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About Omaha daily bee. (Omaha [Neb.]) 187?-1922 | View Entire Issue (Sept. 13, 1896)
20 OMAHA DAILY TJEE : SU-2TDAY , SEPTEMBER 13 , 1890. RECENT SILVER COINAGE1 Effect of Silver Legislation in the Unitec ttatcs from 1878 to 1890. CHANGES IN ECONOMIC CONDITION ! CmtM'N AVlilcli llrouKhl Alxint ( tip llc- pcnl of the Hlltrr IMiri-htiNC I.IMV 111 IKII.'l unit the IKKIIC ( if Uolel HoiulH III I.Si ) I. lly Chnrlcs S. Klsiittcr. NOTE. The following article has been adapted for The lice by Charles Elguttcr from contributions of Prof. Frank W. Taus- BK ! of Haivard university to economic Jour nals. Mr. Tausslg discusses silver In Us historical aspect , and his research Is both timely and valuable as an accurate explana tion of the cnc-cts of silver legislation upon the money situation since 1878. In adapt ing hU mouogr.iphs his arrangement cn.l Ian. ; ; uage have been followed as nearly as prac ticable. The charm of Mr. Tousslg's writ ings Is that ho Is frco from political or par tlsan bias , and brings to the study of polltl cal economy that accuracy and painstaking Investigation which distinguish the scientist from the politician. The dlscuislon of the economic situation of the United States in lb9G need not go back further than the net of 1878 passed by congress and known as the Ulaud bill. Although thu silver dollar of which the coinage was resumed In 1873 dates back as a coin to the earlier days of the republic , Us reissue In that year marks a policy &o radically new that the experience of pre vious years throws practically no light on Ita workings. The act of 1878 provided for the purchase by the government , each month , of not less than $2,000,000 worth , nnd not moro than $4,000,000 worth of sil ver bullion , for coinage Into silver dollars at the rate of 412'Xs ' grains ot standard silver ( or 371VI grains ot flue- silver ) for each dollar. The amount of the purchases , within the specified limits , was left to the discretion of the secretary of the treasury As every secretary of the treasury , tluough' out the period In which the act was In force , kept to the minimum amount , the practical result was a monthly purchase of $2,000,000 worth of silver bullion. THIRTY MILLIONS OF SILVER A YEAR. The amount of silver obtainable with $2,000,000 varied according to the price of the metal In terms of the- dollars with which the purchases were made. In Febru ary , 1878 , when the first purchases wcro made , those dollars wcro the Inconvertible United States notca , or greenbacks , worth something less than their face In gold. The amount of silver bullion obtainable with 2,000,000 such dollars depended on the price of silver bullion In terms of gold , and on the value of the dollars themselves In terms of gold. When specie payments were re turned , on the 1st of January. 1879 , and the greenbacks became redeemable In gold , the measure of value In the United States bccamo gold , and the extent of the coinage - ago of silver dollars under the act of 1878 bccamo simply a question of how much sil ver bullion could bo bought with $2,000,000 of gold. The price of silver In 1S7S was , In terms of gold , not far from $1 for an ounce of standard silver. Since 1S7S It has gone down almost steadily , end in 1889 was barely above SO cents an ounce. The monthly purchase of $2,000,000 worth of silver al ways yielded moro than 2,000,000 silver dollars lars , the amount being greater as the price of silver went lower. On the average , the monthly yield has been not far from 2,500- 000 of silver dollars. Thirty millions ot silver dollars a year , was about the ad dition to the currency from the act of 1878. THE SILVER CERTIFICATES. An Important provision of the act of 1878 was that authorizing the Issue of silver cer tificates against the deposit of silver dollars. This authority was limited at the tlmo to ertlllcatcs In denominations of ten dollars nnd upward ; a restriction which proved to bo of great Importance. At the time It was not" expected that the silver certificates would enter directly Into the circulating medium. Dut In fact , it has been chiefly lu the form of certificates that the silver has entered Into circulation. The quantity ot ac tual coined dollars which the community would use reached an early and stubborn limit ; but In the form of certificates much wider play was given to their use. The dollars lars and certificates between them consti tute the silver currency of the act of 1878. MORE MONEY AND HIGHER PRICES. The passage of that act was duo to causes easily described. It was part of the opposition to the contraction ot the cur rency and the resumption of specie pay- ETcnts , which forms the most Important episode in our financial history between 1867 and 1879. Some additional force was given to the movement In favor of the use of silver from the desire ot the silver mining states and their representatives. Dut this clement was not then , as It has been In more recent years , of any great Importance by Itself. The real strength of the agita tion for the wider use of silver us money came from the conviction of large masses of the people that the community had not enough money. DLAND ACT A NEW EXPERIMENT. Although the specific measure passed In 1878 rest'-il on a long train of historical causes , it contained details that were es sentially new. It provided for the injec tion Into the currency ot a largo annual Increment ot over-valued coin. The coinage of silver was not free , hut was undertaken by the government on Us own account , the treasury reaping the profit which would accrue - cruo so long as the coins were kept at a higher valuu than that of tha bullion put Into them. The new coins were legal ten * der to in unlimited amount , and no attempt - tempt was made to adjust their quantity to the needs , ot the community for tbo con venience of small change. The act simply provided for a regular mechanical addition of largo amounts of silver to the general circulating medium. No other country has ever entered on an addition of over-valued coin to its circu lating medium having the object and ex tent of that made by our silver act of 1878. This characteristic ot the measure was the result nut of any deliberate Uilontion to try a new experiment , but of the