THE SIX MILLION LOAN.*

APRIL 10, 1884.

MR. PRESIDENT: What our eyes have seen, our ears have heard, and our hearts have felt without these walls, is now brought home to us in this place. The title of this bill proclaims that an alarming crisis has occurred in our commercial condition, and that a mighty effort is necessary to rescue the people of this state from imminent unbearable suffering. I would, above every other offence, avoid that of bringing to this debate a contentious, an interested, or selfconfident spirit, and would, on the other hand, invoke the spirit of mutual conciliation, that we may reason together upon the causes, nature, and extent of the calamities experienced and apprehended, and search out and apply a proper and adequate remedy.

The proposition to which I shall first call the attention of the Senate, is, that the message of the governor, and the report of the committee, are erroneous and unsatisfactory in regard to the nature and extent of the evils existing in the country. Those documents assert the existence of "a state of commercial embarrassment," "a pressure," "a shock to business." But neither of them assumes that the evils now existing are so great as to require immediate relief. The bill which they recommend is intended to provide for more serious evils expected to occur during the recess of the legislature, and to be produced by some hostile action of the United States Bank. While I see no cause to apprehend any danger from the future action of that institution, I maintain that the pressure under which the people of this state are now suffering, is one altogether unnecessary, and demands immediate relief.

Sir, there may have been prudence hitherto in keeping silence

* Speech in the Senate of New York, on the bill to loan six millions of dollars on the credit of the state.

concerning the pressure. But that time has gone by. The legis lature which would shut out the evidences of suffering it proposes to relieve, would be as unpardonable as the physician who would prescribe a remedy for a fever, without consulting the symptoms which indicated the character and malignity of the disease. It is now the part of neither wise nor honest men to deny the pressure in its full aggravation.

About three months have elapsed since it was first experienced in New York. The first indication was one of a character that seldom misleads-stocks of all kinds fell 5, 10, 15, 20, 25, 30, and in some instances almost 50 per cent. Foreign and domestic commerce have been, and still continue, greatly obstructed-bills. on foreign countries return dishonored-stocks depreciated, no longer serve as remittances-accustomed accommodations are withheld-receivables are protested-merchandise has fallen in value-jobbers, retailers, purchasers of cotton, wool, tobacco, wheat, and other produce, have in a great degree suspended their purchases. More than a hundred merchants, several bankers, many manufacturers, have yielded, and those who have not done so, cautiously avoid making new engagements. The consequences have been, a depreciation of property of every kind, and the interruption of business everywhere. Although the pressure fell first upon the merchants, it has since visited every class of citizens the mechanics, the manufacturers, the seamen, the carmen, the laborers at the wharves and in the streets. Operatives are dismissed from employment, and consequently labor becomes redundant, and wages decrease. Sir, we have seen in that city a new spectacle, one which neither you nor I have ever seen before, and which I trust in God we may never see again. We have seen all these classes of citizens assembling in tumultuous meetings, complaining of the derangement of business, and sending committees to Congress and the President, to implore relief. But it is said these meetings have been partisan and factious. I ask, are those the classes of men ordinarily liable to factious excitement? When was it before, that in the midst of profitable employment, they simultaneously left their labors to congregate in the Park, the Exchange, and the streets, and to set up a factious clamor of pressure and distress, which was sure to produce the evils of which they falsely complained? Sir, I have seen in certain newspapers, charges that individuals have dismissed laborers

for opinion's sake. Without inquiring which political party has exceeded the other in this mode of political action, or with what grace the charge comes from those who proscribe from all public office for independence of opinion, I will, for this question only, admit the charge to be true, and then I ask, when before did it happen in this country, that the employer could dictate conditions to the laborer, and above all, conditions of political action?

Like those living remote, who hear of the plague which desolates the city, but think that it cannot reach them, because they cannot see it on its march, we, for a time, thought this pressure could not extend into the country. But there are now seen and heard the indications that it has already become universal. The financial departments of the general government, and that of this state, are equally affected. The general government, instead of a revenue of twenty millions, is now reckoning on one of not more than half that sum. In this state we have of funds belonging to the treasury, more than two and a half millions, accumulated for the purpose of paying the debts of the state, and lying in deposit in banks. Our stocks were never so cheap. By buying them, we not only could avoid all possible risk of loss or waste of these moneys, and stop the increase of interest, but we should also make a saving of more than one hundred thousand dollars. Why do we not buy them? The banks require the money, and we leave it there to sustain them. Instead of calling on them to pay the two and a half millions they now owe us, we are about to borrow, at a loss to the state, six millions more, four of which are to be loaned to the same institutions. We are loaning four millions to banks which already owe the state an amount greater than that of all the specie in their vaults. The stock of the Delaware and Hudson Canal Company, which owes us $750,000, is reduced to 17 per cent. below par. The season for the opening of the canal is at hand; no one reckons on a revenue from it to exceed two-thirds of that of the last year. The construction of the Chenango Canal will require, during the present and the next year, the expenditure of the million of dollars appropriated. But the canal board have forced the entire stock into the market, at a great and inevitable loss, to obtain $900,000 to deposit and sustain the banks, instead of issuing portions of it from time to time, as the gradual progress of expenditure may require. The entire system of improvements by incorporated companies has been affected. The Mohawk and Hudson Railroad Company

