Lippincott's Magazine of Popular Literature and Science, Volume 12, No. 33, December, 1873
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Having reviewed the disastrous course of this crisis up to the date of writing, I will briefly consider its causes. It may be traced remotely, in some degree, to the distrust of American railway securities in Europe which attended the reckless administration of the Erie Railway under Fisk and Gould, and which lingered after their overthrow, indisposing capitalists, as well as small investors, to have anything to do with American railways. It is true that a market still remained there for these securities, but it was a much more limited one than it probably would have been but for the Erie scandal, and within the last year or two it was entirely glutted. Financial agents found it impossible to float a new American railway loan even where the security offered was a first mortgage bond. Thus, Jay Cooke & Co. were greatly disappointed with respect to the sale of their Northern Pacific bonds abroad, and nearly as much so in the demand for them at home; but they were pledged to the undertaking, their solvency became dependent on its success, and they were sanguine that confidence in the great enterprise would grow with every mile of new road constructed.
Mr. Jay Cooke undoubtedly looked forward to a subsidy from Congress for carrying the mails over the new line, and in all likelihood would have obtained it but for the Credit Mobilier exposé, which caused both Congress and the people to "shut down," not only on everything having the appearance of a "job," but on much besides. The ill odor into which that investigation brought the Union Pacific Railway and all who had been connected with its construction was a heavy blow at new enterprises of a similar character where government land-grants were involved; and the vexatious suit which Congress authorized against the Union Pacific Company and all concerned was another blow at confidence in the same direction.
The formation and rapid spread of the Grangers' association in the West, and its avowed design to make war upon the railway interest with a view of securing cheap transportation to the seaboard, was another disturbing element, undermining confidence in railway property. But the greatest and the immediate cause of the crisis was the over-building of railways; and hard indeed are likely to be the fortunes of the unfinished enterprises of this character arrested by its blighting influence; for capital for years to come will be very slow in finding its way into the bonds of roads to be built by the proceeds of their sale. It was a false and dangerous system—and the event has proved its unsoundness—for new companies to rely from the outset upon this source for the means of construction. It was a hand-to-mouth policy, resting upon so precarious a foundation that, in the light of experience, we can only wonder that eminent and otherwise conservative bankers should have adopted it to the extent they did, thereby not only jeopardizing their own position, but imperiling the whole financial community. About six thousand miles of new railways were constructed in the United States in 1872, of which it may be estimated that at least seven-eighths were in advance of the national requirements. Not a few of those now unfinished or just completed will, like the New York and Oswego Midland, be forced into bankruptcy, and it will be long before all the ruins left by the crisis will be cleared away. A shock has been given to the entire railway interest of the country, the full effect of which has not yet been felt; and those who expect the prices of railway securities to rule as high, for a considerable period to come, as they did before the panic, are likely to be disappointed. After all panics we have had more or less wearisome stagnation and depression, growing out of impoverishment and distrust of new ventures; and this last one will hardly prove an exception to the rule. The mercantile interest, too, will probably continue for some time to suffer in consequence of the monetary derangements resulting from it and the want of adequate banking—or rather currency—facilities for bringing forward cotton and general produce from the West and South for shipment; and here and there houses that have so far withstood the strain will break down under it. But in a rapidly growing country, with inexhaustible resources, like this, recovery from such disasters is, fortunately, far quicker than among the less progressive nations of Europe.