spirit of compromise vUilch explains so many an omalies. The sliver act an passed by the house at repivsentittlven provided for the frco and unlimited coinage of the stiver dollar at the old ratio of 16 to 1. In the Ecnato it was amended by the substitution of the provisions for a limited coinage , which vycre finally enacted , Thu com promise was meant to satisfy both those v\ho objected to the cheaper standard and those who wanted mpre > money ; and It at- forded a welcome escape to the legislators who were trying to satisfy all parties. No one expected that the measure would re main In force for any great length ot time. The conservative clement hoped that It would ho re-pealed after a short trial ; the Inflationists ( for by that name they might , then , at least , fairly bo called ) believed that It wouU coon bo superseded by the free and Unlimited coinage ot silver. The act , however , remained In force , unameuded , forever over twelve years ; and the measure which succeeded It in 1890 , though different in many details , followed the same method of forcing a largo regular Injection into the cliculatkiij' medium ot based money on sil ver purcliflEea by the government , 8ILV13R WOULD NOT CIRCULATE. The first sliver dollars wcro coined lu March , 1878. and In the course of that month 190,000 of them went into circulation , white 810,000" remained lu the Treasury. Something - thing like this proportion was maintained through 1878 and the first halt of 1S79 : not moru than oue-fiftU ot the coins made their way into the hands of the public. Silver certificate * practically did not make their n way Into circulation at all , The h8ory | ( of the certificate at thin time is curious and significant , When the first purchases of bullion were made , in the courua OC 1878 , checks lu payment were drawn by the director ot the mint , pay. able in silver dollars. The purchases were made chiefly at San Francisco , There the payee drew , Instead of silver dollars , silver certificate ! of large denominations. These 'wero sentut once to New York , and within I < ten days from the day of issue they found I JStt eZ2K&-UBL ! New York customs bouse. Had the revenues collected by the government In San Fran cisco been larger , they would probably have been turned In at that port within forty- elRht hours. The rapidity with which they came back at first nonplussed the officers of the Treasury. It was some time before they learned how Impossible It was to get the certificates of largo denominations Into cir culation. The only form In which the silver currency could get Into permanent circula tion was In the denominations which servo for every day retail transactions. In the first year no special effort seems to have been made by the -Treasury to got out the certificates of the smaller denominations per. milled by law. Uuuscqucntly the dead all- \er accumulated rapilly. ) HOW THE THtUSUllY PUSHED SILVER. This phase , 1io\Vovcr , , did not last About the middle' 1879 a slight upward movement began , bath In the circulation of dollars and of ctmtieatcs. Toward the end of 1880 this moVcm'cnt attained largo di mensions. The amoUrit of silver certifi cate.1) In circulation Increased with a hound , rising from less than eight millions In August to more than thirty-six millions In December , and leaving only n narrow margin - gin of dead silver In the treasury. In the first half of 1S81 there was n check to the Increase , but In the second half ot that year the upward movement was lesumed. lly the end of December , 1SS1 , the sllvo certificates in the hdnds of the public amounted to over sixty-two millions , and the circulation of dollars and certificates combined wea within seven millions ot the total ninpiint coined. Some explanation of this sudden and cxtramdlnary change Is to be found In e new measuroniloptcd by the Treasury de partment for t.joiPU.rposo ) of pushing silver Into circulation , , ln September , 1880 , the treasury Issued a circular , by which , In exchange 'or deposits of gold coin with the assistant treasurer In New York , drafts were offered on the slibtreasurles In the south and west , payable In silver certl.V cates. The treasury undertook to save the expense of the transportation of cash to all persons who had 'occasion to remit to the south and west. REASONS FOR GOOD TIMES OF 18SO-S2. Had there been no silver currency , there would certainly have been an Inflow of gold from abroad even greater than in fact took place. The crops of 1S7S to 1882 were abun dant ; the crops In Europe wcro meaccr ; our exports suddenly swelled and attained In 1SS1 a volume which has not again been reached. Largo quantities of pold flowed In during the fiscal years of 18SO and 1SS1. The long nerlod of depression which began with the crisis of 1873 was followed by a renewal o activity ; the sudden turn In foreign trad contributed to stimulate the general revival In all directions new operations were begun and old ones pushed on n larger scale. Th building of railroads advanced with extra ordinary rapidity. Dank loans and deposits swelled rapidly ; the reserve of lawful after 1880 remained nearly stationary ; the national bank circulation rose and rcaclici Us highest point In the latter part of 1SS2 All this activity meant a greater use o money In paying wages , In the retail trans actions of everyday life , In "moving tin crops. " The rapid growth of population especially In the west and south , would have In any case brought about a greater domam for what wo may call large change. The conditions under which national bank notes could bo Issued were already becoming so unpromising that no considerable Increase In their quantity could take place ; and the silver currency consequently found a ready and permanent circulation. If there had been no silver , other sorts o ; money would notjhavo failed to supply the need. As It watf , the Issueot bank notes Increased under ho Influence of the same causes that ledjjfy the greater use of silver a larger Importation of gold took place. Ii ono or both of these forms the money sup ply would have adapted Itself to the demand. In the- absence pt'sllver an even greater Im portation of gold would have taken place and the everyday circulation medium wouli have been made up In larger proportion of that