N. Y., 110; Erie, 19. Two per cent, a month beginning 
 to be thought Si favorable rate for money. 
 
 Aug. 30th. — Sunday. 
 
 Aug. 31st. — The contraction of the New York banks had. now reached five 
 and a half millions in two weeks. Specie in banks $9,241,305. Rumors of 
 failures and extreme uneasiness. 
 
 Sept. 1st. — Failure of Mechanics' Banking Association; Beebee & Co., bul- 
 lion dealers ; Adams & Buckingham, and many others. Almost a panic. 
 Teller of Mechanics' Banking Association a defaulter to the amount of $72,000. 
 Erie, 18 ; N. Y. Central, 72; Reading, 55. 
 
 Sept. 2d. — No new failures, and decided re-action from the fright of yester- 
 day. Am. Ex. Bank, 95 ; Metropolitan Bank, 97 ; Del. and Hud. Canal, 108 ; 
 Erie, 20^ ; N. Y. Central, 72. 
 
 Sept. 3d. — Still more decided rally. Cheerful, buoyant feeling everywhere ; 
 every one supposing that now the crisis was over. Metropolitan Bank. 99j ; 
 Del. and Hud. 109 ; N. Y. Central, 77 ; Erie, 24 ; Illinois Central, 104. 
 
 Sept. 4th. — The rally more than sustained. Slight advance on most of the 
 leading stocks. 
 
 Sept. 5th. — Rally nearly all lost. Money very tight. Failure of Stillman & 
 Allen. The first of the veri/ blue Saturdays. 
 
 Sept. 6th. — Sunday. 
 
 Sept. 7th. — The contraction of the banks had now reached eight millions 
 in three weeks. Specie in bank ten and a half milHons. Bank statement dis- 
 couraging. Several failures announced. No general fall in stocks, however. 
 
 Sept. 8th. — Awful pressure for money, and stocks all down. 
 
 Sept. 9th. — Fitzburgh & Littlejohn, proprietors of the old Oswego Trans- 
 portation Co», failed. Other failures very numerous, and the city full of 
 rumors and forebodings. Am. Ex. Bank, 98 ; Metropolitan Bank, 99 ; Park 
 Bank, 84; Del. and Hud., 108; Erie, 19| ; Panama, 80; N. Y. Central, 69; 
 Reading, 41 J ; Illinois Central, 90. 
 
 Sept. 10th. — Large fiiilures among dry goods houses. Rumor that Bowen 
 and McNamee had sustained themselves by selling their new marble store to 
 W. B. Astor for cash. Contradicted; Mr. Astor in Europe. Every symptom 
 of an approaching panic. New York bank stocks fell from 3 to 5 per cent. 
 
 Sept. 11th. — No change, but tendency downward. Another dismal Satur- 
 day. 
 
 Sept. 12th.— Sunday. 
 
 Sept. 14th. — Wesley & Co., stock brokers, suspended, after having 
 paid $100,000 difTer. Board of Brokers rcpolvc to restrict time sulc« to 
 
DIARY OF DISASTER.- 41 
 
 30 days. Many very large failures. Am. Ex. bank, 92 ! Del. and Hud. 105 ; 
 Reading, 41 ; N. Y. Central, 10. 
 
 g^ Sept. ISth. — Reports of extreme stringency in Philadelphia, Cincinnati, and 
 Chicago. New York bank statement encouraging ; specie increasing. Alarm 
 beginning to be felt for the Central America. 
 
 Sept. 16th. — Increasing alarm for the Central America. Market feverish. 
 Money at unheard of rates. Slight decline on most stocks. 
 
 Sept. 11th. — The loss of the Central America announced. Anxiety for the 
 passengers drew off" attention from the effect of the calamity on the times. 
 Total loss, including gold in hands of passengers and the value of the ship, 
 about two and a half millions. No insurance on ship ; half a million gold only 
 insured in New York. 
 
 Sept. 18th and 19th. — Market depressed, but quiet; slight decline in most 
 stocks; Erie, lYi. 
 Sept. 20th.— Sunday. 
 
 Sept. 21st.— Failure of Persse & Brooks, Cyrus W. Field & Co., paper deal- 
 ers. Immense failures in Philadelphia, Caleb Cope & Co. among them. In- 
 tense pressure everywhere. Am. Ex. banl^, 91 ; Ohio Life and Trust, 8 J ; N. 
 Y. Central, 07 ; Illinois Central, 89 ; Panama, 81 ; Erie, IBj. 
 
 Sept. 22d. — ^Bangs, Bros. & Co., booksellers, failed, with many other import- 
 ant houses. Run on the Philadelphia banks. 
 
 Sept. 25th. — Philadelphia banks partly suspended specie payments. Univer- 
 sal bewilderment and panic. Decline of all stocks. 
 
 Sept. 26th. — Total suspension of Philadelphia banks. All eyes directed to 
 New York banks. Am. Ex. bank, 88 ; Metropolitan bank, 90 ; Bank of Am. 
 100; Ocean bank, 15 ; Del. and Hud. 103 ; Panama, 18 ; Erie, 15 ; Reading, 
 3Y ; Illinois Central, 87 ; N. Y. Central, 66. Another of the Saturdays ! 
 Sept. 2'7th.— Sunday. 
 
 Sept. 28th, — Bank statement looked for with extreme anxiety. It was 
 thought encouraging. The contraction had proceeded to $13,500,000 in six 
 weeks — as though so much money had been annihilated ! Thirteen presi- 
 dents of banks formally declared that the New York banks would not suspend. 
 Sept. 29th. — Crisis in Chicago : many failures there, and panic. New York 
 full of rumors. Failures very numerous, but few important. Erie Railroad 
 hard pressed, and meeting called of stockholders. Bank of Am., 98 ; Metro- 
 politan bank, 1Q ; Del. and Hud. Canal, 98 ; N. Y. Central, 60 ; Erie, 13. 
 Upon the whole, a better feeling in the city. 
 
 Sept. 80th. — Further dechne in stocks. Business men in chronic panic. 
 Money all but impossible to get at any price. 
 
 Oct. 1st. — Four banks in Louisville suspended. No improvement in money. 
 Erie, 10 J ; N. Y. Central, 54. All bank stocks lower. 
 
 Oct. 2d. — Absolute panic. Michigan Central fell 10 per cent, under the an- 
 nouncement that the October dividend would be retained. Farmers and Me- 
 chanics Bank of Williamsburgh suspended. The great failures were, P. 
 
42 DIARY OF DISASTER. 
 
 Chouteau Jr. & Co. (five), Lawrence, Stone & Co. of Boston. Am. Ex. bank, 
 '70 ; Reading, 31 ; N. Y. Central, 54. 
 
 Oct. 3d. — The hard Saturday. Thirty-five milhons to pay. The struggle 
 was desperate, and, on the whole, successful. Few notes protested. The sus- 
 pension of the large house of Clark, Dodge & Co. was the disaster of the day. 
 Every one felt greatly relieved at the close, and even the croakers thought the 
 worst was over. Bank of Commerce, 78; Del. and Hud. Canal, 90; Reading. 
 25J ; lUinois Central, 75; N. Y. Central, 51. 
 
 Oct. 6th. — The Bank statement this morning affected business very unfavor- 
 ably. The fatal contraction had continued, and the banks showed less strength 
 than had been expected. Decrease in loans and discounts, $1,855,934; de- 
 crease in specie, $1,926,682; increase in circulation, $Y7,'794 ; decrease in de- 
 posits, actual, $4,120,498. The great Pacific House of Willets & Co. stopped, 
 and the American Exchange Bank refused the drafts of Sather & Church, of Cal- 
 ifornia. Money was next to impossible. N. Y. 6s, GO ; Merchant's Bank, 92 ; 
 Metropolitan Bank, 12 ; Rutger's Fire, 106 J ; N. Y. Central, 52. Three Hart- 
 ford Banks suspended. Better feeling in Boston. Extra session of the Penn- 
 sylvania Legislature began. 
 
 Oct. '7th. — Increased depression in consequence of the Bank statement. 
 Rumors and forebodings on every hand. K Y. 6s, 90 ; Bank of America, 92 ; 
 Am. Ex. Bank, 69^ ; MetropoUtan Bank, 70 ; Erie, 10| ; Reading, 27. Among 
 the failures announced to-day are Mellis & Ayres, Blake & Brown, Bulkley & 
 Co., all dry goods ; Mark J. King, furs, and several others. 
 
