In 1854 came a stringency in the money mar ket and hard times began to press upon the country. Trade was more sluggish than at any time since 1837. Money was hard to obtain and the very best paper sold at 10 and 12 per cent, some going as high as per cent per month. Thert of specie from the country was large. These conditions brought on a panic in Wall street in September 1854 which was fol lowed in November by financial disasters in the, West and South and the suspension of many banks and bankers. This monetary panic and the subsequent depression were only a precursor of the panic of 1857. After a few minor fail ures the Ohio Life Insurance and Trust Com pany of Cincinnati failed on 24 Aug. 1857 with liabilities of over $7,000,000. This created a panic in Wall street and many brokers and bankers were unable to meet their obligations. On 25 September the Bank of Pennsylvania at Philadelphia suspended payments, to be fol lowed soon by banks in almost every section of the country. Early in October the Illinois Central Railroad made an assignment, the New York and Erie Railroad Company protested its notes and the Michigan Central suspended payment on its floating debt. The prices of commodities rapidly declined, factories and workshops suspended and thousand lacked em ployment. Armies of workingmen, desperate in their fear of starvation and poverty, paraded the streets of cities, rioting occurred in many places, and the militia was called upon to restore order. In 1857 there were in the United States and British provinces 6,022 failures, with liabilities of $222,335,000, and during the first three months of 1858 there were 1.540 failures. with liabilities of $31,733,000. The causes of the panic have been attributed to various circumstances, such as the reduction of the tariff, the speculation en gendered by the influx of gold from California (which caused the belief to prevail that no undertaking was too stupendous for the fortu nate nation to undertake), the enormous exten sion of railway lines, the expansion of bank loans and circulation, the export of specie, the increased importations of merchandise, and un due extension of credit. During 1858 the de pression continued unabated but at the opening of 1859 good times seemed to have returned The South was prosperous, general crops were bounteous and prices were high, but in June 1859 a killing frost laid low the crops of wheat, grain, potatoes, vegetables and fruit in New York, Pennsylvania, Ohio, Indiana and Illinois. Nevertheless by 1860 another season of pros perity seemed at hand, only to be stifled by the Civil War.
In the spring of 1873 occurred a sharp re versal of previously prosperous business condi tions. In anticipation of profits, a specuktive spirit had been aroused which produced an over production in every: branch of industry, a gen eral glut of the market and a ruinous decline in prices. Money gradually became tight, dis count rates advanced rapidly, and by September little money could be borrowed at any price. After the downfall of a few smaller concerns, the panic broke forth on 18 September when Jay Cooke & Co., of Philadelphia, suspended, as a result of which stocks slumped on the ex changes and a score of brokerage houses, banks and banking firms were forced to the wall. Suspension of payments occurred first at New York but extended to all the larger cities and continued until 1 November. The panic in the "Street" was of short duration but its effects were apparent in commercial and industrial cir cles for months, thousands of establishments be prostrated g handicapped or completely pstrated 17 lack of available funds to conduct their busi ss. Between 1873 and 1876 the mercantile failures were $775,000,000 and the defaults by railways up to 1 Jan. 1879 amounted to nearly $800000,000. The number of bankruptcies up to 1878 was 10,478, while the depression follow ing the panic was even more fatal to productive industries. Between 1873 and 1879 these fail ures numbered 47,000 and the money loss was $1,200,000,000. It is estimated that 3,000,000 men were thrown out of work. The depression ex tended to many parts of the world.
In 1883-84 another period of panic and de pression began. The gigantic speculation in railroads reached its zenith about 1880 and a retrograde movement set in. President A. T.
Hadley in his Transportation,' says that of the 29,000 miles of road constructed in 1880-82 only a third was justified by existing business, another third might be profitable some time in the future, and of the remainder some were built to put money into the hands of the builders as distinct from the owners, some were built to increase the power of existing systems, where they were not needed, and some were built to sell as a blackmailing scheme against other roads. During 1883 there were a few small commercial failures and on 1 Jan. 1884 the New York and New England Railroad went into the hands of a receiver. During 1884 and 1885, 41 railway corporations, holding 19,000 miles of track, were placed under receivership and 37 smaller railroad properties were sold under foreclosure. Moreover in the spring of 1884 a decline in the prices of agricultural ucts occurred. Owing to a great increase in the world's wheat crops, the price fell below that of 1878, resulting in stagnation of interior trade, because farmers held their produce for more favorable market conditions. Hence railway freight traffic was greatly diminished, thereby reducing railway stock dividends, and conse quently investors hesitated to embark in railroad enterprises of great magnitude. In May 1884 came the failure of the National Marine Bank of New York, the president of which was asso ciated with the firm of Grant and Ward, which failed shortly afterward with liabilities of $17,000,000. Several other banks and banking
houses failed, the total liabilities of the wrecked concerns being about $240,000,000. While the panic centred in New York, there were numer ous failures in other cities, 11 national banks and about 130 other banks and private bankers being counted in the list. There was no suspen sion of specie payment during the panic and this, together with bounteous crops, tended to im prove conditions, the general distrust dimin ished, credit circulation was re-established and the discount rates resumed their normal level.