metal. These general conditions con tinned through the years of 1882 and 1883. Whllo the conditions continued favorable for an Increase In the amount of money In active circulation , the decline In the cir culation of national banknotes , which be gan after tho-niaxlinum had been rcacheil in the early part of 1882. contributed still more to mat.o ) way for growth In the vol ume of sllve'r used by the. community. Ac cordingly , while there was some check In 1SS2 to the upward movement ot outstanding Jllver , that movement was resumed In 18S3. On the""vvfhole. for the three years , 1881 , 1882 and > lS$3 , the silver currency was absorbed by Unopublic as fast as the dollars lars were colncd'at the mint. THE REACTION OF 1SS4. Dut the signs of a general reaction showed themselves with the beginning of 1884. The failures of the Marine National bank and of Grant & Ward took place In May , 1884 , and were followed by other bank suspen sions , by the failures of various private banks and brokers , and by the break-down of largo railway enterprises , notably of the West Shore railroad. While there was no acute crisis like that of 1873 , all the signs of a period of depression showed themselves. The building of railroads almost ceased ; the production of Iron fell off ; bank loans ami deposits declined. With this general break-down the .circulation of the silver currency entered on Its second phase. The beginning of 1881 showed some de cline In the amount of silver dollars and certificates held by the public. This was followed In the autumn months by the usual Increase to move the crops ; but In the early part of 1SS5 > there was a sharp decline. No appreciable growth took place In the autumn months of. 1885 , at the time when a growth was most'.likely to take place ; and the lit- tie that was gained \\as lost again in the first half "of 1880. The silver currency In the hands of the public remained stationary from the beginning of 1884 till the middle of 188G. Under these conditions the regular coinage - ago of silver dollars necessarily caused dead silver to accumulate. In the treasury ; and In July 1880 the dead silver , reached Its maxi mum , nearly ninety-four millions of dollars lay Idle In the vaults of the government. The cxplaratlon of the stationary volume of the sliver currency Is not difficult to find. With the general standstill In business ac tivity , the ocqasjons for the use of money for transfer from hand to hand ceased to grow , even became less. The bank deposits , and .the clearings of the banks In the cities , shrank appreciably , indicating a decline In wholesale transactions , The currency of re- tall and consumer's transactions , In which the silver had hitherto found room for ex pansion , showed a similar tendency. As Is usual In pe-rlods of depression , the unused munoy of theH"injblc | accumulated In the vaults of thdMmtiks. and what Is called a plethora of money1 Continued through the year 1885. The general conditions which caused cash to accumulate in the'reserves of the banks , caused the silver certificates to accumulate in the vaults of the government. The silver certificates In general now went through the same course which affected the circulation of the silver dollars , and of the certificates of largo denominations , The people hod less occasion for using money than before ; they certainly had no occasion to use the addi tional silver currency which the regular monthly coinage was creating ; the hanks would not let the silver accumulate- their hands ; consequently It found Us way back Into the government vaults. DANCER OF A DREAKDOWN. The situation pf the treasury under these clrcunistaiicest vfAs. Busgcstive of a breakdown - down In the-pquqr which the government succeeded In pu.rRnlng ever since the resump- ' tlon of specie payments that of paying gold to every creditor who- choose to demand It. The amount of gold in the government's rev enue was shrltiKiny ; " and , moreover , with the depression In trade , customs receipts dimin ished , the totarrevTnue was also falling off. On the oth6r hancr.'the ordinary gold llablll- tics and payments showed little decline. It any. The result .from the beginning of 1884 , when sliver began" to crowcl'gold out of the public receipts ; % vaa a hea'vy drain on the government's reserve of gold. The treasury mode an effort to check the return of silver currency Into Its vaults by getting moro silver dollars Into permanent circulation. At this tlmo the currency ot the denomination of one and two dollars consisted almost exclusively of United States notes or greenbacks. In Juno , 1885 , the Issue of greenbacks In denominations of leas than $5 was stopped , lu the hope of bring ing about n greater use. of the coined dollar , The effects of this measure could only lie gradual. The one- dollar and two dollar notes already In circulation could return to the treasury only no they became dirty nnd unfit for use , and were sent In to be ex changed for t lean notes The- old notca could then destroyed , and new notes of larger It turned out , the public had a strong pref crcnco for notes rather than coin , and when It appeared that new notes of small dcnoml nations were no longer to be supplied the old ones wcro Kept In use long after the ; had become unfit for circulation. Dirt : notes were preferred to bulky silver dollars Consequently , the success of this measure v as not great. Nevertheless , something wo. secured ; for In the second half of 1SS5 , when the general conditions were unfavorable to an Increase In the outstanding circulation nnd when the silver certificates In the hand of the public In fact showed a decline , th amount of silver dollars outstanding shoxvci an Increase of 10.00),000. The gain wa made chiefly In the south , and. E0/ar ( as 1 went , helped In preventing the treasury fron being overwhelmed by the accumulation o silver. SURPLUS REVENUE DUYS DEAD SILVE1 The surplus revenue of the government Instead of finding Its usual vent In the re demption.of bonds , was devoted to Increas Ing the dead silver In the treasury vault Every month $2,000,000 were spent In buy Ing silver bullion and coining It Into dollars lars stowed away In the- treasury vaults In addition , largo quantities of , silver ccr tlflcates wcro received In payment pf publl dues , and then allowed toc \ Wlo In th treasury. In August , 1885 , there were ncarl $13,000,000 of silver certificates In the trees ury , the largest holding since the pasaag of the act of 1S7S. Thu result of till cautious policy was to retire the rcdnndan sliver certificates. Aa this was accom pllshcd , less of them wcro turned Into th ticasury In payment of public dues ; mor gold flowed In. and the government's gel reseivo rose so long as Incoino exceeded ex pcmltture. It Is obvious that the treasury coul pursue with sucotss the course Just de scribed only' because Its Income exccedci Its expenditure. In the eighteen month between the beginning of 1835 and the mid die of 1888 , the government received ovc $26,000,000 In silver certificates which I did not reissue ; paid out , In addition , som $30,000,000 for silver bullion , which wa coined Into silver dollars , and In that torn stowed away In the treasury vaults ; am materially Increased Its net holdings o gold. Thcso enormous sums of course icp resent an excess of Income over outgo Notwithstanding the decline In Its receipt as compared with earlier years , thti govern incut still had a surplus so large as to en able It to hoard $ tiO,000,000 of silver cur reney , and to add $23,000,000 to Its hold ginning of 1S8U , the repayment of the publl debt. CUSTOM DUTIES PAID IN GREENDACKS Greenbacks , which , like other forms o money , flowed Into the banks In the coursi of the depression , were turned over to tin government In payment of public dues The government was getting 30 , 40 and 51 per cent of Its custom icoulpts at Now Yorl In the form of greenbacks. Such an Inflow ot greenbacks was an unmistakable slgi that general confidence In the ability o the treasury to maintain gold payment ! was shaken. Gold In hand was preferred to the greenback , the government's promise to pay gold. The low level reached by the cold reserve servo In the middle of 1885 was a source of uneasiness , which the treasury and the public shared. On the other hand , there wore elements of strength in the situation of 1885. By far the most Important of them was the surplus of revenue over expendi ture , which was used as a means of pre venting the silver currency from being put In circulation In excessive quantities. Some revival of business activity sot In during the second half of 1885 , helping the treas ury In both directions. It caused an In crease In the receipts from customs duties , and other sources ; It also caused an _ in creased use of silver currency In the' re viving business of the people. The declines In the volume of the silver currency outstanding - standing came to an end In the autumn of 1S85 , while the gold reserve showed a considerable upward movement. The period of real anxiety lasted only a few months In the spring and summer of 1885 , By the end of that jear the situation could no longer causeuneasiness. . DECLINE IN BANK NOTE CIRCULATION The steady improvement In the credit of tip United States , causing Its" bopds to yield a lower rate of Interest , tended to cut down the profit on the Issue of national bank notes , until by 1883 that profit had practically disappeared. As these notes dis appeared a void was made In the everyday - day money of the public , and a place waa made for the silver certificates. The do- clluo In the bank notes was rapid since 1886 , and the silver certificates consequently were easily absorbed Into the circulating medium. The other Important factor In the situa tions after 18SG was the legislation of that year In which silver certificates could be Issued. The act of 1878 permitted the Issue of certificates only In denominations of not ICSH than ten dollars. The circulation had been almost exclusively In denomina tions of ten and twenty dollars ; and the limitation to these denominations was of great effect In preventing the silver cur rency from finding Its way Into the every day money of the people. In the act of 1SSG the printing of certificates of one , two and flvo dollars was authorized. Under these circumstances , the small silver certificates were rapidly absorbed by the public. In the autumn months of 1SSG , certificates for ono , two and flvo dollars , wcro Issued as fast as they could be printed. As the revival of business became pro nounced room was madp for a general ex pansion of the retail currency of the com munity. Since 188G , the volume of silver currency gained almost steadily on the total coinage of the dollars , and with the beginning of 1889 , practically all the dollars coined wore In circulation chiefly In the form of certificates for one , two and flvo dollars , taking the place of small United States notes. Whllo the decline of the bank , note circulation made way for the additional amount of larger United States notes Issued in place of tbo small ones retired. retired.THE THE TREASURY NOTES OF 1890. The act of July 14 , 1890 , was even more remarkable than That of 1878. It was unique In monetary history. It provided that the secretary of the treasury shall purchase each month at the market price 4,500,000 ounces of silver bullion , In payment he shall Issue treasury notes of the United States In denominations of between $1 and [ 1,000. These treasury notes , unlike the - old silver certificates , are a direct legal lender for all debts , public or private , un- css a different medium Is expressly stip ulated In the contract. They differ from .he silver certificates In another refcpect ; .hey are redeemable either in gold or sil ver coin , at the discretion of the secretary of the treasury. The monthly Issues of the now treasury notes vary , like those of the old silver cer tificates , with the price of silver. Dut the new Issues vary directly with thp price of silver , whllo the old Issues varied inversely with the price. The volume of treasury totes Issued Is equal to the market price of 4,500,000 ounces of silver. When silver sold at $1.20 an ounce the monthly Issue of notes was $5,400,000 ; when at { 1 un ounce , $4,6 < K,000 ) , For a month or two after the passage of the act the price of sliver advanced rapidly and at Its height , on Au gust 19 , 1890 , touched $1.21. " After Sep- cmber a steady decline set Inand during the year 1891 the price was not far from $1 an ounce , On the whole , the Issue ot silver