One eminently satisfactory feature of the panic in securities was, that it did not extend to United States bonds, greenbacks or National bank-notes. Bonds were of course depressed in sympathy with the scarcity of money and the demoralization prevailing in the general stock market, but there was not the slightest loss of confidence in them among holders, nor any pressure to sell, except to relieve urgent necessities among the banks and others having need of currency. The paper money of the country proved itself the most valuable kind of property that any one could possess; whereas under like circumstances, in former times, when banks under the State laws could practically issue as many notes as they chose, much of it would have been left worthless and the remainder depreciated. But our currency system is defective in one essential particular: it is not elastic. It is, so to speak, hide-bound at seven hundred and ten millions of paper, exclusive of fractional currency, three hundred and fifty-six millions of which are legal-tender notes, and three hundred and fifty-four millions National bank-notes. The safety-valve of a country's circulating medium is its elasticity, and the sooner Congress authorizes free National banking on the present basis of ninety per cent. of currency to the par of United States bonds deposited with the Treasury, or devises some other means of affording relief, the better for the interests of the nation. The law requiring the banks in the large cities to keep always on hand a reserve in greenbacks equal to twenty-five per cent. of their deposits and circulation, and those in the country a reserve of fifteen per cent., should also be amended, the percentage being too high by one-half. It is for the interest of every bank to keep a reserve adequate to its own requirements and safety, and the existing restriction instead of being an element of strength is a source of weakness. Then, again, as National bank-notes are guaranteed by a pledge of United States bonds at the before-mentioned rate of ninety per cent. of notes to the par of the former, the banks ought not to be required to redeem their own notes in greenbacks on demand; and each bank should be allowed to count the notes of other banks—but not its own nor specie, except on a specie basis—as a portion of its reserve. To require the banks to redeem their notes with legal tenders, on presentation, when there are only two millions more of the latter than of the former in circulation, is to demand of them what they would find it impossible to do in the remote but nevertheless possible contingency of the bank currency, or any large portion of it, being simultaneously presented for redemption.
As a measure looking to the resumption of specie payments, however, it would be well to abolish the National bank circulation altogether. This could be done by Congress authorizing the Treasury—through an amendment to the Bank act—to replace the National bank-notes with new greenbacks, and cancel an equivalent amount of the bonds pledged for the redemption of the former. After that was accomplished we should have a circulation based directly upon the undoubted credit of the United States, and the government would be saved the twenty millions (more or less) of coin per annum which it now pays to the National banks as interest on three hundred and fifty-four millions of the bonds thus deposited, for it could withdraw these, by purchase with the greenbacks thus issued in substitution for the surrendered National bank currency, as fast as the exchange of the one for the other might be made. This saving of interest alone would strengthen the government for a return to the gold standard, which could be effected without any contraction of the volume of paper money, except to the extent of the coin thrown into circulation: and the resumption of specie payments by the Treasury—greenbacks to be convertible into coin only at the Treasury and sub-treasuries—would be resumption by the entire country, for gold would no longer command a premium. The National banks thus deprived of their own notes would have to bank on greenbacks, just as the State banks—which have no circulation—do at present.
It is obvious that resumption could be accomplished in this way on a very much smaller reserve of coin than would be necessary if each individual bank had also to resume simultaneously with the Treasury, as would be the case under the present mixed currency system, for the whole of the reserve would be concentrated in the hands of the government, instead of being scattered among the banks all over the country. The credit of the government would, of course, be much stronger than that of any individual bank, and the demand for gold in exchange for greenbacks would probably be very small in comparison with the amount of coin belonging to the Treasury, even at the beginning of resumption, when the element of novelty in it, not distrust, might induce conversion. The banks would then have no more occasion for gold than they have now, greenbacks still retaining their legal-tender character unaltered.
Had the country been on a specie basis when this crisis came upon us, the twenty millions of coin held by the New York banks at that time would have been available for their relief, and have formed a part of the circulation; whereas for all practical purposes it was useless to them, and consequently to the people, as money; and in like manner all the heavy importations of gold which have since taken place, and been converted into American coin, have failed to enter into the circulation, as they would have done on the specie standard. The whole of the forty-four millions of Treasury gold-notes, convertible into coin on demand, held by the banks and the public on the 1st of September would in that event have formed a part of the active currency of the nation, instead of lying as dormant as the whole eighty-seven millions of gold—part of which they represented—in the Treasury.
That part of the currency of any country which is in specie is necessarily elastic, because it is the money of the world, embodying the value which it represents, and subject to that ebb and flow, in accordance with the laws of trade, which attends the circulation of gold and silver coin everywhere. Supply follows demand, and a nation with a specie currency inevitably attracts the precious metals by outbidding other nations in the rate of interest it offers for them. Why, therefore, should we shut ourselves out from the advantages of this form of communion with the commercial world by postponing the resumption of specie payments a day longer than we are compelled to?
