iv 'vu"". MF- - . dctober it, in The Commoner. 5 Exploding That Panic Fallacy Again Jacoby, Ralph Plymouth, Ind., writes: "What under his administration and in order to" avoid pression. More than 1,000,000 mon woro out of I would like to know more than anything else the stigma tho Harrison administration warded employment. at this time is tho true cause of the panic of oft the bond Issue and unloadod it on tho incom- "In 1890 tho McKinley bill was pasaod, and ing Cleveland administration. woro 1892 and 1893 and whether people are Justi- there 10,673 falluros In that yoar, and It may not bo out of place to point out that 12,394 tho next, with liabilities in each year fied In blaming the democratic party for it. Tho when the democratic of the hard times following administration surrendered amounting to nearly $200,000,000. Tho tariff fact democratic the reins of government, March 4, 1889, thero was raised to nearly fifty por cent, but wages occupancy of the presidential chair is going to was in the federal treasury tho largest surplus many from voting our I am a cither stood still or declined, whllo the prices deter ticket. in history. Whon tho republican party wont of necessaries advanced. Tho protected manu- young voter and know very llttlo about tho out of power, March 4, 1893, thero was a large history of those facturers kept all their 'bonus' as usual. times." deficit and tho incoming administration was "Tramps Commoner finally and trusts, tho twin products of a Tho has received several lettors persuaded to make tho bond Issues which monopolists tariff woro practically unknown In asking for similar information. Tho Commoner, its republican predecessor had at one time this country until wo had endured uninterrupted therefore, invites its readers' attention to a thought to bo nocessary, but had skillfully republican rulo a dozen years. general article on the panic fallacy. avoided. for "The worst labor troubles, tho bloodiest riots, The republican panic of 1907 provided a Tho claim that tho business disasters of the tho most destructive strlkos, tho most brutal forceful denial of the truth of tho claim com- period referred to were due to tho popular foar lockouts ever known In any country havo monly made by republican leaders that demo- of tariff legislation to bo enacted by democrats occurred hero under tho high tariffs, bought, cratic legislation and hard times decreased is, as has been said, met by tho fact that this mado and paid for by tho contributors of tho tariffs and panics are found coexisting panic began two years prior to tho presidential republican campaign funds." throughout our history. election day of 1892. Tho following will servo The panic of 1907 has seriously embarrassed as reminders on this point: MR. HARRISON PREPARED THE BOND republican orators. But the truth is that every November 11, 1890, tho reports showed It Is a fact that during tho closing hours of panic since tho Civil war originated under re- financial distress in Now York. Tho Now York tho Harrison administration in 1893, tho re- publican rule and developed under republican Clearing House association voted its certificates publican secrotary of tho treasury caused to bo legislation. to banks in need of assistance. prepared the platos for a bond issue. This Issue The great panic which gave "Black Friday" Tho Boston Clearing Houbo association did was by the hardest kind of effort postponed, and to history occurred during the month of Sep- tho samo thing Novembor 17. Barker Bros. & it was finally mado by tho Cleveland adminis- tember, 1869, when tho republican party was Co., big bankers in Philadelphia, suspended at tration. Sometimes republican politicians deny in power. that time, with liabilities placed at $5,000,000. that tho Harrison administration contemplated The great panic marked by the failure of Novembor 19, 1890, thero was a run on tho a bond issuo, but thoy do this only when thoro Jay Cooke & Co., occurred in September, 1873. Citizens' Saving Bank of New York, and a re- Is no ono present propared to show tho truth. Then tho republican party was In power, and ceiver was appointed for the North River Bank. Tho records at Washington show that Secrotary eleven months prior to the beginning of November 22, 1890, the United Rolling Stock of tho Treasury Charles Foster Issued an order that 20, Of panic that party had been re-elec- ted to power. company of Chicago assigned, with liabilities February 1893, directing tho chief the The "panic of 1893" began long prior to that at $6,851,000. United States bureau of engraving and printing year and, indeed, long prior to the presidential November 28, 1890, B. K. Jamieson & Co., to preparo plates for thoso bonds. The story is election of 1892; and It Is a fact, although the Philadelphia bankers, failed, with liabilities told very briefly In "Thirty Years of American republican orators and republican organs try to at $2,000,000. FInanco," a volumo wrltton by Alexander Dana ed Noyos, financial of tho New York Even- forget it, that the so-call- panic of 1893 began December 6, 1890, tho Oliver Iron and Steel editor and played its greatest havoc under that famous Mills of Pittsburgh shut down, discharging ing Post. This volume may be found In almost tariff law known as tho. McKinley bill. 2,000 employes. On the same dato tho cotton any public library. It may be well for Commoner readers to keep firm of Myer & Co., of New Orleans, failed, with On pago 183 tho following appears: readily at hand some of the facts and .figures liabilities at $2,000,000. "By tho closo of January, 1893, the treasury's relating to this question. January 3, 1891, tho Scottdalo Rolling Mills gold reserve had fallon to a figure barely olght The republican party was restored to power and Plko Works and the Charlotte Furnace and millions over tho legal minimum. With Febru- March 4, 1889. Coke Works in Pennsylvania closed, throwing ary's early withdrawals ovon larger, Secretary The McKlnley tariff bill became a law October 10,D00 employes out of work. Foster so far lost hope of warding off tho crisis 6, 1890, and remained in effect until August January 18, 1891, tho American National that ho gavo ordors to proparo tho engraved 27, 1894. Bank at Kansas City suspended, with liabilities plates for a bond issuo under the resumption act. The Wilson tariff law, enacted by a democ- at $2,250,000. As a last resort, however, ho bethought himself ratic congress, went into effect August 27, 1894. May 8, 1891, tho Spring Garden National of Secretary Manning's gold borrowing opera- If any one will take the trouble to examine Bank at Philadelphia closed its doors, tion of 1885. In February Mr. Foster camo In the republican campaign textbook for 1904, and the Pennsylvania Safe Deposit and Trust person to Now York to urge tho banks to give pages 125, 120 and 127, he will find considerable company made an assignment. up gold voluntarily In exchango for tho treas- space devoted to a statement of business dis- Tho Homestead strike and other strikes dur- ury's legal tender surplus. (See New York asters from July 18, 1893, until November 13, ing 1892, and prior to election day, aro well Financial Chronicle, February 11 and February 1894. The republican managers expected their romembered by the people. 