Depression, Bonds, and Tariffs
"THERE has never been a time in our history," said Benjamin Harrison in his last message to Congress, "when work was so abundant, or when wages were as high, whether measured by the currency in which they are paid, or by their power to supply the necessaries and comforts of life."1 Within months the worst financial panic in years broke over the country. Ten days before Harrison left office the Philadelphia and Reading Railroad, with no warning, suddenly went bankrupt. The volume of sales on the day of its collapse was the greatest in the history of the New York Stock Exchange. The air was filled with anxiety. The unfortunate Cleveland was installed in the White House. Then on May 5 the National Cordage Company failed in spectacular fashion, shortly after paying its regular dividend. The market collapsed abruptly. Banks called in their loans; the stream of credit dried to a trickle. Businesses failed daily. The Erie went down in July, the Northern Pacific in August, the Union Pacific in October, the Atchison in December.
Before the year was out, 500 banks and nearly 16,000 businesses had declared themselves bankrupt.
The month of August [wrote the Commercial and Financial Chronicle] will long remain memorable . . . in our industrial history. Never before has there been such a sudden and striking cessation of industrial activity. Nor was any section of the country exempt from the paralysis. Mills, factories, furnaces, mines nearly everywhere shut down in large numbers, and commerce and enterprise were arrested in an extraordinary degree and hundreds of thousands of men thrown out of employment.