(]enrol crises affecting the economic situation of an entire country, and extending themselves to other countries which have trade relations with the former, are peculiarly a mark of the modern organization of business. A century ago had harvest or other calamities might cause local distress, or speculation such as was exhibited in the days of the South Sea Bubble and the \lis sissippi Scheme might cause a panic, but such occurrences did not show the pertinacity and wide-reaching effects characterize the modern industrial disturbances. That such crises are inevitable consequences of modern methods, of doing business and inseparable from the economic activities of our times, seems to be well estab lished by their frequent, recurrence and by their greater severity in the most advanced nations.
Crises more or less pronounced occurred in England in the years 1815. l825-26, 1836-37, 1847, 1857, 1566, 1S73. and ]S90, while in the United States like disturbances were felt in 1814, 1818 19, 1837, 1557, 1873, 1884, and 1893. The perio dicity of these occurrences is marked, and certain writers have gone so far as to establish a normal interval of ten or twelve years between crises. The facts as far as we know them do not warrant us in fixing any absolute rule, though the history of these crises reveals many common features.
It will further he observed that the dates given for Creat Britain and our own country coincide in several instances, and if space permitted us to draw upon the history of Belgium, Holland. France, and Germany, further coincidences would be obvious. Certain crises, notably that of 1873, were felt quite generally. The actual crash did not occur in the same month, or even in the same year, in all the countries involved, but it is a frequent occurrence that local circumstances may hasten or postpone an event for which the general conditions are preparing.
The concrete manifestations of a crisis can best be studied in an historical instance, and none is better adapted for this purpose than the crisis of 1873 in the United States. With the close of the Civil War an extraordinary activity in all lines of enterprise was manifested. The public lands had been thrown open to settlement, and large tracts had been granted to the Pacific railroads. This, together with the return of the army to the pursuits of peace, and an enormous increase in immigration, was the condition for an era of speeulatire development in the Western States. The impulse which had been given to manufac tures, not only by the highly protective duties which marked the war tariffs. but also by the depreciation of the currency, which acted as a check upon foreign competition, caused a similar activity in the manufacturing States of the East. Business prospered: prices and profits were high. The census of 1S70 showed in every branch of industry a great advance over that of 1860, and the greater part of this advance was in the latter half of the decade. Nowhere was this confidence
in the future shown more than in railroad-build ing and in the iron industry. In 1867 there were 2249 miles of railway constructed: in 1869, 4613; in 1S71. 7379. A like expansion of railways had marked the approach of the panic of 1857. In like manner, the outlay for constructing railways rose from $271.310,000 in 1364-65 to $841.260. 000 in 1869-73. The consumption of pig-iron. which had been 1,416,000 tons in 1SOS, rose to 2.810,000 tons in 1873. High prices ruled. The maximum prices in the period following 1860 were, it is true, attained in 1866, hut if they fell in the years 1867 and 1868 it was only to rise again to a point nearly equal to that of 1866 in 1871 and 1872. The aetivity in the commercial centres is reflected in the rise of clearings in the New York Clearing house from twenty-eight billions of dollars in 1865 to thirty-five billions in 1873. The foreign trade of the United States showed a like activity, the aggregate of exports and imports rising from $609,000,000 in the fiscal year 186S to $1,164,000,000 in 1873. But even more significant of the expansion of activity in the United States was the fact of increased im portations from abroad. In 1870 the imports exceeded the exports by $43,000,000. lint in 1872 this excess had become $182,000,000, and in 1873 $119,000,000.
The crisis of 1873 is usually dated from the failure of .lay Cooke & Co., September 18. The Stock Exchange of New York was cloned on the 20th and was not reopened until the end of the month. Clearing House loan certificates Mere issued in large quantities. There had been certain premonitory symptoms of the approaching col lapse. reached its highest point. in 1871, pig-iron its highest price in Sep tember, 1872. The crisis lasted a few months only, the last Clearing House loan certificates being redeemed January 14, 1874. But there followed a long period of depression. which reached its lowest point three years later. The activities which had marked the previous era were not entirely stopped. enterprises begun had to be finished to save what was already invested, the daily needs of the people must be met, but all enterprise was timid and cautious. The buoyancy of the previous years was gone. and new enter prises were not undertaken. Railroad construc tion fell off, and in 1875 reached a minimum of 1711 miles, while in the period 1874-78 the outlay for construction was only $357,000.000. Pricy; fell until 1879, to rise thereafter until 1882. The consumption of pig-iron declined until it reached 1.900,000 tons in 1876. Clearings in New York City fell off from $35,000,000,000 in 1873 to $23, 000,000.000 in 1874. and reached their lowest point since 1863 at $22,000,000,000 in 1876, In foreign trade the excess of imports disappeared in 1874.