236 



CONGRESS. (SPECIAL SESSION THE SHERMAN ACT.) 



wise men had an inkling of it ; but there was 

 felt to be a constant drain of currency which 

 was taking from us not only the money which 

 we previously had in circulation, but the large 

 sum which I have mentioned from the Treasury 

 of the United States. When the course of 

 events reached its end it was discovered that the 

 great money center of the world London, the 

 capital of England had been severely drained 

 by a most tremendous set of enterprises in a dis- 

 tant nation of South America. 



" The effect of that tremendous call upon the 

 money center of Europe, which resulted in the 

 shaking down of the house which was the syno- 

 nym, especially in the United States of America, 

 of credit, of enterprise, and of solidity the 

 house of Baring Brothers drew upon the re- 

 sources of the United States with a vigor that 

 no one would have dared to prophesy a year be- 

 fore. 



" But the United States at that time was 

 sound in every way, and had not yielded to any 

 disposition to inflation ; consequently the storm 

 was weathered, and we continued upon our ca- 

 reer of prosperity and of labor. The country 

 was prosperous because everybody was at work, 

 because capital was thoroughly employed, and 

 all the goods that were produced were consumed 

 and were necessary for the wants of the people. 



" In the year 1890, from a variety of circum- 

 stances which it is not necessary now to discuss 

 for the country cares very little to-day whether 

 anybody was or was not to blame for the pas- 

 sage of the Sherman act conspired to make the 

 passage of that act an absolute necessity. The 

 passage of that act pledged the United States to 

 purchase every month, and issue its value in 

 currency, 4,500,000 ounces of silver. 



"At the time when that act was passed every 

 patriot sincerely hoped that the expectation of 

 the friends of silver, that that purchase would 

 result in solving the problem of bimetallism for 

 this country and placing silver on a par with 

 gold, would be realized. That the friends of 

 silver entertained that view 1 can "not doubt, be- 

 cause it was expressed to me in terms of the ut- 

 most confidence. At the time, the passage of 

 the act caused very little fear on the part even 

 of the wisest ; but a series of events, which are 

 so fresh in the memory of every man who hears 

 me that I need not recapitulate them, caused a 

 drain of gold from the United States to Eng- 

 land. 



" That drain of gold sounded the alarm to the 

 American people that the period of prosperity 

 through which they had passed, and which was 

 then in existence ; which was shown by the em- 

 ployment of capital and the employment of 

 labor, had reached a period of suspicion a 

 period always reached in such forward move- 

 ments of the human race, and always to be an- 

 ticipated, but never in reality anticipated. At 

 no time when any nation in the world has been 

 at one of these periods of prosperity have men 

 in general suspected that the period of prosper- 

 ity was about to close. 



" Every man is in the whirl of ambitious ef- 

 fort, carried away by it, swept in the direction 

 of it, and hence does not know what is about to 

 happen. The stroke of the clock which shows 

 that the time of settlement has arrived is always 



a surprise ; and, from the nature of things, and 

 of human beings, always will be a surprise. 



" Last May it became apparent that we had 

 reached a period when a wise and judicious man 

 would be careful to curtail the amount of his 

 obligations. Some wige men had done so be- 

 forehand ; other wise men had waited until that 

 period. The banks then commenced to examine 

 their collaterals, to call in their loans, and to 

 put themselves in a position of safety, so far as 

 possible. The first element of dissatisfaction 

 and doubt which pressed itself upon the people 

 was the fact that there was a continuous and 

 unaccountable drain of gold. 



" That drain of gold amounted, in round num- 

 bers, to a very great sum, so nearly equalling the 

 amount of issue under the Sherman law that it 

 seemed almost conclusive that the displacement 

 of currency which was happening was on ac- 

 count of the issue under the Sherman law, be- 

 cause it seemed to be driving out the same pro- 

 portion of gold which was the equivalent of its 

 own amount. Whether that reasoning was 

 sound or safe or correct is in no wise a matter 

 of discussion. The fact that the feeling existed 

 was sufficient for all the purposes of practical life. 



"Men felt that it was absolutely necessary, 

 even if that question was a question of doubt, so 

 long as it was a question at all, that they should 

 curtail their enterprises in the future, and that 

 they should put themselves in order for a storm. 

 Then followed what seems to be one of the 

 characteristics of such a period universal dis- 

 trust. The first distrust arose from the doubt 

 whether the United States was not rapidly ap- 

 proaching a system which would inevitably re- 

 sult in a silver standard and a lowering of the 

 value of the dollar as compared with the gold 

 standard, upon which the United States was 

 then undertaking to base itself. 



" This has nothing whatever to do with the 

 question of the righteousness of the double 

 standard or of the single standard. The United 

 States at that moment was making gold its 

 standard, and any question as to whether it was 

 to fall or not to a silver standard was a question 

 which instantly aroused the desire of the people 

 to hoard, first gold, then, as the distrust spread, 

 all kinds of money, for we not only began to 

 doubt the Government of the United States and 

 its policy, but also to doubt the solvency not 

 the present solvency, but the future solvency 

 of all the institutions of the country. 



" When suspicion and doubt of that kind once 

 enter the minds of 65,000,000 people there is 

 no knowing where it will end. That it took 

 serious possession of them is shown by the sim- 

 ple fact that out of the United States banking 

 houses alone $190,000,000 deposits were drawn 

 by depositors from all parts of the country. 

 How much was drawn out of State banks and 

 out of trust companies, how much has been 

 drawn out of savings banks, no one will ever 

 probably know ; but so much has been drawn, 

 so much has been hoarded, so much has been 

 kept out of circulation, that we are suffering to- 

 day all the calamities of a restricted circulation 

 in the midst of an abundant supply of money. 



" This, then, at the present moment is the 

 situation in which we find ourselves. I have, in 

 thus narrating the outward circumstances 