currency ( for by that name wo may still call the new notes ) has been at the rate of between JW.000,000 and $60,000,000 a year about twice as large as was the Issue under the act of 1878 , And this great In crease In amount Is the raoet Important difference between the two measure's. A CLAIM ON THE GOLD RESERVE. Ono marked change has taken place In the working of the act apart 'from the In * crease lu the Issues ; h change In the mode In which the banks have dealt with the trean- iry notes. That change leaves no ground 'or ' any distinction between the treasury notes based on sliver purchases , and the old United States notes , or greenbacks ; both Rorta of notes being legal tender , and both llrcet claims on the treasury gold reserve. During the first year of tbo new experiment 1890-91) ) large quantities both of the new note * and of the old legal tenders were paid out by the eubtreasury at New York to the banks of that city. Fully one-third of the laymcnts were In those forms of money ; a striking contrast to the almost exclusive usa if gold In preceding years. Similarly the > acks of New York , In settlements between hemutlvcB at the clearing house , Instead of isint : KOld and gold certificates only , made considerable payments In one or the other of the legal tender notes. As B result the gold reserve In the treasury went dowa Bbtrply . from the middle ot 16'JO to tbo wld- StJf. S I c r * - * - ' die of 1S91. In twelve months tha treasury lost (70,000,000 ot gold. Another change took place during this same period , closely connected with the decline In the treasury gold a change In the character ot the money taken In by the government for taxes. The receipts from customs at the port of Now York Indicated the nature of thU change. Since 1885 , when the gold receipts showed an ominous decline , the payments on account ot cus toms had been almost exclusively In gold , and they so continued during the first halt of 1S90. In the fall ot 1890 there was n. distinct drop ; then R recovery at the close of the year , followed In the first halt ot 1S91 by an nlmont .complete collapse , the percentage of rcaelpte In gold going down to CO , 40 , 20 and iaat last 12 per cent. Through four inctitlra of the summer of 1S91 the treasury cs receiving , at the point where moro than half of Its total revenue Is collected , , only 12 or 14 per cent ot gold , the rest being In silver certificates and In legal tendcre of the new and old Issues. THE DARING FAILURE. In November , liOO , came an event which had Important effects on the treasury as well as on the community : thu collapse of the great bankltiB housc of Darings , which , though It led lo-cno acute panic , brought about many of thc plumomena characteristic of a comaieictal crisis. At first there was the call for icady-cntli which is usual under Biich circumstances. . , The treasury exerted Itself to tide ovcnithe emergency by paying out e-ash llberallyii not only In Its ordinary disbursements , bat iby the prepayment of Interest on Lends. " The disposition of banks in the Interior to call back part of their reserves from New York , combined with the usual westward movement of currency for the movement of crops , tended to carry the various forms ot paper money away from Now York. Conscque-ntly there was no ac cumulation of paper and silver currency In that center , and the receipts at the New York customs house for a tlmo continued to bo chiefly In gold. In the beginning of 1891 the situation be gan to change. The first stage of anxious uncertainty being over , money was no longer kept on hand In unusual amounts , by banks and financial Institutions through the coun try , and tended to return to the metropolis. With some general depression In business operations , cash In the hands et banks tended still more to become redundant nnd to make Its way to the central reserve depositories. The return ot the currency which had gone to the west and south in the autumn strengthened the flow. Meanwhile the monthly Issue of the new treasury notes was steadily Increasing the supply which sought to make Us way Into general circulation. These causes combined to bring about , dur ing the first six mouths of 1891 , a marked accumulation of various forms of paper In the hands ot the New York banks. The Inevitable outcome of the situation was the back-flow of silver and paper money Into the United States treasury. As the s'l- ' vor currency accumulated In the hands of used by preference in malting the banks , It was ing payments to the treasury , their polilI be ing naturally retained. In 1S91 , as In 18 So. the decline In the treasury's gold receipts was the certain proof ot a redundant Issue ° A turn'ln the balance of International pay ments , duo chiefly to complications brought the Daring failure led at on In Europe by this tlmo to a heavy export of gold fromi the. United States. The drain was exceptionally largo , and fell entirely on the treasury , whoso gold holdings fell to less than $118- 000.000 at the close of the fiscal year , on Juno 30. 1891. The treasury had begun tlie fiscal with an ample reserve of gold , and was able to part with seventy millions vv th- out public signs ot ciubairassmcnt. nut clearly , unless the gold reserve vyas brought back to the ample amount at which it stood from 1SS7 to 1SS9 a repetition of the experiences of 1891 would lead to moie . OF 1892. The autumn of 1891. however , brought still another turn In the financial and Industrial movement , which , for a time at least , re- lloved the treasury , and may be referred of further Illustration of to here by way the working ot the silver currency. The crop year 1S91 was like the golden yours of 1879 and 1880 , marked by abundunrc in this c&untry and. scarcity Abroad. The re'sult was that 'for { he fall of 1S91 ex ceptionally large sums of money wcro callcu for to effect the usual autumnal payments In the west. With the new period of pros perity in the agricultural regions In 1891 , a general revival of activity with rapid In crease In business transactions , revival of speculation , new Investment of capital , and expansion of the circulating medium In every form , wfspromised for 1S92. These conditions made more easy the absorption Into actual circulation of the enlarged issues of silver currency. The