 Oct. 8th.- — Bowen & McNamee suspended ; also, W. G. Lane & Co. Great 
 panic, and very numerous failures. N. Y. 6s, 90 ; Metropolitan Bank, 60 ; 
 Am. Ex. Bank, 65 ; N. Y. Central, 52 ; Reading R. R., 27 ; Ilhnois Central, 80. 
 
 Oct. 9th. — The Harpers suspended. Run on the Park Bank for a few hours. 
 Bowery Bank suspended after a run. Meeting of Bank officers at the Insur- 
 ance Buildings; no concert agreed upon, and no result of the meeting. Fail- 
 ures numerous and very heavy. N. Y. Gs, 91 ; Ilhnois Central Bonds, 65 ; 
 * MetropoUtan Bank, 60 ; Bank of Commerce, 70; N. Y. Central, 52; Erie R. 
 R., 9i ; Harlem, 7. 
 
 Oct. 10th. — Erie Railroad Company, Michigan Central, and Illinois Central 
 failed to meet their engagements. Failure of John N. Genin, Seymour & Co., 
 Corning & Co., and a score of others. Run on several of the Savings Banks 
 General panic and paralysis. By far the worst day of the revulsion, thus far. 
 Erie, 7^ ; Metropolitan Bank, 58 ; N. Y. 6s, 91 ; N. Y. Central, 53; N. J. R. 
 R., 100 ; Bank of Commerce, 68J. 
 
 Oct. 11th.— Sunday. 
 
 Oct. 12th. — Grocer's Bank stopped. At the Clearing House, to-day, the of- 
 ficers of the New York banks formally declared a resolution to maintain specie 
 payments to the last. Complete anarchy in the stock market. Erie 8. 
 
 Oct. 13th. — The end ! ! At ten in the morning, a run of depositors for gold 
 began on all the weaker banks in New York, and, before the hour of closing, 
 the following were compelled to suspend : — Broadway Bank, Ocean Bank, 
 
CAUSE OF THE REVULSION. 43 
 
 Irving Bank, Leather Manufacturers' Bank, North River Bank, Merchants' 
 Exchange Bank, Marine Bank, New York Exchange Bank, St. Nicholas Bank, 
 Butchers' and Drovers' Bank, Tradesmen's Bank, Artisans' Bank, Citizens' 
 Bank, Bull's Head Bank, Chatham Bank, People's Bank, Market Bank, Bank of 
 New York, and the Hudson County Bank, Jersey City. In the evening at a 
 meeting of Bank officers, it was ascertained that the total amount of gold in 
 the remaining banks was Httle more than five and three quarter milHons, and 
 it was agreed to suspend. The excitement throughout the city is too fresh 
 in every one's recollection to require remark. 
 
 Oct. 14th. — All the city banks suspended except the Chemical, which also 
 held out in 1837. Suspension in Boston, etc. 
 
 
 PRICE OF ] 
 
 ?LOUR. 
 
 
 
 
 
 Oct.l, 1856. 
 
 Oct. 1, 1857. 
 
 Decline. 
 
 Superfine State, 
 
 - 
 
 - $6 50 
 
 $4 50 
 
 $2 00 
 
 Extra State, 
 
 . 
 
 - roo 
 
 4 75 
 
 2 25 
 
 Western Superfine, - 
 
 . 
 
 . 6^75 
 
 4 50 
 
 2 25 
 
 Extra Western, - 
 
 - 
 
 - 1 10 
 
 5 50 
 
 1 60 
 
 Canadian extra, - 
 
 - 
 
 - 7 60 
 
 5 50 
 
 2 00 
 
 Southern extra, - 
 
 . 
 
 - 8 00 
 
 5 65 
 
 2 35 
 
 Georgetown, &c., 
 
 - 
 
 - 9 00 
 
 5 60 
 
 3 50 
 
 THE VICISSITUDES OF COMMERCE. 
 
 A few months since, the partner of a commercial house in this city was ta- 
 ken to a lunatic asylum, utterly deranged, as was said, by his unparalleled 
 prosperity in business. During the year previous his firm had cleared 
 $1,300,000. He died in the asylum, and his own estate was valued at 
 $2,500,000, all invested in the concern of which he was a partner. The firm 
 itself failed the other day, and is now said to be utterly insolvent. One item 
 of the assets of the deceased's estate was a thousand shares of the Illinois 
 Central Railroad stock, which was seUing at the time of his decease, at $140 a 
 share, and which was worth, after paying up the instalments, $800,000. The 
 same property sold yesterday at public sale at $50,000. 
 
 All this occurred within eighteen months — the prosperity, the insanity, the 
 decease and the insolvency. — Evening Post. 
 
 THE NUMBER OF FAILURES. 
 It is not possible to arrive at the whole number of failures during the last 
 eight weeks. About 260 have been reported, but, including those not report- 
 ed, and those of too little importance to be reported, it is probable that not 
 less than 500 houses have failed since the pressure began. The entire habili- 
 ties of these houses are certainly not less than 60 millions of dollars. 
 
 THE CAUSE OF THE REVULSION. 
 
 For every general revulsion, like that of 183Y and 185^7, there are remote 
 
 causes as well as the immediate and exciting cause. The immediate cause of 
 
 the present revulsion is known to every one. It was the bank expansion of 
 
 the last summer, succeeded by the sudden contraction of the past few weeks. 
 
44 HOPE FOR THEJFUTURE. ,^ 
 
 The practical effect of the'contraction, here'and elsewhere, has been to reduce 
 the quantity of money in circulation by more than 200 millions of dollars ! 
 Hence, the scarcity of the article — hence, the bankruptcy, the panics, the 
 paralysis. 
 
 But the remote and real cause of this, and every other genuine business 
 revulsion, is a previous destruction of value^ which the credit system has miti- 
 gated and concealed. This previous destruction of value has been owing to the 
 following causes : — r ' :? -v? 
 
 Unprofitable railroads. ■ ~ -^ :: v^; r;;;^ 
 
 Railroad financiering to sustain companies really bankrupt. ™f'-y-^^ 
 Falling off in emigration from one-third to one-half. '?^- 'v!'^^ 
 
 Stagnation of the shipping interest since the termination of the Crimean 
 
 war. 
 Excessive building of dry goods and other palaces in New York, Chicago, 
 
 and other cities. 
 General unprofitableness of trade with California for two years. 
 Extremely ^embarrassed manufacturing interest for two years. Many 
 
 establishments in New England run at a loss. 
 Excessive importation of ornamental goods from Europe. 
 Suicidal importation of useful articles which ought to be made here. 
 Land speculation in the West for the last five years. 
 Abuse of the credit system — (credits of 6 and 8 months must be abo- 
 lished.) 
 Ladies' voluminous, costumes causing the waste of perhaps one hundred 
 
 milHon yards of valuable goods. 
 A too rapid absorption of the Western lands — leaving half a dozen 
 I states behind to get to Kansas, Nebraska, etc. 
 
 "■ General neglect of the homelier and manlier occupations, particularly 
 farming ; and excessive fondness of the meaner callings — such as store- 
 keeping, banking and speculation. 
 Loss of two millions in the Central America. 
 
 HOPE FOR THE FUTURE. 
 
 *' What resources have we abroad to depend upon ? And what aid can 
 Europe give us during the coming year ? These questions are of vital import- 
 ance, and will be asked and answers given in domestic as well as commercial 
 circles. 
 
 *' We can best resolve the problem by a consideration of the effect of the 
 panic of 1837 upon our foreign trade. Not that our troubles are as great, but, 
 they are of a similar kind ; otherwise the comparison would not hold good. 
 We give some statistics illustrating the changes at that time in our foreign 
 trade, and from this we can form some estimate of our foreign trade for the 
 next year. * 
 
 Statement of Foreign Commerce of the United States for a Series of Years, 
 
 Years. Exports. Imports. 
 
