use of its enormous credits, which reached around the globe. Similar instances of a previous insolvency were found, though for shorter periods, in regard to several other firms, which led to many disagreeable exposures when least expected.

While this tenth year had, as usual, found the people of the United States unprepared, they had at least been making some effort to escape from the demon of speculation. There had been more of sober, solid industry throughout; consequently, more money had been accumulated, the resources of the land had been steadily developed, and the country was far richer than ever before, so that the inhabitants were better prepared for the reaction. The consequence was that the period of disaster was comparatively short. In 1837 Panic could not well exaggerate the distress. In 1847 Panic did exaggerate it, and the distress was to an extent short-lived.

There was now a new element of prosperity to be added to the nation's resources.

On the 9th of February, 1848, three men were at work at Sutter's Mill, situated on the American Branch of the Sacramento River, in El Dorado County, California. They were repairing the raceway, which had been damaged by the recent freshets. The overseer of the work was a man by the name of Marshall. His little daughter, attracted by the unusual spectacle of a dry channel where the water usually rushed with violence, ventured to inspect it. Presently she picked up a yellow pebble, and running to her father exclaimed, "See what a pretty little stone I've found." It was a gold nugget. The news flew like wildfire, and by the month of August of the same year more than 4,000 persons were at work in California after gold, and with most promising results. We all know what followed. The speedy settlement of the State and large additions to the stock of gold in the country.

This unexpected discovery and rapid influx of gold was the first great motor to revive the energies of the people and set affairs in motion again. So that the period between 1847 and 1857 proved to be one of most extraordinary activity in every department of industry and in every conceivable kind of speculation. This decade was the era of railroad construction; of gold-hunting, not in California alone, but in Central America and in Australia. It was the happy period for coal companies, for copper companies, for timber companies and land companies, to say nothing of a great variety of smaller schemes and enterprises "too numerous to mention." In short, the entire community was agitated. If you went into the interior you could not encounter an individual who was not the (then) happy proprietor of shares or bonds of some one of these promising corporations. All over Europe, in London, Paris, Frankfort, Amsterdam, and every other important town, you found "American securities in continually increasing quanities. You encountered Americans at every point loaded with schemes, noisy, selfassured and entirely complacent. Railroads were built with bonds negotiated by English, Dutch and German bankers, while in France, American mining shares-gold, | .silver, copper, etc.-found a ready market. It was the blissful time for the stock-brokers; they were all rich; everybody was rich, or going to become so-which was to them much the same thing-and so everybody was happy. But, alas! when the sons of men were feasting in each others houses, Crisis came also, and with Crisis, Panic. It was midsummer-August-when the swift, sharp, disastrous failure of a large and prominent Life and Trust Company suddenly closed its doors. What a commotion ensued! Bankers and brokers, merchants, solid men,

speculative men, and capitalists, were telegraphed for at Newport, Saratoga, Sharon, Cape May and other points, to come home and save their property. They did come, only to find there was very little worth saving. Failure succeeded failure, and crash followed crash. The banks could no longer respond in gold to the demands upon them, and specie payments, by a sort of common consent, were suspended. Bank-stock tumbled about thirty per cent. The panic was alarming; it exaggerated the already wretched condition of things a hundredfold, and added immensely to the distress. England and the Continent were seriously involved in this sudden and unexpected overthrow.

It was on this occasion that George Peabody, the great American merchant and banker in London, was forced to seek the aid of the Bank of England in order to sustain himself. He had made extraordinary advances to a wellknown banking-house in New York, with whom his relations were very intimate. When the storm burst the leading partner of that house filled his trunk with railroad bonds and shares, and started for London. He went straight to Mr. Peabody, but he had little to offer that in the crisis was available.

Mr. Peabody's application to the bank for aid was always a sore subject with him. For many years I had been on terms of personal friendship with him, and I happened to be in Europe the entire year of 1858. I saw him frequently, and had from his own lips an account of his application to the bank. In the interview he told me he stated to the governor of the bank, who was a personal friend, that he might be in a position to require a pretty large sum of money in the course of a few weeks, and he desired to know then if he could, in such a contingency, be accommodated. "Mr. Peabody," said the governor, pleasantly, "that is not business. What sum do you want now, and for how long a time ?" Mr. Peabody named the amount, and was careful to make it sufficiently large and to put the time sufficiently far off. The transaction was at once concluded, and the amount placed to Mr. Peabody's credit. Mr. Peabody did not use threefourths of this sum, as I now recollect, and he paid into the bank the whole loan some time before it became due. The rate of interest at the bank had risen to ten per cent., and the governor, in the interest of the bank, shrewdly took advantage of the fact to make the loan on those terms. I may mention, as an instance of Mr. Mr. Peabody's honesty of nature, his reply to me when I said to him, "It was very kind in you to sustain that house (naming the New York house) and carry them through." "Oh," he answered, quickly, "had I not sustained them they would have dragged me down."

At this time a great many foreign houses were carried down, by being overloaded with securities of every possible description, a large portion of which had become, at least for the present (and maybe for all time) utterly valueless. Notwithstanding affairs appeared to be involved in a universal ruin (they were certainly involved in a universal catastrophe), when the panic began to subside and the wreckage was cleared away, much remained that was good and substantial. To be sure, there were mining companies whose shares would remain utterly worthless; but gold, nevertheless, was abundant, and was being produced in large quantities. This gave substantial proof of what could be counted on as certain. The railroads, which were at first unremunerative, began to show large increase of earnings as the traffic of the new sections through which they passed increased. Coal and iron had become, as it were, necessities of life, and were in constant demand, notwithstanding many dis

reputable companies had gone by the board. The result was that a large number of our railroads gradually redeemed the promise of great success first claimed for them. Other roads were sold under mortgage and reconstructed, and set once more on their feet with fresh capital. Promise, which had now displaced Panic, smiled upon the situation!