have recently contracted a loan, at the unusual rate of six per cent. interest, with the privilege to the lender, to convert the loan into stock, at par, within two years. The stock of the Saratoga Railroad Company has fallen 15 per cent. That of the Utica and Schenectady has fallen in proportion, and were any considerable instalment to be called for, it would sink below par. A competition existed for railroad charters, at the commencement of the session. No one now believes that the stock of a single company will be subscribed.

Individual property and enterprise have been no less affected. Banks having ceased to discount, their profits are now reduced, and their stock depreciated. Manufactories are everywhere struggling to sustain themselves, by contracting their operations. Most of the great western mills have been stopped. From all that I have learned, I have no reason to doubt that the depreciation of real estate, throughout the state, is 33 per cent. Produce stands at the same nominal price, in Orange county and on the Genesee river. And yet, the pressure is only at its first stage in the country. As surely as there is a scarcity of money, so surely property and the value of labor must depreciate, and business must be arrested. The paper of the country merchants is falling due, and is, as I am informed, accumulating in unusual masses, under protest, in the country banks. Much of the merchandise purchased last fall, is unsold. For what has been sold, the merchants do not yet expect payment. They rely, as they always have relied, upon the banks for accommodations-and those accommodations are denied. Sir, I am told that, if the banks continue closed, the merchants in the country will be unable to pay more than one-third of the paperfalling due this spring. The consequence must be, that business will be still more generally obstructed, and a fearful addition will be made to the list of bankruptcies. Let no man say that the sufferers are merchants and speculators, incurring only the common hazards of their profession. If the suffering were confined to them, I would nevertheless repudiate the maxim, that they are not entitled to relief. Sir, our farmers and our mechanics employ borrowed capital, they contract debts-and there are few of either class who can sustain themselves during a season of depreciation of farms, produce, and labor. As surely as commerce sustains and invigorates every department of business, so certainly will its stagnation produce that general depreciation. Those who grow rich

on the spoils of the merchants, will swell their gains from the distress of the farmers.

I shall be told that the pressure is relaxing. The indications to that effect are a proof, indeed, that business is adjusting itself to the pressure. Those who have already failed, need no more money. Those who can avoid failing, want much less for new engagements. But, if it be only thus that the pressure is to be relieved, and even supposing that no new obstacle interpose, then the return of prosperity will be so slow, that the country must yet undergo more severe suffering than it has yet experienced.

Sir, the picture I have drawn is in gloomy contrast with that presented by his Excellency, and the joint committee. If it be thought too deeply colored, I may be suffered to say that they and I have both spoken before.

The governor, in his annual message, and the committee, in their action on the resolutions concurring in the removal of the deposits, plainly declared that they had no apprehensions of the pressure they now admit. I then predicted what is now realized. It is not for me to assign the reasons why his Excellency considers the present pecuniary embarrassments of the country so trivial. There is a trite opinion that rulers seldom sympathize with the people. Certain it is that, in the present instance, the executive chamber, in this capitol, is as inaccessible to the voice of complaint as the executive palace at Washington. But I confess I am surprised that this pressure is so lightly regarded by the joint committee, when I recollect that among its members are two distinguished gentlemen representing the city of New York, whose interests have been so vitally affected. The fact may serve to show how much a temporary removal from our constituents tends to weaken the influence of our relations toward them.

Sir, if the view I have taken of the pressure existing is at all correct, it follows that if relief is to be afforded, that relief ought to be certain and immediate, not remote and contingent, as is that proposed by the bill under consideration.

Let us now consider the question-What was the cause of the destruction of confidence? During the year 1833, the country was in a most palmy state of prosperity. The tendency of such a state of commercial business as then existed, is to a condition of more active and extended enterprise. We have experience now to prove that there was no obstacle, like that of over-trading, to