 1836. - - . - $128,600,000 190,000,000 
 
 1S40. .... 132,000,000 107,000,000 
 
'T^^ EXPANSION AND CONTRACTION OF THE N. Y. BANKS. 45 
 
 l^'Trom this we see the exports in four years increased four millions, while 
 the imports decreased eighty-three millions, or showing an improvement in 
 our foreign balance of eighty-seven millions of dollars. The reaction, that 
 took at that period four years to produce, will now be produced in twelve 
 months. 
 
 *' The Commerce of the United States for the fiscal year 1836, was as fol- 
 lows :— exports, $327,000,000; imports, $313,000,000. The decrease in im- 
 ports from 1836 to 1840, was 48 per cent, and the increase in exports was 3^ 
 per cent. Applying the same per centage of increase and decrease to the 
 trade of 1856, our commerce for the present fiscal year would be as follows : 
 
 Year 1857-58 I ' " 
 Exports, - - - - $487,000,000 
 
 Imports, :; . - - - 286,000,000 
 
 Balance in our favor, - - $151,000,000 
 
 Add Cahfornia Gold, - - 40,000,000 
 
 :. $191,000,000 I 
 Debt due Europe, - - " • 40,000,000 
 
 Balance, .... fl51,000,000 
 
 *' From this we see that if Europe remain solvent the balance due us, after 
 paying the debt which is now due to Europe, will be over one hundred and 
 fifty millions of dollars. 
 
 *' This is an under estimate of our exports. The Emperor of France has 
 just issued an edict forbidding the export of grain from France. The imports 
 of cotton into Great Britain from India this year will be nominal. Great 
 Britain will want our flour and provisions for her Indian army. Enough has 
 been given to show that our exports must increase, and our imports are sub- 
 ject to our own control. Europe must have our cotton and breadstulFs, and 
 India our provisions. The gold from CaUfornia must stay with us. This aid 
 we did not have in 1837, and is in itself alone sufficient to ensure our re- 
 covery. — Courier & Enquirer. 
 
 EXPANSION AND CONTRACTION OF THE NEW YORK BANKS IN 1857: 
 
 Liabilities, consisting of 
 
 1857. Deposits and Circulation. Specie. 
 
 Januarys- • -$104,000,000 $11,172,000 
 
 April 4-- - - • 106,000,000 11,638,000 
 
 July 3 - - - - 108,000,000 12,839,900 
 
 August 15 - - - 101,000,000 11,360,900 
 
 August 22 - - - 98,000,000 ' 10,197,000 
 
 August 29 - - - 93,000,000 9,201,000 
 
 September 5 - - 88,000,000 10,227,000 
 
 September 12 - - 85,000,000 12,181,000 
 
 September 19 - - 84,000,000 13,556,000 
 
 September 26 - - 81,000,000 13,327,000 
 
 October 3 - - - 76,000,000 11,400,000 
 
 October 10 - - • 71,000,000 11,476,000 
 
 The circulation varying very httle from $8,000,000. The increase or dimi- 
 nution of discounts is shown in the deposits. 
 
46 HENRY WAKD BEECHER OX STOCK GAMBLING. 
 
 CHAPTER VIII. 
 
 OPINIONS OF DISTINGUISHED PERSONS AND PRESSES, AS TO THE CAUSES 
 OF THE PRESENT REVULSIONS. 
 
 The pulpit and press have teemed with suggestions and explanations re- 
 specting the present difficulties. We select the following, leaving the reader 
 ^0 make his own reflections upon them. 
 
 Horace Greeley upon the Causes of the Revulsion. 
 
 " 1. Reduction of duties~by the Tariff of 1846, stimulating importation of 
 foreign Metals, Wares and Fabrics at the expense of Home Manufactures. 
 
 "2. Constant and heavy increase of our indebtedness, foreign and domestic. 
 The Iron which 'our artisans should have made being purchased abroad. State 
 stocks, Railroad bonds and private credits were sent abroad in payment for 
 it. This increase of our foreign debt strongly stimulated a corresponding ex- 
 pansion'^f credit at home. Railroads being constructed with the proceeds of 
 bonds sold in Europe, the merchants living near their several lines bought goods 
 in the great seaports on credit, the products of their vicinity were consumed by 
 the Railroad laborers, and there was nothing but Railroad bonds with which 
 to pay for the goods. These were sold somehow, and part payment made ; 
 but the indebtedness of the interior to the seaboard, of the seaboard to Europe, 
 was constantly increasing. At last, the market for bonds was glutted ; no 
 more could be sold, even by the cord, and — you see what inevitably followed." 
 
 HENRY WARD BEECHER ON STOCK GAMBLING. 
 
 "There is no more sin in buying and selling stocks than in buying or selling 
 bank bills, or any species of property. But it is one thing to buy and sell 
 legitimately, and another to buy and sell as gamblers do. 
 
 " Many honorable men pursue an honorable business in the.brokerage of 
 stocks. But it is quite notorious that . millions and thousands of miUions of 
 dollars of stock are sold every month under the lawful forms of the Stock 
 Brokers' Exchange, which can be shown to differ in no moral or material re- 
 spect from undisguised gambUng. It is not necessary to enter minutely into 
 the distinctions between right and wrong in buying or seUing of stocks. It is 
 enough to say, that he who buys stock as a bona fide method of investing his 
 funds, looking for dividends, or for some benefit from the interest represented 
 by the stock, buys legitimately and without moral blame. But that whole 
 scheme of buying stocks for no other purpose than to make money upon the 
 bet that they will rise or that they will fall, is a scheme of gambling. Men 
 that do it are gamblers. All the soft names on earth cannot be dissolved to 
 make a varnish strong enough to cover the real wickedness. Men will resent 
 the imputation. No man hkes to be called a gambler. But the way to avoid 
 the title is to avoid the thing. 
 
 " In this gambling game the whole community have more or less partici- 
 pated. Some devote their time to it. Since my day, I remember, I think, 
 one concern to have failed four times — it fails to-day, is on its feet to-morrow, 
 in as good credit as ever. For when the business is a fraud, and the customs 
 of it are dishonesties, it does not take a man long to repair any little cracks 
 in his reputation. 
 
THEODORE PARKER OX THE REVULSION. 47 
 
 "Merchants are forsaking their legitimate business and dabbling in this 
 pool. Their clerks following their example, gamble too. Simple men, seeing 
 these marvels of success, venture their hard earnings, and go to gambhng 
 likewise. The law^yer follows suit ; and that there may be no want of moral 
 -s-anctity, ministers of the Gospel are fouad, not a few I am informed, secretly 
 buying and selling stocks. 
 
 "Now, when the company themselves are gfgdntic speculators by fraudulent 
 and dishonest means ; and when the stock of the company goes up and down 
 the street, carrying in its hand a bowl drugged with gambhng, and crowds 
 rush to drink its intoxication, is it strange that, at length, the head is sick, the 
 whole body faint, and that the commonwealth Ues at length upon the ground, 
 wallowing like one possessed, foaming and rending itself? 
 ^." It is supposed that there are one thousand million dollars invested in rail- 
 way property. Can this mountain of power be used against good morals, 
 against commercial prudence, and the country not reel and stagger ? Can this 
 prodigious weight be cast rudely hither and thither upon the deck, and the 
 keel lie level ? There is not an honest man in the land, patiently conducting 
 a legitimate business, who is not in the power of these irregular forces. There 
 can be no permanent security, if financiers can, at pleasure, draw up such 
 enormous elements of powxr, and hold them suspended, like water spouts, to 
 burst and flood down desolation, the moment they are touched with mis- 
 fortune. And if commercial men will not draw tight the reins of morals upon 
 these unprincipled men, they will have their own neglect to thank for the 
 mischiefs which will have come upon them in some sense by their connivance." 
 
 THEODORE PARKER ON THE REVULSION. 
 