The year 1859 came in with hope once more in the ascendant. But mingled with her charming forecast of events were certain dark mutterings, which, at the dawn of 1860, were transformed into dark threatenings, out of the political horizon. These greatly impeded the upward movement in affairs.

This was the year of all years the most momentous in the history of the United States. Abraham Lincoln was elected President in November. In December, South Carolina went out of the Union, and the Spring of 1861 found a rebellion or whatever other name best suits the sensibilities of the reader-organized in the Southern States. For one year the country sustained the shock and the money pressure, with no depreciation of its bank issues. It was a year of gloom, of misery, of wretchedness. Then came the enormous issue of paper money, with its rapid depreciation in value, fluctuating suddenly and largely, as news of victory or defeat were brought. With this there now came an era of prosperity to the land. I am serious when I use the term prosperity. All the industries, all the labor resources, of the country were employed. The Government wanted men, arms, accoutrements, provisions of every kind; clothing in every shape; steamships, large and small; live stock-cattle; horses, mules-everything, for which the highest prices were paid. Issue after issue of Government bonds were made. The handling of these bonds enriched the famous banker and his subordinates who were intrusted with their sale. The country responded nobly: United States bonds were offered largely abroad. The Dutch were not afraid of them, the Germans were not afraid of them. Both countries invested largely in them. As for the English, they preferred "Confederate bonds"! We shall see by-and-by how severely they fared by the investment.

The war, notwithstanding the fearful loss of life, the enormous expenditure of treasure, and the unhappy distraction which an unnatural state of things produces-I say the war was to the people of the United States (I mean all the States) a source and cause of benefits innumerable. We got rid of slavery, and at the same time rid of the dangerous altercations which always threatened to disrupt the country. We vindicated the strength of republican institutions before the whole world, to the infinite mortification of England and the discomfiture of the Emperor of the French. The tremendous exhibition of power, North and South (as much South as North), displayed in battle array, ending in a peaceful and contented reunion of forces, put the United States of America in the first rank of first-class powers among the nations of the earth.

But there was another side to the picture—a side not pleasant to contemplate. There were certain hideous creations of the war growing out of the suddenly amassed wealth of the army contractor, the purveyor of army stores and equipments; of the dealer, in short, in everything required by the exigencies of war. I repeat, the sudden and overgrown wealth of these persons, often uneducated, coarse and vulgar in their notions and habits, brought into wretched prominence a new set in society. These people were blazing with jewels and vulgar adornment. They bought, at foreclosure sales, the beautiful residences on the avenues which the old

and respectable families were forced to quit, because oppressed by the adverse condition of things; for they did not know how to get money, or make money, according to the new dispensation. This was termed the reign of Shoddy, and a most disreputable reign it was. It was not alone that a certain class had become suddenly enriched. It was the evil example which such as these presented to the young, who had to secure a living by unremitting industry. Their actions and conduct plainly said, "Don't work; don't be industrious. doesn't pay. Look at us!" These were some of the evils to be placed to the debit side when taking account of the results of the war.

It

About this time, there came to the front another class, whom the discoveries in the "oil regions " had suddenly enriched beyond any ordinary computation. This class, while fewer in number than the inhabitants of the domain of "Shoddy," greatly exceeded them in wealth and vulgar expenditure. Anecdotes are still rife of the disgusting exhibitions made by some of these individuals.

The necessities of the war gave a tremendous impetus to the building of railroads, the chief of which was the marvelous work which connected the Great East with the Great West, the railroad to the Pacific. True, in Congress, the construction of this road was attended with all sorts of political jobbery, terminating in the open disgrace of many members; but the road itself was a substantial fact, and of inconceivable benefit to the country.

In the midst of all these extraordinary demonstrations, these marvelous accumulations in the hands of individuals, this tremendous inflation, the tenth year again made its appearance, and demanded a reckoning. At least such was the judgment of old-fashioned, cautious people. But no reckoning was permitted. "The time has gone by for panics. The country is too rich to be frightened by bugaboos," was the language of the sanguine. Many judicious people, however, declared it was time to return to specie payments; they admitted that, so long as paper money was easy of manufacture, so long it would be possible to put off the evil day. But was it best to put it off? The answer of the country was "Yes." And the evil day was put off six years, namely, from 1867 to 1873. There was an ample explanation, and, in a sense, a good reason for this, in the condition of things after the close of the war, which made it of the first necessity that, with the still low credit of the Government, no money crisis should come upon us. So the Government went on manufacturing bonds at a large rate of interest, and resumption of specie payments was not attempted.

Let us stop here, and take a glance across the water at our English friends. In England, as everybody knows, the sympathy of the wealthy classes was entirely with the South. They thought that their mercantile and commercial interests would be greatly served by the dismemberment of the States. This influenced the com. mercial classes. The aristocracy, with an instinctive dislike of republican institutions, expressed, without reserve, their satisfaction in seeing, as they supposed, the "Great Republic" come to an ignominious end. It is true that a proportion of the middle classes, and nearly all of the lower classes-the artisans, mechanics, and day-laborers of England sympathized with the North, and bore without a murmur the diminished cotton supply, which compelled them often to work on halftime. But the power, the wealth, and the influence of England were exerted against the North in the controversy. The result was that that country became a gilded Mecca for our brethren of the Southern States, and

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