Increase In cir culation of silver certificates for the year 1892 over 1891 wasi bout twenty millions , In Treasury not of 1890 , about flfty-flv ? millions ; in silver dollars a decline of about eight hundred thousand , making a total of bllvcr. Increase of about/seventy millions white for the same , period gold Increased In circulation aboutittwcnty millions. The balance of International payments shifted again , android came back from Europe , showing Its effects In the Increased holdings of that metal In November and December by the New York banks. The prospects of a new era of Industrial revival which started out so well with the now year of 1892 and lasted about ten or twelve months was sadly blightedI l the world-wide business disaster of 1SS3. i or the Unl ed the causes , ono must look beyond ( States although local conditions aggravated the malady. The collapse of South Amciican speculation , followed by financial crisis In Australia , had its effect on the money mar kets of Europe , especially London , In shak ing the cotitldes.ce . of investors In all kinds of foreign Investments , especially railroad and Industrial securities. As a result the n- vestment of foreign capital In American In dustrial enterprises which , during 1891-92. held out great Inducements , was suddenly clicclicd Railroad bonds which heretofore found a ready market in London , Ilcrlln and Amster dam were returned unnurchased to New York Doaton and Philadelphia. The In quiry mado'by foreign bond holders Into the management and solvency of our great rail road systems and other concerns whose se curities were so largely held abroad , was far from reassuring and added to the dis trust. In consequence not only was the mar- kct abroad for American securities of all -descriptions cut off , but largo blocks of rail road and other stock were dumped on the American market. Confidence abroad in American securities shaken , the demorall/a- tlon of credit and business spread at homo. THE PANIC OF 1893. The crisis came on In the spring of 1893. Ono after the other railroads and other great trusts and corporations went Into the hands of receivers. Hanks closed their doors. De posits from savings banks were withdrawn by a panicky public and the money was hoarded. Honk loans were contracted and bank credits refused , crowding business and Industries to the wall. All securities shrank enormously in value and the losses to the country by the collapse In values In prop erty , commodities and Investments ran up into the hundreds of millions. Turning now to the political aspect of the country , the change of. administration from Mr. Harrison to Mr. Cleveland In March , 1893 , was In many respects Inopportune. The conditions of affairs and the policy of the new government wcro of a character to ag gravate rather than alleviate the distress of the treasury for maintenance of the gold reserve. With Us stock of gold already too low. having fallen from $190,000.000 In 1890 to $118,000,000 In 1S 1 and to $114,000,000 In 1892 , and still going down , the treasury was In no condition toistand a protracted run on Us reserve. Especially was this true when the falling'off of Imports due to the slackening of business , and the cutting down of import'duties reduced thereve , nues below the necessary expenses of the government. Allt the conditions heretofore noticed for depleting thetreasury's gold were repeated in violent form. Cus toms , dues and duties to tbo government were paid in gllverauid paper. The demand of the banks on1 the treasury to increase their gold holding by exchanging their greenbacks and silver for gold to meet the call for ready cash ( from foreign and Inland exchange , on the aae band ; the drain on the treasury to inert the exports of gold due to the unfavorablelhalance of trade on the other hand put the administration in des perate straits to maintain Its reserve. The attempt of the 1 treasury to force sliver out of Us vaults Into circulation was futile. It kept flowing Hack to tbo treasury In tax receipts , Unllkd 18S4r8S and 1890-91 the treasury could not 'all back on a large accumulation of gold. All through this crliti , under the condition * Imposed by the Sherman act , 4,600,000 ounces of ellver were purchased monthly , the government paying out treasury notes redeemable In gold for the white metal. Such h strain could last but a short time. In April , ISM , the gold reserve fell below the $103,000,000 level and President Cleveland called congress to gether In extra session In the- month ot July to help out the treasury's distress and the threatened suspension , of gold pay * mcnts. COULD NOT ADSORB THE NRW SILVER. The fact became apparent that the silver Injected In 1890 at the rate of fifty-five to sixty millions a year could not be absorbed Into the circulating medium of the coun try In the same sense as the Issues under the law of 1878. The new currency was moro than even a growing community like the United States could use in Us business expansion and Increase of population. It piled up In the treasury , and drove out gold at nn alarming rate' . After protracted debate , congress , on November 1 , 1893 , re pealed that portion of the act of July , 14 , 1S90 , directing the purchase ot four and a half million ounces of silver bullion per month , nnd the Issue of treasury notes thcrcfdr. The repealing act declared It "to bo the policy of the Unlte'd States to con tinue the use ot both gold and silver as stanila'rd money and to coin both gold nnd silver Into money ot equal Intrinsic and ex changeable value. " Stopping the purchase of new silver was only a palliative , not a cure. Congress failed to relieve the stialn on the treasury by calling In nnd cancelling the greenbacks so as to "break the endless chain In opera tion constantly depleting the treasury's gold and never nci.rlns n final rest. ] ' Import dil- f'3 rml rovniuen kept falling off during the following years , 1S91-9D , and these were paid iuvj u.c L..O.II ) in siuer ami greenbacks , The distrust abroad of the Inability of the government to maintain Its obligations In gold as tlio reserve fell below $100,000,000 In creased the foreign demand on the treasury , keeping the reserve at all times at low water mark , - The heavy deficit of expenditure over In come In the