 " There is great extravagance of expenditure. Perhaps no minister Avas less 
 severe on the indulgence in luxuries than he was, because he saw the functions 
 they performed ; and, besides, he never saw a house too comfortable for men 
 and women, or dresses too elegant, though he had seen a great many houses 
 and dresses too costly for the wearer's means. Look at the general style of 
 dress among women — its exceeding costhness ; not only among our rich, but 
 everywhere, except among the very poor, who would, but cannot. The fault 
 is not with the women, who bear all the blame, and are the butts alike for the 
 satirist's wit and the "minister's dullness. If men wished women to be clad in 
 sackcloth, it would be done before to-morrow night ; for though woman has 
 a greater love of decoration than man, it is far less than her desire to please 
 him. And, indeed, the very love of dress is with her more a love of pleasing 
 others than a feeling of self-satisfaction. Then comes the increased cost of 
 ships, houses, shops, banks, offices, and the hke, which renders the transaction 
 of business more costly. Then there is the increased expense of city, town 
 and State governments, and the foolish and wicked waste of municipal money. 
 Though the property of Massachusetts has increased tenfold within a few 
 years, the ratio of taxation has doubled, and in some cases trebled. Then 
 there are the idlers. In the town of Somewhere lives Mr. Manygirls. He is 
 a toilsome merchant, his wife a hard-working housekeeper. Once they were 
 poor, now ruinously rich. They have seven daughters, whom they train up 
 in utter idleness. They are all do-nothings. They spend much money, but 
 not in works of humanity, not even in elegant accompUshments, in painting, 
 dancing, music and the like, so paying in spiritual beauty what they take in 
 material means. They never read nor sing ; they are know-nothings, and 
 only walk in vain show, as useless as a ghost, and as ignorant as the block on 
 which their bonnets are made. Now, these seven ' ladies,' (as the newspapers 
 call the poor things, so insignificant and helpless,) are not only idle, earn 
 nothing, but they consume much. What a load of finery is on their should- 
 ers and heads and necks. Mr. Manygirls hires many men and women to wait 
 
48 ^^^ill^; THEODORE PARKER ON THE REVULSION.^ 
 
 on his daughters' idleness, and these servants are withdrawn from the pro- 
 ductive work of the shop or the farm, and set to the unproductive work of 
 nursing these seven great grown-up babies. 
 
 ** On the other side of the way, Hon. Mr. Manyboys has seven sons, who 
 are the exact match of the merchant's daughters— rich, idle, some of them 
 dissolute — debauchery coming before their beard — all useless, earning noth- 
 ing, spending much and wasting more. Their only labor is to kill time, arid 
 in summer they emigrate from pond to pond, from lake to lake, having a fish- 
 ing-hne with a worm at one end and a fool at the other. These are the first 
 famines in Somewhere. Their idleness is counted pleasure. Six of these 
 sons will marry, and five, perhaps, of Mr. Manygirl's daughters, and what 
 families they will found, to live on the toil of their grandfather's bones, until 
 a commercial crisis, or the wear and tear of time has dissipated their fortune, 
 they are forced reluctantly to toil ! 
 
 "Besides, there is an enormous waste of food, fuel, clothing, of everything. 
 We are the least economical civilized people on the earth. Of course, the poor 
 are wasteful everywhere. They do not know how to economize, and they 
 have not the means. They must live from hand to mouth, and half of what 
 is put into the hand perishes before it reaches the mouth. So likewise are 
 the rich wasteful who have inherited money — almost never such as have earn- 
 ed it. The great mass of the people are not economical, but wasteful — it is 
 the habit of the whole country. 
 
 " The next cause is the rashness of experiment, leading men to engage in 
 enterprises not well plamaed, and which turn out ill ; cost much and come to 
 little. Hence come attempts to develope new forms of industry, or old forms 
 in new places ; the building of railroads in advance of population, or in ad- 
 vance of business, and the great increase of shipping. But this is a failing 
 that ' leans to virtue's side.' 
 
 *' Then the spirit which prevails in our trade is not a very honest one. He 
 would not say that we were worse than other nations ; he was sure we were 
 better, juster, more honest than our fathers were 100 years ago. The wealth- 
 iest merchant who did business in this city 60 years ago, would not be tole- 
 rated on 'Change a single day. But look at the defalcations of men intrusted 
 with public funds — look at the great swindlings by officers of railroads and 
 banks — remember how lightly all these things are passed over, and how very 
 seldom a great thief gets punished at all — remember that men fail in trade, 
 leaving half a million of debt, and one-tenth of a million to discharge the 
 debt — remember how the Pacific Company put $1,600,000 in gold of other 
 men's property, and 600 of their living bodies into a ship, with only ^x boats, 
 and no pump that could throw water — in a ship that had a reputation so bad 
 that she could not be kept afloat without changing her name, and making the 
 George Law the Central America — and then you see what a spirit there is in 
 our trade. 
 
 " Our system of buying and selling is a very bad thing. It encourages ex- 
 travagance by putting off pay-day ; it makes the transaction of business more 
 expensive, by necessitating a great number of clerks ; it gives opportunity to 
 temptation and fraud ; it produces a general unsoundness in trade, and so in- 
 creases the cost of every pound of bread we eat, every inch of cloth we wear, 
 every brick we pile into our walls, and every slate which roofs our houses. It 
 seems to be cheap, it turns out to be dear. 
 
 *' Here is another cause — the great and controlling one. We make money 
 out of what has no intrinsic value — out of paper. All property is the product 
 of labor. To distribute from the producer to the consumer, there must be 
 trade. For that, there must be money, which is simply the instrument of 
 trade — a labor-saving machine to promote buying and selling. After much 
 experimenting, mankind has taken gold and silver, and thereof made money, 
 the instrument of trade, the medium of commerce. Gold and silver are pro- 
 
THEODORE PARKER ON THE REVULSION. 49 
 
 perty, and so represent the labor requisite to acquire them ; they are trans- 
 ferable property, and, of course, subject to the laws of property ; they rise 
 and fall in value, and no legislation can prevent that, any more than iron or 
 tin ; yet, commonly they fluctuate less than any other substance that could be 
 chosen. They are condensed property. And not only are they the medium 
 by which debts are paid, but they are the standard measures of all value. 
 Gold or silver made into coin has no more valiTe than before. At the mint 
 the government puts a stamp upon it, which is simply a national certificate 
 that it has a certain purity, or comes up to a certain weight. It is a certifi- 
 cate of value, not a creating of value. 
 
 "Now, in America, we make fictitious money out of a piece of paper, which 
 contains somebody's promise to pay a dollar, and this becomes an instrument • 
 of trade, by which debis are paid, nnd the standard measure of value. Unlike 
 the metallic dollar, the paper dollar has no intrinsic worth — is not property, 
 only the lawful representative of property. We have chartered some twelve 
 or thirteen hundred banks in the United States to manufacture this substitute 
 for metallic money^ on condition that when the paper is brought back, they 
 shall pay a metaUic dollar for it. A bill, which is a promise to pay, is taken 
 in payment of debts, said to be as good as gold ; a certificate of debt is taken 
 instead of a certificate of property. As there is little demand for metallic 
 money, that is carried off. Like all other merchandize, it brings the highest 
 price where it is needed and used the most. It is not to be denied that there 
 is a certain convenience in this, especially attending large transactions ; but 
 in using it in small sums, there is this great inconvenience. As paper costs 
 little labor, and is yet taken for the representative of value, and so a certifi- 
 cate for labor done, it is multiplied to a great extent. Then money is cheap 
 and prices go up. The farmer gets two dollars for his bushel of corn — that 
 is, he gets the promise to pay two metallic dollars. Wages rise ; the laborer 
 gets more paper money for his work, but his grain, cloth and coal also rise, 
 and he gets no more value than before. Accordingly, as prices rise, it costs 
 more to manufacture than before, and so we import the products of labor 
 fram abroad, where there is little paper money, and prices are low. 
 
 " As we feel rich, because money is plenty, and all men say it is as good as 
 gold, we import largely articles of comfort and luxury, and send abroad our 
 raw materials in, payment, to be brought back manufactured goods. But by 
 and by the raw material is not quite adequate to pay our foreign debts — for 
 our paper money is good for nothing abroad ; our foreign goods, sold at paper 
 prices, must be paid for in metallic money — and specie runs out of the coun- 
 try. Then the banks, not having the actual metalHc money to pay, refuse to 
 circulate their bills ; money becomes ' short,' ' tight,' — there is a pressure in 
 the market ; money is worth more than before, goods are worthless ; mer- 
 chants who have bought goods on credit, and sold them on credit, cannot 
 meet their payments, and, accordingly, must sell their permanent property to 
 meet their payments, or else pay enormous rates of interest — for money is 
 merchandise, and, when scarce, like bread in a besieged city, it goes up to 
 famine prices. Stocks fall in value ten, twenty, thirty, forty, even fifty per 
 cent. Capitahsts become distrustful, and even refuse to loan at all. Traders 
 fail, and give up their permanent property to their creditors ; it is sold at a 
 reduced value ; the trader loses half, but the creditor is only half paid. 
 
