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discretion, but it was something a little less than courage that
animated them. Pride, or recklessness, or hunger for post-
humous fame may prompt such deeds as these, but when a lofty
soul, to shield a fellow-man, with only conscience to approve,
can face the world's disfavor and jeopardize the affection and
esteem of his most valued friends, he then, for once, reveals the

image of his Maker.

T. Fletcheb Dennis.



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THE PANIC AND THE SILVER MOVEMENT.

BY A. B. AND H. FARQUHAR.

IN THE presence of a great and general calamity sach as a
foreign war, a domestic insarrection, or a commercial crisii*,
dne to the forces of haman association and not those of un-
chained nature, no thought is more natural than that this dis-
aster could have been prevented. It was brought about, we say,
by thinking beings, and a little more thought could have warded
it off. Comparing the lamentable ills from which the country is
suffering with any possible good that could have been found in
the acts which precipitated them, our indignation at those acts —
whatever we may believe them to have been —inevitably rises ;
and we lament the stiff-necked x>erversity in which they had
their source. Such is the general course of thought; such
views, in one shape or another, have been held and uttered by
all who have considered the crisis of 1893-4 ; and such is doubt-
less the explanation of articles like that entitled '^ An Artificial
Panic in Retrospect," in the June Journal of Politics.

If this natural tendency of the thinking mind could be re-
pressed by anything, it would be by observing that the unanim-
ity with which the disaster was voted to have been preventable
does not survive a discussion of the means that should have
been taken to prevent it. Inquirers are of one opinion in lay-
ing the blame on the folly of human act and the blindness of
human discernment ; but when it comes to specifying what acts
were foolish and what men were shortsighted, there are almost
as many opinions as inquiries. It may easily be shown that the
war or business crush might have been escaped if this set of
men had yielded the right amount, at the right time, but so
long as the same thing may be as easily shown for that set of
men, and the other set, we cannot fasten the responsibility cer-



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THE PANIC AND THE S IL VER MO YEMEN T 85

tainly and individaally upon any. Thus it might be i>06sible to
agree with Mr. Knapp that his ''associated banks'' and ''gold
syndicate'' and what not, could have postponed the panic of
last summer by conducting their business differently, and yet be
no less unwilling to hold them solely accountable for a calamity
which could have been altogether avoided if people had other-
wise performed their part. But, as will be seen, Mr. Knapp
hardly makes even a plausible case against the men he de-
nounces, so that this slight measure of approval is all too liberal
for his essay.

Not that there are not some true things in this "Artificial
Panic" paper. The writer is justified in claiming that a strong
specie reserve, like that of France, has its advantages. To be
sure, a third of the French per capita currency, consisting of sil-
ver stored in bank vaults, has no monetary function whatever,
and the country might practically as well be without it ; but the
gold reserves of that country, added to its coin in actual circu-
lation, undoubtedly give it exceptional strength. But the im-
portant i>oint here to consider is that this exceptional strength is
purchased at exceptional cost The French hold more money
than the English or our own countrymen, because they need
more to accomplish the same amount of business. They get
nothing like the same amount of work out of their 25 francs
than the English do out of their pound sterling or we out of $5.
A country cannot do business in the Eoglish way, or in our own
way, and at the same time keep a x>er capita circulation on the
French scale, because the laws of supply and demand do not
permit it Coin is value in a highly mobile form, and it in-
variably glides away in the direction where the demand for it is
strongest Unquestionably we sometimes suffer inconvenience
from our habit of getting more work out of the same sum of
. money than the French do ; but until our business men can be
persuaded to give up this habit, the attempt to supply our
country with a currency of $50, or even $30 per capita, of real

money, will necessarily fail.
Bat if we have to admit the truth of a conclusion, here and

there, in Mr. Knapp's paper, we must be equally prepared to



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86 THE AMERICAN JO URNAL OF POLITICS,