K. CORNWALLIS.SAINT MARTIN'S TEMPTATION
For forty-and-five long yearsI have followed my Master, Christ,Through frailty and toils and tears,Through passions that still enticed;Through station that came unsought,To dazzle me, snare, betray;Through the baits the Tempter broughtTo lure me out of the way;Through the peril and greed of power(The bribe that he thought most sure);Through the name that hath made me cower,"The holy bishop of Tours!"Now, tired of life's poor show,Aweary of soul and sore,I am stretching my hands to goWhere nothing can tempt me more.Ah, none but my Lord hath seenHow often I've swerved aside—How the word or the look sereneHath hidden the heart of pride.When a beggar once crouched in need,I flung him my priestly stole,And the people did laud the deed,Withholding the while their dole:Then I closed my lips on a curse,Like a scorpion curled within,On such cheap charity. WorseWas even than theirs, my sin!And once when a royal handBrake bread for the Christ's sweet grace,I was proud that a queen should standAnd serve in the henchman's place.But sorest of all besteadWas a night in my narrow cell,As I pondered with low-bowed headA purpose that pleased me well.'Twas fond to the sense and fair,Attuned to the heart and will,And yet on its face it bareThe look of a duty still;And I said, as my doubts took wing,"Where duty and choice accord,It is even a pleasant thing,To the flesh, to serve the Lord."I turned and I saw a sightWondrous and strange to see—A being as marvelous brightAs the visions of angels be:His vesture was wrought of flame,And a crown on his forehead shone,With jewels of nameless name,Like the glory about the Throne."Worship thou me," he said;And I sought, as I sank, to trace,Through his hands above me spread,The lineaments of his face.I pored on each palm to seeThe scar of the stigma, whereThey had fastened him to the Tree,But no print of the nails was there.Then I shuddered, aghast of brow,As I cried, "Accurst! abhorred!Get thee behind me! for thouArt Satan, and not my Lord!"He vanished before the spellOf the Sacred Name I named,And I lay in my darkened cellSmitten, astonied, shamed.Thenceforth, whatever the dressThat a seeming duty wear,I knew 'twas a wile, unlessThe print of the nail was there!MARGARET J. PRESTON.THE LONG FELLOW OF TI
Colman put down his book and looked about the parlors and piazzas of the hotel, and went and spoke to the barkeeper: "Have you seen Mr. Field lately?"
"No: he hasn't been in here since supper."
Colman went out and walked down toward the head of the lake. Passing out of the shadow of the trees, the open shore was before him, and the wharf at some distance, with the tiny steamer, the Wanita, lying by it in the moonlight. There was some one coming along the sandy road, and Colman leaned against a tree and waited for him. The dark side of the boat was toward him, and though it was quite late, a light showed in one of her windows. When the person on the beach came near Colman, he turned and stood watching the light till it went out, and then came on. Colman stepped out, and the comer said, "Halloa, Phil! is that you? You startled me. Going in?"
Philip only nodded, and they walked back to the house together, Field whistling absently. They went up to their room, and Field sat by the window while Colman struck a light.
"Dan," said Philip abruptly, "I want you to come on with me to-morrow."
Field was looking out through the trees toward the wharf and boats at the head of the lake. He turned sharply and answered: "Phil, you're a prig. I'll do nothing of the kind."
"We've been here long enough, Dan," Philip went on, taking no notice of the rudeness except in his manner. "I shall go north in the morning. I wish you would come with me."
"The deuce you do!" Field retorted. "You may do as you please. We came to stay as long as we enjoyed it here, and there's nothing to go for, that I know of."
No more was said. Colman went to bed, and Field sat smoking by the window. After a while he forgot his cigar, and it went out. He heard the wind whispering among the trees that almost brushed his face. Through the branches he got glimpses of the lake placid under the moon, and the black breadths of shadow below the opposite hills. He sat a long while, and the house became still. He seemed alone with the night, and the hush and awe of it touched him and moulded his thought. It was very late when he got up at last. The lamp was still burning, and Field had not taken off his hat. He went over and sat down on the edge of the bed, and looked at his sleeping friend until the latter opened his eyes.