 " The inheritance of birth, the earnings of a long life are at once swept 
 away. In his old age, the thrifty merchant is left with nothing. Timid men 
 withdraw their money from circulation ; it lies still, and an idle dollar is just 
 as useless as an idle spindle, or an idle axe. Great enterprises stop. Men 
 are thrown out of employment. Hunger looks through the windows of a 
 thousand homes, making ugly mouths at wives and babes. 
 
 '* We take great pains to prevent this evil. We try legally to fix the value 
 «f this paper money we have created, and threaten to punish every man who 
 
50 WHAT THE BANKS HAVE DONE. 
 
 loans it at more than six per cent. We might as well say that water should 
 not run down hill. We have tried to make that money which is no money, 
 which represenste no labor done, and we cannot escape from the consequences 
 of our first false principle. We wonder that specie does not stay in the land ; 
 it is because we think paper money is just as good, and France and England 
 do not. It rains gold, and we hold out our dish bottom upwards — of course 
 it is empty. We complain that there is a lack of specie in our country. In 
 the last twelve months we have exported more than sixty-nine milUons of 
 gold from this very land." 
 
 ilEV. DE.. CHEEVEr's OPINION. 
 
 *' God had never put into any nation's framework better machinery than he 
 put into this nation, but when the fires of prayer, Und truth, and honesty 
 go out, the machinery ceases to work, and there is no hope left. Their only 
 hope now was in prayer. WealtR could not save them ; experience could 
 not save them ;'the constitution could not save them, especially when misin- 
 terpreted and tortured. Nothing could save them but God. God saves by 
 his word, and by obedience to his word — not by adding his word to the shelves 
 of a bible society, Jbiit by obedience to his word. That is what God desires to 
 see ; and he will see it or this people will go to destruction.'^ 
 
 THE CAUSE AGAIN. 
 
 *' When a man earns more than he spends, he is sure to grow rich, and his 
 circumstances are easy. So it is with a nation. Let us look a little to our 
 trade for the past twelve years. In this time we have sent out of our country 
 $353,3'73,980 in hard money, or gold, which is the basis of all credit. We have, 
 in the same time, imported $92,166,864 of money, leaving a difference of 
 $261, 267, 116 sent out of the country in twelve years last past, over and above 
 what we have brought into it. What spendthrifts we have been ! We last 
 year imported $360,890,141 of goods, mostly manufactured articles. In the 
 article of dry goods, we imported $80,000,000 ; why have not our factories 
 made these articles ? Because our exchange brokers and foreign traders, and 
 those who own slaves, have told us not to do it. We have obeyed the Slave 
 power, and hence distress has come upon us. If we look at our iron trade, we 
 find that in the last twelve years we have imported 4,070,330 tons of railroad 
 iron alone ; which at $55 a ton, amounts to $223,867,216, gone out of the 
 country for one article — not a pound of it but should have been made by our 
 own people ; we want railroad iron brought into the country no more than we 
 want paving stones. Every ton of iron contains twenty -five days labor ; would 
 it not be a good thing to take this iron out of our own mines ? But our 
 brokers and foreign traders hare persuaded us to send abroad for this iron, 
 which has been the means of taking so much money out of the pockets of 
 our people. We now find 750 ships and vessels lying up idle in our own port 
 of New York, such is the paralysis of the trade to foreign countries ; we have 
 no money, and we are all thrown out of employment t we have sung the song 
 of free trade until our people, our manufactories, our shipping, all have be- 
 come involved in one general ruin." — Times. 
 
 WHAT THE BANKS HAVE DONE. 
 
 *' We have only to look at the floating debts of our leading railway compa 
 nies to form a pretty good idea of the way our banks have disposed of their 
 money. The mercantile classes have not been the recipients of their usual 
 portion of bank loans. The railroads could affor^ to pay better prices for 
 money, and they therefore had the preference. The floating debt of the 
 
NATHAN APPLETON'S OPINION. 51 
 
 Michigan Southern Railroad Company amounts to about $2,000,OoO ; the Erie 
 Company, $2,000,000; Cleveland and Toledo, 750,000; Hudson River Rail- 
 road, $500,000 at least. Illinois Central, $8,000,000, Michigan Central, $1,800,- 
 0(M^ ; and others prominent in this market to full five millions more — making 
 a total of $16,000,000, the bulk of which is held by the banks in this city. 
 Their resources to this extent are locked up i^ 4ihese securities, and not many 
 weeks since, with this revulsion right upon us, the Erie Railroad Company 
 raised from certain banks fn Wall street, $6000,000 more. Instead of lending 
 money to the full line of their loans to the commercial classes doing a legi- 
 timate business, the banks have locked up full |1 5,000,000 in railroad accept- 
 ances, which are not worth on an average forty cents on the dollar. We 
 have in this fact the ^rst great cause of the collapse. — Herald 
 
 BANK ARISTOCRACTS. 
 
 "We suspect that one of the great causes of the mischief lies in the ine- 
 quality of our banks, the President of the larger banks putting on aristocra- 
 tic airs, and compelhng the smaller institutions to follow their bidding. There 
 is a very great difference in these institutions ; the head of five millions of dol- 
 lars very naturally looks down with a feeling of contempt upon the represen- 
 tative of only half a million. It would be greatly for the benefit of the com- 
 munity if our banking institutions were more nearly on a level, as to the 
 amount of their capital; there would] then be fewer of them, and our bank 
 Presidents would act together on terms of greater equality." — Herald. 
 
 NATHAN APPLETON's OPINION. 
 
 " I have for many years beenVith drawn from active business. I have been 
 merely a looker on, but not unobservant of the course of trade, and especially 
 of our banking operations. 
 
 " Our system of currency is a delicate one. It is founded on bank credits, 
 resting on a very moderate basis of coin. When perfectly balanced, it works 
 very well, but a slight derangement may produce a great deal of mischief. 
 The great disturbing cause is a demand for ^specie^for export, which can only 
 be checked by a contraction of the bank credits. During the present year 
 we have been going on very smoothly, under full sail, when about the middle 
 of August, a sudden squall strikes us, which continues to increase to a terrific 
 hurricane, threatening even to swamp the ship itself. The question arises, 
 How comes all this about ? what is the cause ? 
 
 " New York is the great central banking power. She sets the key-note to 
 the whole country. If she expands, the whole country expands. If she con- 
 tracts, it is felt to the remotest extremities. It is a tremendous power — that 
 of increasing or diminishing the circulating medium of the whole country. It 
 is a deep responsibility, and demands sound discretion and much wisdom in 
 its regulation. Unfortunately there appears to be no unity of action, no control 
 ing principle, in the management of this power. It is divided between fifty- 
 five banks, each acting its own separate part, under the influence of different 
 opinions and different interests. Banks are public institutions ; they are found- 
 ed for the public good; and the duty of consulting the good of the commu- 
 nity in the use of their great power is as sacred as that of providing for their 
 own safety. There is, apparently, no individual of sufficient influence to bring 
 this heterogeneous mass to unity of action in a crisis like the present, as was 
 Albert Galatin, while he lived. 
 
 '* The circulating medium of the city of New York consists in the liabili- 
 ties of her banks in the form of deposites and circulation. Their daily loans 
 -and discounts increase or diminish these liabilities. As these liabilities are 
 greater or less, is money plenty or scarce. They constitute the fund out ot 
 which all operations must be performed. 
 