encounter a total lack of truth elsewhere ; for there seems to be
no other way to characterize the monstrous assertion that ^'we
have refunded our war debt in the interest of national banks,
until it will now take much more labor to pay what remains than
it would have done to settle the whole when it was first con-
tracted." Oar war debt is now a little over a third of what it
was when first contracted, while the cost of labor, instead of fall-
ing to one third of its former figures, has actually risen. State-
ments of this kind are often based on the fall in price of agricul-
tural staples. The country now produces double as much, in
amount, as it did twenty years ago, while the increase in value
is very much smaller — approximately stated, about one fourth.
Bat it is absurd to estimate the labor cost of our doubled crops
at double that of the crops of 1870 ; the fall in price is due far
more to economy in the application of labor than to any appreci-
ation in the standard of value, if indeed the latter factor is i>er-
ceptible at all.

Very little higher estimate can be pat upon several other as-
sertions, as that about the coinage job of 1878, as having ^' been
the only cause of the measure of good times we have had since,"
or that about exports of gold as '* most foolishly charged to con-
tinue silver purchases" — ^as though it were foolish to see that
the effort to set up an artificially higher price for one of the
country's products, must inevitably result in curtailing our ex-
port of that product, and thus increase our export of some other.
Points like these may be noted perhaps, as specimens of the ar-
ticle we are examining ; they hardly need an elaborate refutation.

It seems worth while to vindicate the president from the
charges made against him by Mr. Knapp, that he conspired ''to
treacherously overthrow silver," when he first sought to have the
bullion purchase clause repealed, that the gold exports on which
he supported his subsequent efforts to the same end were ''arti-
ficially" brought about, and that he gave his party friends to
understand, as a condition of their cooperation in those efforts,
that he was willing to do something handsome by silver "at the
general session in December." It would be imi>06sible to prove
that nobody in the country, during the campaign of 1892, mis-



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THE PANIC AND THE SILVER MOVEMENT. 87

nnderstood Mr. Cleveland's position on the coinage question;
bnt it is difficult to believe that anyone in Colorado could have
entertained any doubt The greater part of the Democratic
party in that state bolted the presidential ticket that year, pre-
cisely because the candidate would not make the professions that
Mr. Knapp now insinuates that he did make. Secondly, there
is no evidence of conspiracy in the gold exportatlons, even in the
words quoted from Mr. Clews — ''more gold was shipped than
Eurox>e required,'' etc. Markets had often been glutted before
without conspiracies, and the same thing doubtless occurred then.
Finally, no promise that ''silver would be satisfactorily recog-
nized" can be traced to President Cleveland, and it is safe to say
that if the recognition was to take any form in which the sol-
vency of the national treasury should be in the least endan-
gered, he made no such promise. Votes to sustain the adminis-
tration on a point so vital to it, cast by loyal Democratic repre-
sentatives and senators, needed no entangling promise to ex-
plain them.

On page 660, Mr. Knapp makes the astounding declaration
that "the proof that this panic was most unnatural and crimi-
nal, appears from an order issued by the management of the as-
sociated system to all national banks to secure concerted action,"
etc., etc He goes on to quote from this circular, dated March
12th, 1893. Now, since there is no such "associated system,"
no such circular was issued, nor was it received by "all national
banks," or any of them, so far as we can learn ; nor would it
have merited the slightest attention had it been received. If
not criminally careless in his statements, Mr. Knapp is the vic-
tim of a hoax.

It is assuredly a singular result of the singular "order issued
by the management of the associated system to all national
banks," for the purpose of securing "the future life of national
banks as fixed and safe investments," which Mr. Knapp quotes
(not literally, however, but "substantially") as proof of flagi-
tious "pilrpose," that thereupon "bank and other failures com-
menced by the wholesale." Was it part of the banks' conspir-
acy to bring disaster upon themselves f Or were the banks that



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V
88 THE AMERICAN JO URNAL OF POLITICS.

were forced to fail ased as cat's-paws f And, if so, how and how
mach have any other national banks gained by their losses f
The great gain alleged to be in store for the national banks from
''an artificial panic," is found in the issue of more bonds: 'Hhey
demand an immense national debt to perpetuate their exist-
ence." On the contrary, they demand no such thing. Their cir-
culation, of course, depends on the national debt, as the law now
stands ; but the issue of circulating notes is not the whole '^ex-
istence" of banks, nor even the most important part of it. The
motive alleged for this order appears, therefore, so insufficient
as to be even absurd.