"Phil," said Field, "you're not a prig, but I'm a fool. I'm coming with you in the morning."
"All right, Dan," Philip answered. "I'm glad you are coming. Good-night."
They went on north next day with no definite plan, came to the lower lake and the old fort on the cliff, and, taking a great liking to the place, lingered in the neighborhood from day to day. They happened one evening upon a queer, secluded public-house across the lake, where they fell in with a long, lean, leathery young native, who appeared to be a guide and waterman, and told them stories of the hunting and fishing among the lakes and mountains in a vein of unconscious humor and a low, even, husky voice which the friends found very agreeable. They met him again at a fair and horse-race at Scalp Point, and found their liking for him increased. Finally, they were to go south at noon on Friday, and then put it off till the night boat. After supper they took out the skiff from the rocky landing for a last row. They pulled round under the dark cliffs that rose sheer from the water and were crowned with the wall of the old fort, the cliffs themselves seamed across with strata of white, like mortar-lines of some Titanic masonry. They gave chase to a tug puffing northward half a mile to the right, towing two or three canal-boats through the still water and the stiller night. Then a sail came ghostily out of the shadow astern, and stole on them as they drew away and waited for it. By and by the boat crept up, dropped away a little from the light wind, and passed close to leeward. There was one man in her sitting in the stern, and the whole made hardly a sound. They knew the man at the tiller: it was the long fellow again. He took them in, and they talked as they drifted on. The lights behind the locusts fell far astern.
"Come, come!" said Colman at last: "this won't do. We have a long pull now, and we're to be off at two in the morning."
Field turned and asked the young fellow if he was engaged for a week or two. No, not especially: he had been running parties a good deal off and on, but they were getting pretty thin now, and there was not much call for boats.
"Will you go with me on a gunning and fishing cruise through the lakes?" asked Field; and the long fellow said he'd go with him as soon as any other man, and when should they start? "To-morrow morning," answered Field, "any time you like."
They got into the skiff, threw off the line, and pulled back to the Fort House; that is, Field pulled and Colman lay in the stern and listened to the water gurgling under the boat. They landed and climbed up the rocks.
"So you're going back?" said Colman. "Dan, I wish you'd come home."
Field flushed and turned sharply. "Oh, hang your preaching, Phil!" he snapped out. "You're too infernally flat. Who said anything about going back?"
The steamer was due in three or four hours. They went straight to bed, and it seemed about ten minutes afterward when Colman woke with a start and saw Field striking a light: it was twenty minutes of two. They waited an hour for the boat, walking about or sitting by the fire. Then the landlord came in with a lantern and said the boat was coming, and they went down to the wharf and waited for her. The bell rang, the wheels ploughed in, the friends bade each other good-night, gave a hearty grip of the hand, and then there was one left alone. Field went back to bed. In the morning he made himself a rough outfit of clothes and boots, and started on foot with his guide. He did not know the guide's name, and called him "Long" to begin with, and the guide answered as if that had been his name from his christening, only glancing askance at Field the first time with a twinkle in his eye, and would give no other name after that. "A name was only a handle to a man, any way, and one was as good as another, or better."
It would be hard to define the motive that led Field to answer. "Well, if it's the same to you, Long it is. You can call me Meadow when you don't think of anything better."
Long had an evident admiration for his companion which increased every day. Field was a good shot, as good a fisherman as himself, rowed and walked and sailed with about equal strength and skill, could do wonderful tricks of tossing balls and other feats, could eat anything or go without, sleep anywhere, and be good-humored in any circumstances; and Field found Long a trusty, self-contained, clever fellow, and was much entertained by his dry humor and amusing stories of bear-hunts and deer-hunts and queer adventures. They tramped that region pretty thoroughly, camping out at nights or sleeping at the nearest of the little settlements.
