mon, of Ohio; Postmaster-General, Wilson S. Bissell, of New York, followed by William L. Wilson, of West Virginia, in 1895; Secretary of Agriculture, J. S. Morton, of Nebraska.

Previous to the election the condition of the treasury had been precarious, and the Secretary made strenuous efforts to maintain the redemption fund above $100,000,000. In the latter part of 1892 and the early part of 1893 the drain on the reserve had been heavy, but the banks advanced enough gold to the government* so that when the Cleveland administration came in the new Secretary of the Treasury had "$100,982,410 in the gold reserve and barely $25,000,000 in other forms of money." This condition of affairs unsettled the money market, for it was feared that the government would not be able to redeem the legal-tender notes in gold coin. This, therefore, was the chief cause of the panic of 1893. The utterances of the Secretary of the Treasury did not allay the feelings of apprehension and the public mind was on the verge of panic, ready to be swept into active eruption or com

Taussig, The Silver Situation, pp. 57–62.

Noyes, American Finance, p. 184. See also the Report of the Secretary of the Treasury for 1893, p. 75; Cleveland, Presidential Problems, p. 132 et seq.

This conclusion is reached by Lauck in his Panic of 1893, pp. 110-112. He says that "the crisis of 1893 did not arise from any difficulties abroad; it was not due to an

extension of mercantile and industrial credits, or to a scarcity of money in the United States," but was caused "by widespread apprehensions as to the fixity of the gold standard of payments."

placent quiescence as the course of events might decide.

a

But events were adverse to a peaceful solution of the difficulty. On February 20, 1893, the Philadelphia and Reading Railway, with $40,000,000 capital and $125,000,000 debt, went into bankruptcy, followed on May 5 by the National Cordage Company, with $20,000,000 capital and $10,000,000 liabilities. As the stocks of these companies were largely delt in on the exchanges, the failures caused slump, carrying with them the whole stock market. On June 26 the government of British India suspended the free coinage of silver and the price of silver dropped from 82 cents to 67 cents per ounce in three days. Later came the announcements of the failure of the Erie Railroad (July 25), and the suspension of the Milwaukee Bank. Bank depositors became frightened and withdrew their deposits, the strain being particularly violent on the New York banks, the reserves falling below the legal requirements of 25 per cent. on July 8 and continuing so until September 9. The Western banks now began to call their loans placed with New York banks, and to keep these banks from suspending the Eastern banks during July shipped as much as $11,000,000 in cash each week to the interior.‡

* For the range of prices of stocks see Lauck, Panic of 1893, p. 99.

Horace White, Money and Banking, p. 202. Noyes, American Finance, p. 192 et seq. Lauck, pp. 100, 101, says that "the deposits of the Clearing House, which were $431,000,000 in round numbers on June 3, had been reduced by August 29 to $370,000,000."

It was obvious that this state of affairs could not continue, and as the greater part of the trouble was charged to the Sherman Purchase law, President Cleveland on June 30 convoked the Fifty-third Congress in special session to assemble on August 7 to enact remedial legislation. Upon assembling Cleveland transmitted a message in which he asked for the repeal of the Sherman silver act.* A bill carrying such a provision was introduced August 11 by William L. Wilson, of West Virginia, and passed without amendment by the House, August 28, by a vote of 239 to 108.† The Senate, however, did not act upon the bill for two months, but it was finally passed by that body (October 30 by a vote of 43 to 32 and by the House on November 1 by a vote of 194 to 94). It was signed by the President November 1 and became law.||

"The production of coal, both anthracite and bituminous, fell off; the output of pig-iron, which had been about 9,157,000 tons in 1892, fell to 6,657,000 tons in 1894; new railway construction almost ceased; in 1894 there were 156 railways, operating a mileage of nearly 39,000 miles, in the hands of receivers * *. The total capitalization in the hands of receivers was about $2,500,000,000, or onefourth of the railway capital of the country.

commercial failures

increased from 10,344 in 1892, with liabilities of $114,000,000 to 15,242 in 1893, with liabilities of $346,000,000."

"More than two hundred railway companies, representing fifty-six thousand miles of track and one-fourth of the railway capital of the country, went into the hands of receivers between 1892 and 1896."

"Commercial failures alone in 1893 were three times as numerous as those of 1873 and the aggregate liabilities

involved were fully fifty per cent. greater. It was computed that nine commercial houses out of every thousand doing business in the United States failed in 1873; in 1893, the similar reckoning showed thirteen failures in every thousand.’*

66

The problem of the unemployed became general and many relief committees were organized in the large cities to provide food and other necessities. In several cities there were demonstrations of the unemployed. On April 21, 1894, 130,000 miners throughout the country stopped work. They were afterward joined by 25,000 more. An industrial army under J. S. Coxey marched on Washington during the last half of April to demand help from the national government, in the form of an issue of $500,000,000 in non-interest-bearing notes to be used in the improvement of roads, thus giving work to the unemployed. Railway cars for transporting the army were appropriated and the advance guard reached Washington April 30. On May 1, they attempted a demonstration on the steps of the capitol but the leaders were arrested for "trespassing" on the capitol grounds. The strike ended June 18.