One of the grievances from which this writer sufifers is "clear-
ing-house gold certificates — for circulation among the banks
only," and an accompanying repletion of money in the banks,
along with scarcity " among the great mass of the people." We
cannot deny that such things do happen, nor undertake to main-
tain that the banks have earned the partial favors of fortune by
greater patriotism, or greater virtue of any kind. But why will
people be so blind to the real lesson of their own facts f Money
goes to the banks because the banks have credit, and away from
the great mass because the great mass are unfortunately without
it. Where the credit is, there shall the money be also. There
was a time, last summer, when the credit of the banks was im*
paired ; then the money left them, and they were sorely straitened
for lack of it. Again, it is gold, pray observe, that piles up in
the banks. To people like our writer, this fact is proof that a
great comer in gold is preparing, the volume of that metal be-
ing insufficient for monetary uses — ^but that is all moonshine.
People who have to hold a reserve will always choose the best
money for it — money, that is to say, which is certain not to de-
preciate on their hands. They choose gold in this country, only
because they do not feel absolutely assured that the gold dollar and
the silver and currency dollar may not at some time part com-
pany. Who would not rather hold the pai>er of a house whose
solvency is unquestioned, than of one upon which the very
smallest atom of doubt rested f

We are treated in this paper to a totally new economic prin-
ciple ,- that a gold basis " necessitates debt ; for under it there is
an insufficient supply of money to carry on business and de-
velopment, which must be done by borrowing." Further along



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THE PANIC AND THE SIL VER MOVEMENT. 89

we find I " The recent moves made to bring the United States,
Austria-Hangary, and India to a i>ermanent gold basis, will
make it more difficult for ns to maintain gold payments in the
future, and compel the frequent addition to our debt for that
purpose." The value of a proposed principle of this kind can
best be tested by inquiring where we would be without it, what
we could do by the light of our unassisted knowledge. If
Knapp had not spoken, we would probably say that the increase
or decrease of our debt depended on the relation of the two
quantities, revenue and expenditure, and was not afifected in
the remotest degree by the kind of unit in which those quan-
tities were reckoned ; that by imposing sufficient taxes and ob-
serving proper economy, we could reduce and finally discharge
our public debt, whether we called it gold or called it silver ;
and vice versa. And now, if Mr. Knapp will i>ermit us, we
shall continue to say so. This supposed discovery is, in point of
plain fact, nonsense.

A plea for ''the restoration of our ancient and constitutional
right to free and unlimited coinage of silver by the people"
ends the story. That will be cheerfully granted, under either of
two conditions. First, supposing the right in question to have
been taken away about 1873, we observe that the largest coinage
of silver in any year previous (we have to be particular, for the
coinage at once increased after the right to coin was cut off) was
only $9,000,000 of all denominations. The first suggested condi-
tion is that the coinage in any one year shall not exceed $9,000,-
000. Secondly, if that be refused, and the limit be left blank,
we only ask that the silver so coined shall not be used to pay
obligations incurred in gold or its equivalent. In other words,
have all the silver you want^ on the simple condition of not
using it in swindling other people.

What is the true explanation of the panic f There were two
panics, the first brought about by distrust of the country's
ability to maintain all its currency equal to gold, in the face of a
rapidly depleting stock of gold in the treasury, on which alone
the parity depended ; the second, a sort of travesty of the other,
a distrost of investments generally because investments depend-
ing on the maintenance of gold payments had grown doubtful.
The second panic may have been unavoidable, but it was none
the less unreasonable. A. B. and H. Pabquhab.



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THE OUTLOOK.

[Notes and comments concerning affairs of interest to intelligent and
patriotic citizens. Address communications for this department fjo
Outlook Departments American Journal of Politics^ 114 Nassau
Street^ New York City,']

Advantages of **The Outlook."— With every month matters
of interest present themselves which cannot be discussed in the form of
articles, but concerning which timely and valuable information may be
given in the way of notes and comments. This is one of the purposes
of this department ; but its larger purpose is to malce The American
Journal op Politics more useful in furthering the objects to which it
has always been devoted, and in promoting which it will hereafter
have the valuable cooperation of the American Institute of Civics.