For some time prior to 1894 the foreign financial situation had been much upset and in 1890 the firm of Baring Brothers of London failed with home liabilities of over $100,000,000. Consequently English holders of American securities dumped them into our market and gold began to flow toward London; this export of gold was further enhanced by high rates of exchange in foreign financial centres and heavy imports of merchandise in 1891. Early in 1892 conditions changed and owing to our enormous exports of wheat a considerable portion of the gold returned, thus restoring our depleted gold reserve. But for various causes the price of wheat suffered a serious decline, English in vestors became alarmed at the condition of the United States treasury and currency, and, fear ing that we might enact a free coinage silver law, again sold their American securities with the result that, owing to exports of gold, the reserve had fallen to $114,231,883 in May 1892 and was likely to fall below the legal limit of $100,000,000. The Secretary of the Treasury then discontinued the payment of debts in gold and began to hoard it, and the year passed with out much further financial trouble. But prices and cost of living had been advancing without any compensatory increase in wages. The work ingmen were in a relatively worse condition than before and struck for higher wages, several disastrous dashes occurring in 1892, especially at Homestead, Pa., in the Coeur d'Alene mining region of Idaho and in the Erie and Lehigh Valley Railroad Yards at Buffalo. In November 1892 Cleveland was elected President on a plat form calling for a parity between gold and sil ver coins, and creditors feared that the govern ment either could not or would not redeem its legal tender notes in gold coin, there being only $100,982,410 in the gold reserve when Cleveland assumed office, and barely $25,000,000 in other forms of money. Hence, according to Lauck, the widespread apprehension as to the fixity of the gold standard of payments, together with general industrial unrest, caused the panic of 1893. On 20 Feb. 1893, before Cleveland as sumed office, the Philadelphia and Reading Railway, with $40,000,000 capital and $125,000, 000 debt, went into bankruptcy; on 5 May came the failure of the National Cordage Company with $20,000,000 capital and $10,000,000 liabili ties, these failures causing a heavy slump in the stock market. On 26 June the government of British India suspended the free coinage of silver and the price of silver dropped in three days from 82 to 67 cents per ounce. In July the Erie Railroad failed and the Milwaukee Bank suspended, causing runs on banks, particu larly in New York. In August the House of Representatives voted to repeal the Sherman Silver Purchase Law, but though this helped to restore confidence, the Senate failed to act until 30 October (Cleveland signing the bill 1 November), when it was too late to stem the tide of disaster. In December 1893 the Comp troller of the Currency announced the failure during the year of 158 national banks, 172 State banks, 177 private banks, 47 savings banks, 13 loan and trust companies and 6 mort gage companies, though a few of these after ward resumed business. In 1894 156 railway companies, operating nearly 39,000 miles of were in the hands of receivers, the total capitalization of these companies being about $2,500,000,000, or one-fourth the railway capi talization of the country. Commercial failures increased from 10,344 in 1892, with' iabilities of $114,000,000, to 15,242 in 1893, with liabilities of $346,000,000. The problem of the unemployed became acute and relief committees were organ ized in many cities; numerous demonstrations by the unemployed occurred, the most spectacu lar being the march to Washington in April 1894 of the army' under J. S. Coxey to demand help from the government. In the same month 130,000 miners stopped work, fol lowed later by 25,000 more; in June to July occurred the Pullman boycott in Chicago ; other strikes took place at New Bedford, Fall River and New York; and inJanuary 1895 the employees of the Brooklyn Electric Railway system went on strike. Agricultural disaster also overtook the country in 1894, a drought ruining the corn crops of Iowa, Kansas and Nebraska, reducing the yield to one-fourth that of 1893. The wheat crops were larger, but so were European wheat crops, and as there was no market either abroad or at home the price of wheat declined to its lowest mark, 49 cents per bushel, and similar declines were ex perienced in the prices of corn, oats, rye and barley. In August 1894 the Gorman-Wilson Tariff Bill became law, the treasury reserve was kept intact during the next two years by the sale of gold bonds, and the public began to regain its confidence in the government and the stability of business institutions, which was further enhanced by the election of McKinley in 1896 on a protective platform and by the enactment of the Dingley tariff in 1897.