this country during the first six months of 1890 the mortgages of nearly two dozen railroad companies were foreclosed, and the Barings' collapse in England later in the year caused widespread consternation. Confidence here, as elsewhere, was grievously shaken, and business embarrassments rapidly increased.
There are two superstitions being cultivated in this country which the period of depression beginning in 1890 was well apt to put in their true light. One is that when business languishes we have only to enact a high tariff and everything will soon be in prosperous and happy motion again. The downward movement beginning in 1890 occurred while the McKinley tariff was in full operation. While it is not pretended that this downward movement was caused by that high tariff, it is very evident that the tariff did not prevent or stop it. The other superstition is that the sure remedy for hard times consists in an increase of the volume of current money. This remedy was applied in 1890 through the so-called Sherman act, by which the Government's currency was rapidly increased. But the business decline did not stop. On the contrary, it was seriously aggravated by adding to the other uncertainties of the day the portentous question whether, if the issues of Government paper money against silver purchases were continued, it would be possible to maintain its parity with gold.
This was the situation when Mr. Cleveland became President. To make his Administration responsible for that situation is a ludicrous absurdity. At the close of his first term, in 1889, he had turned over to his successor, Mr. Harrison, a cash balance in the Treasury of more than $281,000,000, of which more than $196,000,000 was gold. In 1891, after the second year of President Harrison's term, the cash balance had dropped to less than $176,500,000, and the Treasury gold to less than $118,000,000.