There will be opportunity for the free interchange of tersely expressed
thoughts upon all pertinent questions, and every reader is asked to re-
gard these pages as a forum always open for utterances relating to
affairs in the field of civics, and this field is to be considered as in-
cluding all that concerns the highest interests of a self-governing peo-
ple, from the unit which is the home of one family to the nation
w^hich is the home of all.

The Journal, in this department, will not only record the progress
of the work directed by the Institute, and be H medium through which
it may especially speak to its members and the general public ; it will
also afford opportunity for summary statements concerning the pro-
gress of all organizations and movements which have for their object the
promotion of the same high interests. It will thus aid in realizing one
of the chief aims of the Institute, which is, without interference in the
matter of specific methods, to promote the intelligent patriotism, the
civic virtue, and the practical unity in action, which shall give in-
creased power to the citizens and organizations of citizens, whose
sympathies and activities are unselfishly directed to the accomplish-
ment of the great end of realizing and maintaining good government
through good citizenship.



The American Institute of Civics.— Information as to the ob-
jects of this noble institution is elsewhere presented, but it may here be
briefiy said that they are "to promote everywhere, and through all
practical agencies, including home infiuences, educational institutions,
the press, and the platform, the integrity, intelligence, patriotism, and
vigilance which are essential to the commonweal under the rule of the
people. '^ The Institute, in the nine years since its formation,asevidenoed
by an infiuence everywhere felt, has been a consistent and powerful ex-
ponent of the worthy aims which it represents. As expressed in the



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THE OUTLOOK. 91

Institute's articles of incorporation,* tiiese purposes are **To promote,
without reference to the inculcation of special theories or partisan views,
a patient and conscientious study of the most essential facts relating to
afllairs of citizenship and government, to the end that every citizen may
be qualified to act the part of an intelligent and upright juror in all
affairs submitted to the decision of the ballot.'' What the Institute has
done in furtherance of this aim through its occasional publications, and
with a serious drain upon its resources, will continue to be done, and
under its auspices ; but in such manner as to secure a large saving in
expenditures in its press department, and a corresponding advantage
to its other departments. While the distribution of literature thus se-
cured will be the same in kind, it will be far larger in extent ; and its
presentation in a magazine, which aims to occupy a foremost place
among periodicals of its kind, and through which the' Institute may
speak to its readers and the public monthly, will be attended by so
many advantages that the members of the Institute, not less than the
former readers of The Journal, have reason to give the new arrange-
ment their cordial approval.



Alliance of The Journal and the Institute.— The arrange-
ment by which The Journal becomes associated with the Institute,
therefore represents an alliance of forces directed to the accomplish-
ment of common purposes. Conducted by the same publishers and the
same editor-in-chief. The Journal will undergo no changes other than
those resulting from valuable additions to its editorial staff and corps of
contributors. It will have even a higher standard of excellence, and
the larger usefulness attendant upon an increased circulation. This
alliance will therefore make the magazine not less, but more valuable to
its former readers. Its new readers, the worthy citizens by whose un-
selfish cooperation the Institute of Civics has been placed ** in the
forefront in a great patriotic movement that nothing can prevent f^om
going forward," t will find it, as the spokesman of the press depart-
ment of their honored institution, an exponent of the same purposes
which have inspired the publications (equivalent to more than 16,000,-
000 octavo pages) sent forth at different times and in different forms
through that department.

With a degree of success indicated by the unqualified commenda-
tion of representative secular and religious journals of every shade of
opinion, and a continually increasing circle of appreciative readers.
The American Journal of Politics will use its every effort to
promote ** the integrity, intelligence, patriotism, and vigilance which
are essential to the commonweal under the rule of the people."