llnanccs of the government , the anxiety and contraction ot credit at home , the "plllnsc up of Idle money In the banks of the country , the uncertainty and doubt of the policy of congress , nil con trlbutcd In spreading business gloom am depression In the avenues of trade and In dustry. With no helping hand from congress to strengthen the public credit , the secretary of the treasury , early In the jcar 1891 , was forced to the cxppdlerit of ths Issue am sale ot bonds for gold under authority con ferred on him by the resumption act o 1879 , to prevent the gold reserve fund o $100,000,000 from being exhausted , Detwcei February , 1WI , and February , 1S9G , the secretary of the treasury sold $262,000,000 ot bonds to obtain gold to replenish the reserve , which had already fallen below $100,000,000 In April , 1893 , and which wen down to $44,000,000 In January , 1895. Uu for the gold thus obtained by the treasurj the government could not have redeemec the greenbacks lu gold and maintained the parity between gold and silver. Reviewing the history ot the sliver sltua Mon , wo find It leading to ono conclusion much at variance with the usual expecta tlons and predictions. The expansion o the silver eurrcncy has followed , and no preceded , the rise In prices , the speculative activity am ? fhe other phenomena whlc5 are associated vlth an Increase In the sup ply of money. The general Impression Is that an Increase In the quantity of money Is the direct cause of a rise of prices. Bu the Increase of our sliver currency seems to have been effect rather than cause. Whei It was first Issued , In 1S78 , at n time of quietude in business operations , It caused no expansion or inflation ; on the contrary , the treasury was tinablo to get the silver Into circulation. The same fact Is even now In 1896 moro apparent. Our ollvcr currency li actual circulation today has been Increased nearly 400,000,000 since 1S7S. Despite this enormous expansion , prices have not risen on the contrary , prices have fallen. When the general revival set In during 1880-81 silver went Into circulation rapidly and In large amounts ; but the movement of silver followed , and did not precede , the general industrial change. When the period ot depression began In 1SS4 , the treasury went through another period of slow circu lation , and "the Issue of silver currency had not the slightest effect In checking the tendency to depression and falling prices. The attempt to got out the silver money simply led to embarrassment ; It flowed back to the treasury In tax receipts. The phenomenon repeated Itself In 1890-91 and in 1S92-'J3. The attempt to put forth moro silver money has had the same effect as It had in 1885 ; It has caused a back-flow into the treasury. For an easy and ready cir culation of silver In any ot Its phases , If that Is to como at all , we must await a re vival of gcncial Industrial activity. CHARLES S. ELGUTTER. I.AHOlt ANI1 INDUSTRY. Rubber horseshoes are gaining In favor. Only union labor can bs employed by con tractors on school work In St. Louis. Under a recent law no new bakeries can bo established lu Ohio below the surface of the sidewalk. Four thousand men In Buenos Ayres , rep resenting a score of trades , have struck for eight hours. A largo firm In London shares profits and gives $460 to every woman e-mployeil who leaves to get married. - Trades union are well organUed In Bel fast , Dublin and Cork , and the Irish Trades congress was recently held at Limerick. Txvo tests of the compressed air motor for street cars wcro made In New York last week , and both were pronounced vhol successful. The Central Labor Council of Cincinnati has been hammering the city authorities for frco public , baths , and proposes to keep at It until the baths are provided. 'Frisco union shoemakers want people to buy homo made shoes , and will probably adopt a label that will indicate that the goods have been made In California. The Chicago branch of the republican cam- nalcn committee has put a clause. In all contracts for printing stipulating that the union label must appear on all work. Some cuilous and instructive facts are brought out In the last annual npoit of the British labor department of 'ho Hoard of Trade. The oggiegato wage-eornins ra pacity , as seen In statistics , has decreased during the last year. The blame for thh Is luld by some on ilio Introduction of the elsht-hour working day. Re.oor's fiom firms who have tried the eight-hour day , however , would seem to show tint there Is no reason for less pay to accompany fewer hours. Ill ono large works , after a reduc tion of the day from twelve houta to right , the labor cost per ton of product came out less. Thq Jealousy of some employers la indirectly referred to , and an Instance la given vvhoro a Manchester llrm dismissed their best man , because they could not think ot allowing one of their servants to earn several thousands of pounds a year. Rather than do this they discharged him , and themselves ceased to make a profit on his most remunerative department. This state of commercial ethics Is hard to understand - stand in , this country , where Jack Is as good as his master , but In England , where the caste Instinct Is still strong , the Idea of a servant making much moro than a living is 'o some men Intensely distasteful. This feeling Is so active that It was re cently stated as an Indisputable fact a largo proportion of English employers would rather earn 1,000 on a ten-hour day than make 1,100 on a day of nine hours. Ono ot" the points touched on In this respect Is especially Interesting. When the eight-hour system was about to be Introduced In Eng , land , Jjts opponents Insisted that the hour saved would be wasted in drinking. This has not nroved to bo the case. On the contrary , < t seems to have had a beneficial effect on both the morals and the physique of the mass of the people. The workers of the country are distinctly more sober than they were , and statistics confirm this. Among the working classes , tea is rapidly superseding beer aa a beverage , and it Is Bald that a great change lias come over the country , not to much In the way of a maudlin teetotallem , as In that of an all- around moderation , The Irish maiden gathers the shamrock and puts It in her shoe , firmly believing