One morning they took a boat at the head of the lake and rowed down toward a pond on the east side among the hills, where Long said the ducks came "so thick you couldn't see through 'em, and where the water was so shallow and the mud so deep that, when the ducks were shot, the Devil couldn't get 'em 'thout he had a dog." After a while a wind came swooping down on the quiet water through a dip in the hills, and nearly blew the skiff's bows out of water. The sleeping lake woke up, pitched and foamed, and beat upon the bows and dashed over the young men till they were nearly as wet as the waves themselves. Field was pulling to Long's stroke, the wind fluttering his hair in his eyes and the water running down his back, but he would not say anything till Long did. Presently Long looked round over his shoulder, and hailed, "I guess we'd best throw up and get a tow: I hear the Wanita coming down."
Presently the little steamer came along and threw them a line. Long caught it and made it fast. They were nearly jerked out of the water or flung into it, and then went boiling along in the steamer's wake. A boat-hand drew in the line, and they climbed out, swaying and floundering through a cloud of spray, and all the passengers crowding back to see. They went forward and up on deck, and the captain spoke to Long from the pilot-house, calling him Trapp. Long talked to him through the window and introduced Field when he came along: "Mr. Meadow, Cap'n Charner. I'm showing him bear-tracks and things around the pond."
"How do you do, captain?" said Field. "Don't know me in the part of Neptune, eh?"
"Oho!" said the captain, glancing aside from the wheel. "It's you, is it? Where's your friend?—Trapp," he continued, "you'd better take Mr. Meadow down and get Hess to dry his coat." They went down to the little cabin, where a trim, plainly dressed, but very pretty girl was busy with some sewing. She started and laughed when she saw Long and how wet he was. Then she saw there was somebody else, and she blushed a little.
"Mr. Meadow, Hess," and "Miss Hessie Charner, Meadow," introduced Long; and he told her what the captain had bidden him.
The girl brought a coat of her father's for Field, and hung his up to dry near the furnace, and the three chatted together till the boat warped in to the wharf at her trip's end.
Long did not know how it was, but it happened constantly after that that they fell in with the Wanita somewhere on her trip. He found that accident pleasant enough at first, but somehow changed his mind before long, and managed that they did not happen upon the boat the next day. That afternoon Field had some business in Bee, and set off in that direction, engaging to meet Long with traps and bear-bait at the Hexagon Hotel the next morning. His business in Bee could not have required much time, for when Long happened down at Leewell that evening, Field was smoking with Captain Charner in the little cabin of the Wanita, the captain's daughter sitting by with some sewing. Long sat with them a while, but he would not smoke, and his conversation could not be called brilliant or amusing. Field, on the other hand, talked his best and was in the highest spirits. Long got up and went away presently, with only a good-night to the captain.
One evening, a little later, two persons were looking out on the lake and the dark hills beyond, and talking in low tones by the rail on the lower deck of the Wanita as she lay at her wharf. A tall man passed down along the shore, and went by without looking round. An hour later Field was walking quickly along the shore-road in the moonlight, crushing the gravel and whistling an air under his breath, when Long came out of the shaded piece ahead and started past without any sign of recognition.
On Thursday of that same week Field left Long at a point on the east side of the lake, to go to Bee; and half an hour after arriving there was out on the Leewell road, on horseback, galloping south, singing a stave of a song as he dashed along. There was a dance that night at the George Hotel, and Field was there, the handsomest and gayest of men; and there was no prettier girl in the rooms than the one he brought and danced so well with, and whom no one else knew. Late at night, looking up from her flushed and happy face in a pause of the dance, his eyes fell on another face, neither flushed nor happy, looking at him from a door across the length of the saloon, and he was doubly spirited and devoted after that. He did not see the face again, but he was half conscious of being watched as the ball came at last to an end, and he saw his charge home to the house of the friend in the town with whom she was to spend the night. He turned away with a set face when the door had closed upon her, and walked back quickly the way he had come, peering into the shadows, but he saw nothing. He got his horse from the stable and rode north along the shore as the gray morning stole over the sky and the ever-sleeping hills and the broad, calm, misty lake. He gave the black mare heel and rein, and brought her white and panting into Bee. He did not put on the rough clothes again, but went as he was to meet Long at the appointed place across the lake. He ordered the boatman who rowed him to wait. Long was waiting for him, lying on a grassy slope. He nodded when Field came up.