62 PRACTICAL SUGGESTIONS. 
 
 ''''Hunfs Merchants' Magazine contains tables of the weekly returns of the 
 banks of the City of New York for the years 1856 and 1857, which furnish a 
 complete view of their operations. They throw a flood of light on the pres- 
 ent state of things. The return for January 3, 1857, shows one hundred and 
 four millions of Habilities, with $11,1Y2,000 in specie. * 
 
 "This varied very little from the returns of the preceding six months, and 
 this state of thhigs continued with little change, but with a sUght tendency 
 to increased expansion, up to the 15th August. The greatest expansion was 
 on the 2d of May, when the liabilities were 108 miUions, with 12 millions of 
 specie. The returns of 15th August shows 101 millions of Habilities and 
 11,360,000 specie. From this a rapid contraction commenced, the liabilities 
 being reduced on 5th September to 88 millions, with 10,227,000 of specie. 
 Here the contraction ought to have ceased. The object was to stop the ex- 
 part of specie. That had been done. Exchange on London had fallen below 
 the point at which specie could be shipped without loss. Can any mortal 
 man give me a reason, or an apology, why contraction should continue a day 
 after this point had been reached ? The banks were then stronger than they 
 had been for two years. But contraction did continue until, on the Sd Octo- 
 ber, the liabilities had been reduced to 76 milHons — thus reducing the circu- 
 lating medium of New York City, from July, 32 millions, or upwards of thirty 
 per cent. Tremendous ! Was the like ever known in the history of bank- 
 ing ? I have no hesitation in saying, it is this continued contraction of the 
 New York banks, since the 6th of September, without the slightest necessity, 
 which has brought about the present disastrous crisis. 
 
 " There was no decided overtrade. There was no speculation, except by a 
 few houses in sugar. There was, no doubt, an excess of imports, but no 
 greater than for several years, and the effect of these was wholly cured on 
 the 5th September, by the rate of exchange on London. Why continue con- 
 traction further? Was not 88 millions, with lOj millions of specie, being 
 11 J per cent., as safe a position as 104 millions in January, with 11 mil- 
 lions of specie, or 11 per cent, on their liabilities? 
 
 " There is but one answer: The New York banks have been acting under 
 a panic, and that panic they have communicated to others, until there is 
 almost a total loss of confidence: The consequences are before us, in the 
 paralysis of all trade from Bangor to New Orleans, the stoppage of banks 
 through a great part of the United States, the stoppage of factories, the dis- 
 charge of thousands of laborers, the inability to bring our large crops of 
 produce to market, the ruinous rate of two or three per cent, per month on 
 the strongest paper, a ruinous depreciation in the price of all stocks, and 
 even on exchange on London. In my whole experience I have never known 
 a crisis so severe as the present, and, I must say, so wholly uncalled for. 
 
 CHAPTER IX. 
 
 PRACTICAL SUGGESTIONS FOR CURING AND ENDURING THE PRESENT 
 TROUBLES. 
 
 From the thousands of valuable suggestions respecting the cure, preven- 
 tion, aYid endurance of Financial Revulsions, which have appeared during the 
 last few weeks, we present the following : — 
 
PRACTICAL SUGGESTIONS. ^- 6.'^ 
 
 PRACTICAL SUGGESTIONS. 
 CARRY LESS SAIL. 
 
 Men must learn that fortunes are the reward of a life of economy, thrift, 
 and industry, and that small and certain profits are better than speculations, 
 usurious bargains, and stock gambling. Move out of the big houses ; sell the 
 lace, satin, and damask, which you have purchased with money that should 
 be invested in your business ; discharge the coachman and unnecessary house- 
 servants ; take the silk and satin off the girls, and let the boys walk ; pay 
 your debts ; keep within the limit of legitimate business, and we shall hear 
 of no revulsions, nor panics that you cannot meet, without fear and without, 
 reproach. 
 
 PAY ALL YOU CAN. 
 
 If we cannot pay to-day, let every man forelay a little, and try to pay to- 
 morrow. No man should, in these times, be inexorable, and, in the madness 
 of desperation, oppress his neighbor ; while, on the other hand, none should 
 presume too strongly, either on the ability or kindness of those to whom he 
 -is indebted. Let every one try and do his duty. If he cannot pay all, let 
 him, at least, try and pay something ; for every dollar paid is a positive relief, 
 so far as it goes ; and when all the dollars are paid, every one will breathe 
 freer, confidence will be restored, and business will begin to flow with re- 
 newed activity through all its accustomed channels. 
 
 HALF A LOAF BETTER THAN NO BREAD. 
 
 Manufacturers, whose resources are nqt sufficient to carry them through 
 the winter without the certainty of stoppage, would do well to commence 
 their retrenchments at once, so that they may be enabled to avoid that dis- 
 tressing necessity. By putting their men on half-time now, they will be able 
 probably to pass safely through this critical period, and thus afford to a large 
 body of industrious mechanics some resource against starvation. This would 
 be better than continuing a month or two longer in full operation, and then 
 stopping short, when the rigors of the winter would render the effects of the 
 suspension disastrous to a number of poor families. 
 
 MECHANICS THIS WINTER. 
 
 To mechanics we say : Practice for a time the most rigid economy— deny 
 yourselves everything that your necessities do not absolutely call for — spend 
 no money on superfluous dress or idle junketing — recollect that the lives of 
 your wives and children depend upon your foresight and economy. Every 
 dollar spared now will be worth ten when the horrors of a such a winter as 
 that which we have reason to anticipate will come upon you. The mechanic 
 who^ gratifies unnecessary tastes or appetites in presence of the dangers 
 which are threatening his family, we look upon as criminal. 
 
64 PRACTICAL SUGGESTIONS. 
 
 THE WINTER IN THE CITIES. 
 
 As the large cities are likely to suffer most, from the number of sufferers 
 who will crowd in upon them during the pressure of the severe season, the 
 municipal authorities should everywhere take care to anticipate, as far as 
 possible, the heavy calls that will be made upon them. Thus, wherever there 
 are works in contemplation which are likely to give employment to the labor- 
 ing population, steps should be taken to complete the arrangements for put- 
 ting them into operation. It is better to pay large sums for useful, or even 
 ornamental works, than to have to dole them out in eleemosynary aid. By 
 facing the difficulties that threaten us manfully, and making timely provision 
 for them, we may pass over the winter without having to lament any extra- 
 ordinary aggravation of suffering. 
 
 KEEP OUT OF NEW YORK. 
 
 Business of every sort is stagnant here, as it is everywhere else. Manufac- 
 tories and workshops are either closed or more than supplied with hands 
 already. There is not a job to be done which has not already at hand twice 
 the number of workmen required to complete it. Keep away from the city, 
 then. Stay where you are known, and where you can struggle through the 
 impending want of winter, with at least some friends and acquaintances to 
 help you, or give you an occasional cheering word. 
 
 SELL DRY-GOODS ON FOUR MONTHS. 
 
 It is sufficiently obvious that the difficulties under which the commercial 
 world is laboring result, more or less, directly from the abuse of credit, and 
 that a very considerable share of that abuse occurs in the dry-goods trade. 
 The usual length of credit among this class of merchants is eight months, 
 while the importer's credit never exceeds five months, and in many cases does 
 not amount to so long a time. Therefore there is against the importer a balance 
 of three months' time — a very serious consideration — which is rendered more 
 so by the continual risk he undergoes in giving that amount of credit, which 
 enables the retailer to purchase goods for both the fall and summer trade 
 before paying for any. We are aware of the difficulties which beset a determina- 
 tion to alter an existing state of credit, but is it possible for any country to 
 do a safe business on so unsound a principle ? When will a better time than 
 the present present itself for our merchants to combine for their mutual 
 advantage ? Why not at once take measures to concert a combined reduc- 
 tion of their term of credit to four months, and form the nucleus of a really 
 sound business system? The railroad and telegraph have long since removed 
 the only excuse that ever existed for long credits, and the merchants may 
 as well profit by their past and present experience as wait for more of the 
 same sort. 
 
 SHORTER CREDITS. 
 