that the first man of her own condition In ! life that slip meets , or one of his name , will jo her future husband , The American girl finds a four-leafed clover , and laying It near her heart , repeats "Ono leaf for fame nnd one for wealth , And one for u faithful lover And one to give you glow-Jut' health , : Are lu the four-leaf clover. " TIII3V IH1XT MUSHROOMS. CintlicrltiK of ( InF > < Milrn < FmiRt n I'm ! Tilth ClilcnuoHMR. Mushrooms , like fish , nro said by the Initiated to possess a flavor ot peculiar deli cacy when gathered In by the man who cats them. The mushroom hunter , like the true fisherman , resorts to the market only in the failure ot Ills' own source ot supply , This statement , ot course , applies only to the epicures who.'hunt . ' for their own delectation. Market hunters ETC qulto an other class and are regarded by the nina- teurs with a feeling nkln to that ot the artist for the man who paints pictures for a soap manufacturer. < Mushroom hunting'icmmfs among Its dev otees scores of men , oni ) women In Chicago , who are quite as devoted to their hobby as the china collector or the bookworm , says the Chicago Tribune. In the season they may bo seen wllcll , the lark Is In his beauty sleei > Issuing frtfin their doors with baskets and kntcs | In hand. The epicure who Is unwilling to lose his morning nap may as well give up the Idea ot finding mushrooms. Looking cautiously around , lest their movements may bo observed , they seek their favorite haunts. For the mushroom hunter Is as Jealous of the lo cation of his own particular patch as Is the trout fisherman of his favorite pool. There Is no stronger test of his friendship. Let him Intrust the secict ot his hunting gioutid to n friend and there Is no doubt of his confidence. He will probably seek ono of the parks , a vacant lot , or some pasturn In the suburbs. If he Is early enough and the conditions arc favorable ho may be rewarded l-y a rich find of mushrooms. If too early , by waiting for a time , ho may ste .ihciH poke their heads above the sod. Orvhctl ho Is once sure of his place , he may feel the sprouts before they are fairly through tKe earth , and by turning up the Bed with his knife secure the young mushrooms before they have seen the light of day. Old mushroom hunters acquire a high de gree of skill In locatl'iig the ground most favorable to their growth and In finding them before they arc visible. The mushroom hunter acquires the habit of walking with his ojes fastened upon the earth. Ho may take ii walk with a friend and apparently be engaged In conversation. Of a sudden the friend will to his astonishment see him fall upon his knees and begin to dig fran tically In the sod with a knife' . What ap pears to be the act of a maniac may In real ity mark the discovery of a now and prolific mushroom bed. Mushroom hunting not only takes posses sion of the victim , but Is likely to extend to his friends nnd relatives. The friends' Interest may at first bo lukewarm , but with their taste for mushrooms grows the passion for hunting them till the habit claims them for Its own. Mushroom hunters are found In all parts of the city and In nil walks of life. Many of them arc pcoplo well known socially or In business , who have a delicacy In publishing their hobblrs to the world and who decline , therefore , to make their names public. The neighbor hood of Due nil park , Rogers park , and Evanston Is said to be populous with them. Many who become Infected with the bnblt are said to take up the study ot mmh- rooms In earnest nnd to become versed In their lore. Considerable knowledgeami skill are required In distinguishing the edible varieties under all circumstances , i William Hamilton Gibson's work .on mushrooms - * . rooms Is an authority consulted by most ot the mushroom students. The advice ot an old mushroom hunter to beginners ! : "Do not take any chances. It you1 nro In doubt about a mushroom , do riot cat It until you have consulted 'nomebody who knows. " Most of thu old-hunters arc au thorities nnd their judgment Is sufficient. The chefs of the leading hotels and cluba are usually able to distinguish the cdlbla varieties. The parks , vacant lots , nnd the pnsturem nnd wild lands In the suburbs nro fnvorlto habitats of the mushroom. Many mush rooms nro found In the parks , In particular In parts where fertilizing matter has been recccntly applied. During the season the parks nro minutely searched every morning. It Is whispered by trull and vegetable dealers that amateur hunters are known to sell their surplus product , but this aspersion V' ' Is resented by the fraternity nt large. At any rate , thcro nro market luinters enough to make the chances of a mushroom for a long life exceedingly few. If the table hunter expects to be ahead of them ho must bo up bright and early. Mushrooms sell In the market at from 20 cents to CO cents a pound , The market hunters often bring In from five to ten pounds n day. Many of them are Germans or Itnllnns , who make ) n business of mushroom hunting In the season. The mat kct hunters follow tha same plan aa the amateurs. Many of them nro up by 3 o'clock In the morning to bo on the ground In time. The country about Whiting , Ind. , Is said to bo frequented by the market hunters. Some ot the choicest of the mushrooms In the Chicago market arc supplied by florists , who cultivate them ns a by-crop. Another source of supply Is the niushioom farms In the northern part of the state. The spring just passed was said tn bo unusually favor able , from Us unusual warmth nnd moisture. DiuinliltTH unit 1'uiir Children. The King's Daughters of New York City have been doing n wonderful work among the poor children during the last few weeks. An Immense playground has bocn fitted up with every form of nmusenient. There U a kindergarten , a circulating library , n girls' club , a boys' club , a flower mission and a penny pavings bank. Dy the last cs ineans each child opens an account by re ceiving n stamped card representing the deposits. A tax of C cents Is charged when the money Is withdrawn as n check upon spending money too easily. Hundreds of the mothers and children have been taken for excursions on the Hudson. Mrs. Gcorgo McGrovv Is chairman of the chapter. 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