The United States and the Problem of Recovery after 1893

The response of government to the problem of recovery after 1893 is of pivotal significance. During the preceding major depression, the panic of 1873, the idea that government should play an active role is much more difficult to discern. Secretary of the Treasury W. A. Richardson and President Ulysses S. Grant traveled to New York within a week of the outbreak of that earlier panic and agreed to purchase $13 million of government bonds in an inadequate attempt to help relieve the currency shortage. Later Richardson released about $26 million of retired greenbacks for circulation for the same purpose. These efforts represented the outer limits of executive action. ¹

Grant and his successor, Rutherford B. Hayes, supplied virtually no leadership. In the absence of presidential leadership some discussions concerning recovery took place inside and outside legislative halls but without consensus for action. During 1878 and 1879 successive special committees in the House of Representatives held hearings to determine what government might do to alleviate depression. They listened to opinions ranging from the laissez-faire views of William Graham Sumner to the advocates of the eight-hour day, public works, laws supporting unionization and strikes, the issuance of more paper money, and a host of others. These calls for government action received little publicity. They were often far ahead of their time. Even at the level of local government the advocates of public works met with little success. At the national level the inflationary Independent (Greenback) party peaked briefly at about 1 million votes in the off-year elections of 1878 as the result of frequent alliances between fusion Democrats and Greenbackers. Free silver was also attracting the attention of Greenbackers and their sympathizers. But by 1878 the depression was waning. New York's Governor Samuel J. Tilden, the Democratic presidential candidate in 1876, had expressed earlier that year the typical feeling of the time when he called for "government institutions, simple,

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