18, 1893.) From a strict commercial point of readers to remember that the Cleveland ad- Tho record discloses that the first indications view, thero was good reason why tho banks ministration was inaugurated March 4, 1893, of tho so-call- ed panic of 1893 were given No- should not make any such exchango. But tho and that all these disasters occurred under vember 11, 1890, a little more than thirty days plea that a panic must at all hazards be averted, democratic administration; but they expected after the McKinley tariff bill became a law. combined with tho argument of patriotic sup- their readers to forget that the republican tariff From that date tho panic raged, and while its port of the government, at length prevailed. law was in force up to August 27, 1894, or effects were felt for several years it reached Tho New York banks turned over to tho treas- covering more than twelve months of the sixteen its worst stage in 1893, and during tho early ury, In exchange for notes, six to eight million months' period of business disasters" as described days of 1894, during all of which time the re- dollars in gold. (See Now York Tribune, by the republican text-boo- k. publican tariff law was in effect. February 9, 10 and 11, 1893; Now York Finan- panic 1893 re- The late Thomas B. Reed, after his retire- cial Chronicle, February 11, 1893.)" In their references to the of speakership, publican orators and organs habitually over- ment from tho delivered a speech HARRISON BOND PLATE ORDER McKinley in New York in which he said: "Another thing i look the date when tho law ceased country any i and the Wilson law wont into effect. But when which led this whole into tho error of When ono denies that plates for bonds ? they are required to 1892 was tho history of the last thirty years. wero ordered under the Harrison administra- In their tariff discussions During all that time wo have been tion, show him this written by Lyman face the fact thafthat panic played its greatest prosperous." letter J. republican The New York World called this "cold, colossal Gago, when he was secretary of the treasury,, to havoc during tho life of tho tariff impudent falsification of history," Representative Gaines of Tennessee: law they answer that it was the anticipation of and and said vic- that it must have astonished thoso among his "Treasury Department, Office of the Secre- tariff legislation growing out of democratic whose memories were moro tory in 1892 which brought on these business hearers than one tary, Washington, D. C, March 25, 1897. Sir: busi- year long. Then this New York paper gave Mr. I havo tho honor to acknowledge tho receipt of disasters. For this reason In their list of these Interesting ness disasters they place July 18, 1893, as Reed reminders: your letter of this date, requesting the original great paiic. "The panic of 1873, under republican rule and letter, or a certified copy thereof, written by Mr. marking the beginning of that twelve years of high tariff taxation, was Let it bo remembered that the McKinley tho Secretary Foster, February 20, 1893, addressed 6, 1890, and most disastrous and the period of business de- to tho chief of tho bureau of engraving and tariff bill became a law October pression for five years thereafter was so-call- most the indications of the ed panic the printing, authorizing tho preparation of certain that first severe of any in history. It was officially esti- plates. In compliance with request sub- of 1893-- 4 were given November 11, 1890, a said I mated that 3,000,000 worklngmen were out of mit below a correct copy of the letter in ques- little more than thirty days after the McKinley employment. Bankruptcy was widespread. a law. From that date the A tion, also a copy of the text of the proposed tariff bill became tidal wave of ruin and distress swept over the bond." panic raged. country. was inaugurated Copy of letter. v4 The Harrison administration 1881 to 188G, March 4, 1889, and when the first indications of "From under two republican "Treasury Department, Office of the Secretary, this panic were given, President Harrison had tariffs, there wore labor strikes involving 22,304 Washington, D. C, February 20, 1893. Sir: not exhausted the half of the term for which he establishments and 1,323,203 workmen. Of You are hereby authorized and directed to pre- was elected. It is admitted by everyone familiar these strikes 9,439 were for an Increase of pare designs for the 3 per cent bonds provided n wages and 4,344 against reduction of wages. in a senate amendment to tho sundry A with the facts that President Harrison's adminis- party civil bill tration had plates prepared for the bonds and "Mr. Reed's tinkered the tariff in 1883. now pending. The denominations which should secretary treasury made a In that year there were 9,184 business failures, first receive attention are 100s and 1,000s of Mr. Harrison's of the involving f visit to New York for the purpose of negotiating $172,874,000. In 1884 thero were tho coupon bonds, and 100s, 1,000s and 10,000s was wired by Mr. Harrison 10,968 failures, involving $226,343,000. In the of the registered bonds. This authority is given 43 the bond deal. He next year, the republican to return to Washington. Mr. Harrison said still under tariff and In advance of the enactment, in view of press- 1 not have any bond issues currency laws, there was a general business de ing contingencies, and you are directed to hasten that he had concluded I