On June 26, 1894, the American Railway Union declared a boycott of Pullman cars, as an expression of sympathy with striking Pullman employees. The strike spread and railway traffic was almost entirely sus

Noyes, American Finance, p. 201; Lauck, Panic of 1893, pp. 105-156.

pended from Chicago to San Francisco. The United States courts in Chicago, July 2, issued sweeping injunctions against the strikers, and General Miles and a detachment of United States troops were ordered to Chicago to see that the mails were not delayed and to suppress rioting.

On the 8th, President Cleveland issued a proclamation calling upon the strikers to disperse and on the following day issued another proclamation against mob violence in California, where United States troops were fired on and a train carrying them wrecked. President Debs and several other officers of the Railway Union were placed under arrest on the 10th. The backbone of the strike was now broken and with military protection railway traffic was gradually resumed. The strike ended July 15.*

Labor troubles, however, continued to exist in many manufacturing towns, strikes occurring at New Bedford, Fall River and New York. In January, 1895, the employees of the Brooklyn electric railway system went on strike and during the following month much rioting occurred. The militia.

*Wright, Industrial Evolution, pp. 313-317; William H. Carwardine, The Pullman Strike; W. F. Burns, The Pullman Boycott; E. A. Bancroft, The Chicago Strike of 1894; Senate Ex. Doc. No. 7, 53d Congress, 3d session; Andrews, Last Quarter-Century, vol. ii., pp. 330-346; Grover Cleveland, The Government in the Chicago Strike of 1894, in The Fortnightly, N. S. vol. lxxvi., pp. 1-19 (London, 1904), in McClure's Magazine, vol. xxiii., pp. 227-240 (New York, 1904), and in Presidential Problems, pp. 79-117; Schofield, Forty-Six Years in the Army, pp. 491509, giving official proclamations and dispatches regarding the use of government troops.

was sent to restore order and the strikers quickly subsided.

In 1895, Carroll D. Wright, in the tenth Annual Report of the Department of Labor, made the following

statements:

"In that time [1881-1894] there were in the United States 14,380 strikes, in which 69,167 establishments were involved, and the persons thrown out of employment numbered 3,714,406. The loss in wages is estimated to be $163,807,866 for strikes and $26,685,516 from lockouts; the loss to employers, $82,590,386 in strikes, and $12,235,451 in lockouts. To the losses of wages must be added $5,262,000 paid to strikers by labor organizations. The strikes were successful in 45 per cent. of the cases, and partly successful in 12 per cent. The effort to raise wages led to 25 per cent, of the strikes; to reduce the hours of daily labor 13 per cent.; to resist reduction of wages to 8 per cent.; both to raise wages and reduce hours to 6 per cent.; 7 per cent. were sympathetic; 4 per cent. to prevent employment of nonunion men, and 3 per cent. for recognition of trade unions." *

The year 1894 was also a year of agricultural disaster. A drought ruined the corn crop of Iowa, Kansas and Nebraska, so that the yield was only 25 per cent. of what it had been in 1893.t The yield of wheat was large, but the European crops had also been large, and thus as there was no market either abroad or at home, the price of wheat fell until it reached its lowest mark- forty-nine cents per bushel. This was the situation facing the government when the attempt to reform the tariff was being made. But as the administration was pledged to it the attempt was made. On December 19, 1893, the bill was in

See also Coman's Industrial History, p. 333 et seq.

† Annual Reports. Department of Agriculture, 1893 and 1894.

troduced in the House.* This measure bore the name of William L. Wilson, of West Virginia, Chairman of the House Committee on Ways and Means, and it provided for the import, free of duty, of raw sugar, lumber, coal, iron-ore, hides, cotton ties, binding twine, fresh fish and wool, and substantially reduced the duties. on many articles listed in the McKinley law. In January, 1894, a bill imposing a tax of 2 per cent. on incomes over $4,000 was introduced in the House, and consideration was given to other bills concerning internal revenue, all of which were incorporated in the tariff bill during the subsequent debate. The bill was then passed (February 1, 1894) in the House by a vote of 204 to 140.‡ The Senate, however, under the leadership of A. P. Gorman, of Maryland, radically altered the bill, replacing the duty on iron-ore, coal and sugar,|| and on August 13 forced the House to accept the amended document.§ The bill as thus shaped became the Gorman-Wilson tariff law of 1894, but President Cleveland refused to sign the bill and it became a law without his signature on August 27, 1894.¶

Meanwhile the condition of the treasury was a continued source of *Record, 53d Congress, 2d session, vol. xxvi.,

p. 415.

† Stanwood, Tariff Controversies, vol. ii., p. 20. Record, p. 1796; Stanwood, pp. 321-326. Record, pp. 1804, 3126, 3389-7136, 7188-7195. $ Ibid, pp. 7714, 7930, 8482.

Ibid, p. 8666; Stanwood, Tariff Controversies, vol. ii., pp. 327-359; Proctor, Tariff Acts, pp. 443-473; Dewey, Financial History, pp. 455-458; Noyes, American Finances, pp. 223–231; F. Pierce,