 How instantly would disappear the pressure under which this city is now 
 actually ground to powder if only half of the vast Western and Southern 
 indebtedness could be realized, or if it had never been stimulated by the pre- 
 posterous system of excessive credits. In those remote regions, every man 
 not a farmer is a merchant. He sets up business without capital in a store, 
 the rent of which is absolutely fabulous. He visits our city with letters intro- 
 ducing him as enterprising and industrious. Responsibility is not referred 
 to. Yet goods are crowded on him with a folly only matclied by that with 
 
FEAOTiOAL SUGGESTiOKS. ' i-,_ 55 
 
 which they are purchased. He buys double the amount he needs. Why not? 
 He has never kept store until now, and can have no correct guide from expe- 
 rience by which to regulate his purchases. He may be honest and deserving, 
 and intend to pay. But a deliberate swindler, who does not, can obtain the 
 same recommendations, presents them and his clean shirt together, obtains a 
 costly stock of goods with the same astounding faciUty, and forthwith van- 
 ishes into a fog which never lifts. The annudllosses from this class of men 
 are enormous ; yet the same loose system of credits receives no effectivQ 
 check. The honest buyer returns home with his stock, and soon discovers 
 that he is overloaded with goods that he cannot sell. The goods that were 
 foolishly forced on him in New York, he must force off on his neighbors at 
 home, and, to get rid of them, sells on a credit to people who may design to 
 pay, but who, when pushed for the amount, set up every form of procrastina- 
 tion. The farmers will not pay their bills because they have not sold their 
 wheat, and they refuse to part with it, because wheat happens to be down. 
 The storekeeper, having no capital of his own, has nothing with which to 
 pay ; and thus it is that country notes possess no convertible value. Our 
 merchants' pocket-books are plethoric with paper of this description. It is 
 convenient, as an evidence of debt, to be sued out. with less delay than an 
 open account upon the ledger, but it seldom appreciates to the dignity of 
 becoming even a collateral. What position can it assume at a crisis such as 
 this? Let us hope that among the hard lessons which the business commu- 
 nity here is now learning, it may learn caution in its credit system, and abol- 
 ish utterly the practice of these loose and indiscriminate ventures. — Tribune. 
 
 A lady's suggestion. 
 Sewing is a peculiarly appropriate feminine employment ; but it is an art, and 
 requires an apprenticeship. We propose, in these hard times, to fill up our 
 leisure, by learning to sew. We ought to have a law like thai among the Jews, 
 that every man shall have a trade, and add to it, that every woman shall learn to 
 sew. It would make us better and happier, while it is really almost necessary 
 to all. The rich would know the value of work, and how to direct it to be 
 done ; the poor would have added resources, for their support and means of 
 economy in the management of their own clothes. Much is now wasted 
 with them from careless and unskillful making ; and any one who has tried 
 it knows how difficult it is to find a good seamstress. Much of the mournful 
 drudgery, even such as gave rise to the famous " Song of a Shirt," arises from 
 their want of skill. A good seamstress once asked a poor woman how many 
 pieces of a certain kind of work she could make in a day? "Only twelve, at 
 a cent a piece." Starvation prices, would be the cry at once; yet the Seam- 
 stress took some, and made twelve in an hour, with ease. Here is the same 
 difference always found between a skillful and an unskillful workman. Now 
 is a good time for us all to learn to sew, not to take away work from the 
 poor, provided we have money to pay them, but in order to help ourselves, 
 and then to help others. Let it be an established fact, that a knowledge of 
 sewing is as essential a part of a woman's education — every woman's — as a 
 knowledge of reading ; more so, absolutely, than writing. 
 
 STUDY THE SUBJECT. 
 
 During the coming winter many of the producing classes will not probably 
 
£6 
 
 jokec^ and literature on the panic. 
 
 be called upon to produce anything. There will be plenty of time for read- 
 ing, and instead of squandering it in the perusal of wishy-washy novels, those 
 who are waiting for spring, and the work which we hope spring will bring 
 with it, should read the most approved works upon Trade and Currency. We 
 have purposely av«oided^recommending any particular course or doctrine. 
 Read all you can lay your hand on — Smith, Jacobs, Bentham, Mill, Cobbett, 
 Gouge, Carey. Read the Hard-Money men and the Paper-Money men, the 
 Free Traders and the Protectionists. Choose between them, guided by your 
 own good sense and experience, fully convinced that as to such matters every 
 American owes it to himself and to his family not to stand halting between 
 two opinions. No topics will be more fully discussed for some time to come 
 than those of Banking and Corporations ; and he will be a great way behind 
 the times, and hardly fit to vote for the Town Constable, who does not know 
 something about them. 
 
 CHAPTER X. 
 
 JOKES AND LITERATURE OF TBK PANIC. 
 
 SONG OF THE STREET. 
 
 Rushing 'rouud the corners, 
 Chasing every friend, 
 Plunging into banks — 
 Nothing there to lend — 
 Piteous ly begging 
 Of every raatf you meet. 
 Bless me ! this \i pleasant, 
 "Shinning" on the street. 
 
 Merchants very short 
 Rimning neck and neck, 
 Want to keep a'going — 
 Praying for a check ; 
 Dabblers in stocks, 
 Ulue as blue can be, 
 Evidently wishing 
 They were "fancy free." 
 
 All our splendid railroads 
 Got such dreadful knocks. 
 Twenty thousand Bulls 
 Couldn't raise their stocks; 
 Many of the Bears, 
 In the trouble sharing. 
 Now begin to feel 
 They've been overbearing. 
 
 Risky speculators 
 Tumbling with the shock, 
 Never mind stopping 
 More than any clock; 
 Uiil they give big dinners, 
 Smoke and drink and sup, 
 Going all tho bettor 
 For a winding uj). 
 
 Banking institutions. 
 Companies of ' trust.' 
 With other people's money 
 Go oir on a bust; 
 Houses of loug standing 
 
 Cru moling in a night — \ 
 With so many " smashes, ''i 
 No wonder money's iighL ' 
 
 Gentlemen of means — 
 Having lots to spend — 
 Save a little sympathy, 
 Nothing have to lend; 
 Gentlemen In want — 
 Willing to pay double — 
 Find they can borrow 
 Nothing but trouble. 
 
 Half our men of business 
 Wanting an extension. 
 While nearly all the others 
 Contemplate suspension; 
 Many of them, though. 
 Don't appear to dread it; 
 Every cent they owe 
 Is so much to their credit. 
 
 Brokers all are break ng, 
 Credit all is cracked. 
 Women all expanding 
 As the banks contract. 
 Panic still increasing — 
 Where will the trouble rnd, 
 While all hands want to borrow, 
 And nobody can lend y 
 
 Running round the corners. 
 Trying every source; 
 Asking at the Banks- 
 Nothing there, ofconne ; 
 Money getting tigliter, 
 Misery complete — 
 BleRS me ! thii* is pleasant, 
 '' Shinning" on the street. 
 {Eoen Po.^t ) Wail-strket. 
 
JOKES AND LITERATURE ON THE PANIC. 
 
 61 
 
 PANIC POETRY. 
 
 THE LAY OF THE DIRECTORS. 
 
 Respedfully deiidaed to the Directors of the - 
 
 Who, when the times were good and bright, 
 
 And speculation at its height, 
 
 Made Railroad shares appear all right ? 
 
 Directors. 
 
 Who, when my money was paid in. 
 Assured me that the road must win 
 A large percentage on the "tin?" 
 
 Directors. 
 
 Who made the costs increase so fast, 
 And shared in contracts, long and vast, 
 And filled their pockets to the last ? 
 
 Directors. 
 
 Who flattered me with hope of gains 
 
 From "branches," "air-lines," "lightning 
 
 trains," 
 And "feeders," leading to the mains? 
 
 Directors. 
 
 Who, when the chance seemed rather blue 
 For dividends and earnings too 
 
 - R. B. Co., by a Victimized Stockholder. 
 
 "Cooked" the accounts to make them "do?" 
 Directors 
 
 Who know the arts of financiers, 
 And charge fat fees as endorsers, 
 And turn, at pleasure, "bulls" or "bears?" 
 Dliectors. 
 
 Who, when grave doubts arise in this, 
 Seek lands " where ignorance is bliss," 
 And think large " sells" there not amiss ? 
 Directors, 
 
 Who swell the load of floating debts, 
 And set all sorts of traps and nets, 
 Who catch the public with their frets ? 
 
 Directors. 
 
 Whom should stockholders guard with care, 
 Lest they be cheated, " hide and hair," 
 And all their hopes prove empty air ? 
 
 Directors. 
 
 Evening Post. 
 
 When merchants fondly trust to paper, 
 And find too late that banks betray, 
 
 What art can help them though the scrape, or 
 Suggest the means wherewith to pay ? 
 
 LINES BY BUSTER. 
 