Woman's New Opportunity.— This is the title of a brochure % by
Daniel Qreenleaf Thompson, Esq., of the New York bar, and of the

* Prepared with the aid of, and with others signed by, the late Chief Justice Walte,
of the United States Supreme Ctourt, first president of the Institute's board of trustees.
+ New York Mail and Bzpress,
X Longmans, Green A Co., New York. 25c.



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92 THE AMERICAN JO URNAL OF POLITICS.

faculty of the Institute of Civics. It is the substance of a thoughtful
and suggestive address delivered before the Woman's Law Class of the
New Yorli City University, and is full of sensible observations which
all students may consider with profit.



How TO Make New York Better.— Und6r title of " How to Make
New York a Better City,"* Mr. Charles F. Wingate, one of the New
York councilors of the Institute of Civics, trenchantly discusses some
of the vexed problems of municipal government. These are some of
liis ol)ser vat ions: ** What is needed is that the public demand a better
state of things. We must get down to business and say what we want,
and then see that we get it. People are wearied of the talk of reform in
general. What they want is reform in particular. Let us abandon de-
famation and shrieking. Let us first reform ourselves. If the public
demand gold watches and Bibles, the politicians will supply the de-
mand. If we endure dirty streets, crowded schools, and tenements, it is
our own fault." As a sanitary engineer, Mr. Wingate gives special at-
tention to "the accursed tenement system" of New York, and asks:
**How can we expect to elevate the masses without improving their
sanitary surroundings?" "The tenement rookery assails the family
which is the basis of the church and of society. It promotes vice, fos-
ters crime, feeds the saloon and the hospital, and is the source of end-
less physical and moral evil. Here, at least, radical action is necessary,
no matter at what cost."



Municipal Leagues.— Municipal league organizations may be ex-
pected to multiply in the near future. In response to an inquiry ad-
dressed to the Institute of Civics, as to methods of organization, we
commend the constitution and by-laws of the Boston Municipal League.
One of the Institute's councilors, Hon. S. B. Capen, is president of the
League, and by addressing him a copy can doubtless be obtained. In
this connection the editors take occasion to say that they will be glad
to respond in these pages to inquiries concerning organized efforts for
the betterment of civic and social conditions, and invite from the pro-
moters of such efibrts information which may be useful, in the form of
notes and comments, as to meetings, addresses, publications, or other
means employed for the realization of their objects.



The Peabody and Slater Funds.— The public has a general
knowledge of the work which is being accomplished through the
agency of the Peabody and Slater funds, but it is to be doubted if it
adequately appreciates the full importance of its noble activities. " To
teach the gospel of work"; **to dignify labor"; "to prepare wise
teachers and leaders for the negro race " ; " to fit the negroes for the
proper discharge of personal, social, political, and moral duties " ; *' to
make them intelligent, upright, and industrious men, and good citi-

* " ChrlBtlan City" publications, 150 Flftli Ave., New York. 3c a copy.



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THE OUTLOOK, 93

zetis '' ; these are various statements of the objects which these funds are
promoting.

The magnitude of the field of endeavor is suggested by tlie fact that
it includes ** seven millions of negroes scattered over 818,000 square
miles — as large a territory as Austria-Hungary, France, Grermany,
Great Britcdn, Denmark, and Switzerland." All that this grand
agency seeks to accomplish, with a right understanding of the term, is
embracf d within the scope of " Civics '' ; for the end of the work to
which the Peabody and Slater funds contribute, Is the reenforcement of
the inflluences which make for good government, by making good citi-
zens. Reports relating to this work, and which furnish information of
great interest and value, can be secured by addressing the secretary of
the funds, who is also a trustee of the Institute of Civics, Hon. J. L. M.
Curry, LL.D., Washington, D. C.



Political Science Quarterly.— The June number of The Politi-
cal Science Quarterly ^ Ginn & Co., Boston, has, among other exhaus-
tive and scholarly articles, papers by Bowland Hazard (of the Institute
of Civics) and Charles B. Spahr on ** Giffen's Case against Bimetallism,"



Online LibraryNorth Carolina. Dept. of Mines North Carolina. Dept. of Labor and PrintingThe American journal of politics, Volume 5 → online text (page 9 of 64)