 [NOT BY GOLDSMITH.] 
 
 The only way to stop each croaker, 
 And pay the banks to whom they trust ; 
 
 To bring repentance to the broker, 
 And wring his bosom, is, " to bust !" 
 
 Evening Post. 
 
 MONEY. 
 
 Success will gild the bitterest pill, 
 
 While failure sours honey; 
 The surest cure for every ill 
 
 And every grief is Money ! 
 
 If you should wound one's finer feeling. 
 
 By being rude or rash, 
 Atid can't succeed the hurt in healing 
 
 By gentle means, try Cash ! 
 
 There's nothing like it; 'tis as sure as 
 
 "Death or quarter-day;" 
 A man i^ never put in duress 
 
 When he's prepared to pay. 
 
 The bilious man will lose his bile, 
 
 The bitter cease to frown; 
 The inconsolable will smile 
 
 At sight of money down. 
 
 Business goes on by sea and laud 
 Just as you " foot the bills." 
 
 If any job you have on hand 
 Sticks fast— just ^^ grease the wheels.' ' 
 
 So, in the sorest pinch in life, 
 One friend will never fail — 
 
 Surer than father, brother, wife — 
 That is, " cash on the naiW' 
 Evening Post. 
 
 " Times are improving, and men are getting on their legs again," said a 
 gentletnan to his friend. " How so ?" " Why, those who used to ride down 
 in their carriages now walk." 
 
 Wall-Street Broker — " Here, boy, give me a paper, and remind me to 
 give you the coppers to-morrow morning." 
 
 Newsboy — "No, ycr dont; we don't trust you brokers now." — N". Y. 
 Picayune. 
 
 Good Sign. — A man smiled on 'change yesterday, and escaped without 
 personal injury. — Boston Post. 
 
68 JOKES AND LITERATURE ON THE PANIC. 
 
 MR. JONES\S COMMERCIAL ARTICLE. 
 
 (It may perhaps be necessary to state that the commercial editor of a lead- 
 ing daily being ill, application was made at our office for a gentleman to do 
 the markets for said Journal. Mr. Jones having apparently exhausted his 
 humorous vein for the week, we recommend him. He did the work in excel- 
 lent style, but for some reason or other, the editor-in-chief of the Journal al- 
 luded to rejected his work. Injustice to Mr. Jones we insert it here.) 
 
 Pea-Nuts. — The market is steady, though prices are slightly depressed, 
 through the fluctuations in the money market. One or two heavy 
 dealers have been severely bitten in operating for a rise. They will not get 
 out of the corner under a heavy loss, unless there should be a sudden turn in 
 the market. We note sales of two pecks at 48 cents, for consumption, and a 
 bushel and a half on time, private terms. The failure of Barney McGinn, a 
 heavy holder, is reported to-day. This is due, however, to outside speculation, 
 rather than to his legitimate trade, and affords another warning against that 
 speculative spirit now so rife in our land, and which, unless checked, will in- 
 volve the whole commercial community in one broad blaze of ruin. Mr. 
 McGinn might have borne his losses in the pea-nut trade, but his large and 
 unsuccessful ventures in Musk and Water-Melons dragged him down. His 
 own statement of his affairs is as follows : 
 
 Liabihties - - - - |2 87J 
 
 Assets : 
 
 Pea-nuts on hand $0 26 
 
 Water-Melons (slices, and much depreciated) 13 
 
 Musk-Melons O 06 
 
 Memoranda against Newsboys - - - 1 Or — 1 45 
 
 Excess of Liabilities 1 42 J 
 
 It is almost needless to say that the memoranda are nearly totally worthless 
 as only a smalljportion of the amount is covered by collateral security, and 
 that security consists in two Sunday Heralds of January 8d, 185^7, a Bank- 
 Note Reporter for March, and two copies of John Dean and His Mary Ann. 
 The creditors may therefore look for about ten cents in the dollar. 
 
 Persimmons. — Anticipation of a bad season have given ^greater stringency 
 to this article than the demand for it usually justifies. Add to this, ravages of 
 Woodpeckers and Crows, and it will be seen that speculators arc justified in 
 their expectations. Moses Taylor, the Stewarts, Mr. Heckwelder, and others, 
 are understood to be cornering extensively for a rise. Should the expected 
 advices from New Jersey and Tinicum, however, proved favorable, as a few 
 confidently predict they will, the Bulls will suffer largely. 
 
 Welt wig sales of fifty quarts at 10 cents, buyers sixty days. One or two 
 small lots for consumption have been contracted for at 10 J to 11. If it were 
 our province to give advice, we should caution outside speculators that time 
 operations in this article at present are particularly risky. — N. Y. Picayune. 
 
 [From t?ie French.] 
 Monday, I started my bank operations ; 
 Tuesday, owned milUions, by all calculations ; 
 Wednesday, my Fifth Avenue palace began ; 
 Thursday, I drove out a spanking btiy span ; 
 Friday, I gave a magnificent ball ; 
 And Saturday smashed — with just nothing at all. 
 — Fvcning Post. 
 
JOKKS AiVD LITERATURE OX TOE TAMO. 
 THE PATIENCE OF THE POOR. 
 
 BY RICHARD MONCKTON MILNEW. 
 
 59 
 
 When leisurely the man of ease 
 His morning's daily course begins, 
 And round him in bright circles seen 
 The camforts Independence wins, 
 He seems unto himself to hold 
 An utcontested natural right 
 In life a volume to unfold 
 Of simple ever-new delight. 
 
 And if, before the evening closf*, 
 The hours their rainbow wings let fall, 
 And sorrow shakes his bland repose, 
 And too continuous pleasures pall, 
 He murmurs as if nature broke 
 Some promise plighted at his birth, 
 In bending him beneath the yoke 
 Borne by the common sons of earth. 
 
 Tlie]/ starve beside his plenteous board, 
 Tfiey halt behind his easy wheels, 
 But sympathy in vain affords 
 The sense of ills he never feels. 
 He knows he is the same as they, 
 A feeble, piteous, mortal thing, 
 And still expects that every day, 
 Increase and change of bliss should bring. 
 
 Tlierefore, when he is called to know 
 The deep realities of pain. 
 He shrinks as from a viewless blow. 
 He writhes as in a magic chain ; 
 Untaught that trial, toil and care, 
 Are the great charter of his kind, 
 It seems disgrace for him to share 
 Weakness of flesh and human mind. 
 
 Not so the People's honest child, 
 The field-flower of the open sky. 
 Ready to live while winds are wild. 
 Nor, when they soften, loth to die ; 
 To him there never came the thought 
 That this his life was meant to be 
 A pleasure-house, where peace unbought 
 Should minister to pride or glee. 
 
 You oft may hear him murmur loud 
 Agains the uneven lots of Fate, 
 You oft may see him inly bowed 
 Ben<fath affliction's weight on weight ; — 
 But rarely turns he on his grief 
 A face of petulent surprise, 
 Or scorns whato'er benign rehef 
 The hand of Gocl or man supplies. 
 
 Behold him on his rustic bed. 
 The unluxurious couch of need. 
 Striving to raise his aching head, 
 And sinking powerless as a reed , 
 So sick in both he hardly knows 
 Which is his heart's or body's sore, 
 For the more keen his anguish grows 
 His wife and children pine the more. 
 
 No search for him of dainty foo(i , 
 
 But coarsest sustenance of life, — 
 
 No rest by artful quiet wooed, 
 
 But household cries and wants and strife 
 
 Affection can at best employ 
 
 Her utmost of unhandy care, 
 
 Her prayers and tears are weak to buy 
 
 The costly drug, the purer air. 
 
 Pity herself, at such a sight, 
 Might lose her gentleness of mien, 
 And clothe her form in angry might, 
 And as a wild despair be seen ; 
 Did she not hail the lesson taught 
 By this unconscious, suffering boor, 
 To the high sons of lore and thought, 
 — ^The sacred Patience of the Poor. 
 
 This great endurance of each ill, 
 As a plain fact whose right or wrong 
 They question not, confiding still, 
 That it shall last not overlong ; 
 Willing, from first to last, to take 
 The mysteries of our Ufe, as given, 
 Leaving the time-worn soul to slake 
 Its thirst in an undoubted Heaven. 
 
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