CSISIS. 585 CRISIS. bad harvest or other calamities might cause local distress, or speculation such as was exhibited in the days of the South Sea Hubble and the Mis- sissippi Scheme mij^ht cause a panic, but such occurrences did not show the pertinacity and wide-reacliing etVects w'hieli characterize the modern industrial disturbances. That such crises are inevitable consequences of modern methods of doing business and inseparable from the economic activities of our times, seems to be well estab- lished by their frequent recurrence and by their greater severity in the most advanced nations. Crises more or less pronounced occurred in England in the years 1S1.5, 1825-20, 183fl-37, 1847, 1857, 18GG, 1873. and 1890, while in the United States like disturbances were felt in 1814, 1818- 19, 1837, 1857, 1873, 1884, and 1893. The perio- dicit}' of these occurrences is marked, and certain writers have gone so far as to establish a normal interval of ten or twelve years between crises. The facts as far as we know them do not warrant us in fixing any absolute rule, though the history of these crises reveals many common features. It will further be observed that the dates given for Great Britain and our own country coincide in several instances, and if space permitted lis to draw upon the history of Belgium, Holland, France, and Germany, further coincidences would be obvious. Certain crises, notably that of 1873, were felt quite generall_y. The actual crash did not occur in the same month, or even in the same year, in all the countries involved, but it is a frequent occurrence that local circumstances may hasten or postpone an event for which the general conditions are preparing. The concrete manifestations of a crisis can best be studied in an historical instance, and none is better adapted for this purpose than the crisis of 1873 in the United States. With the close of the Civil War an extraordinary activity in all lines of enterprise was manifested. The public lands had been thrown open to settlement, and large tracts had been granted to the Pacific railroads. This, together with the return of the army to the pursuits of peace, and an enormous increase in immigration, was the condition for an era of speculative development in the Western States. The impulse which had been given to manufac- tures, not only by the highly protective duties which marked the war tariffs, but also by the depreciation of the currency, which acted as a check upon foreign competition, caused a similar activity in the manufacturing States of the East. Business prospered; prices and profits were high. The census of 1870 showed in every branch of industry a great advance over that of 1800, and the greater part of this advance was in the latter half of the decade. Nowhere was this confidence in the future shown more than in railroad-build- ing and in the iron industry. In 1807 there were 2249 miles of railway constructed: in 1809. 4015; in 1871. 7379. A like expansion of railways had marked the approach of the panic of 1857. In like manner, the outlay for constructing railways rose from .$271,310,000 in 1804-08 to .f841,206.- 000 in 1809-73. The consumption of pig-irim, which had been 1.410,000 tons in 1808. roseto 2.810.000 tons in 1873. High prices ruled. The maximum prices in the period following ISOO were, it is true, attained in 1800, but if they fell in the years 1807 and ISOS it was only to rise again to a point nearly equal to that of 1800 in 1871 and 1872. The activity in the commercial centres is relleeted in the rise of clearings in the Xew York Clearing House from twenty-eight billions of dollars in 1808 to thirty-five billions in 1873. The foreign trade of the I'nited States showed a like activity, the aggr<>gale of exports and imports rising from .'!;009,000,000 in the fiscal year 1808 to $1,104.()0(),0()0 in 1873. But even more significant of the expansion of activity in the L'nitcd States was the fac^t of increased im- |iortations from abroad. In 1870 the imports excec'ded the exports by $43,000,000. but in 1872 this excess had become" $182,000,000, and in 1873 $119,000,000. The crisis of 1873 is usually dated from the failure of .lay Cooke & Co., September 18. The Stock Exchange of New York was closed on the 20th and was not reopened until the end of the month, (^learing House loan certificates were issued in large quantities. There had been certain premonitory s-mptoms of the approaching col- lai)se. Itailrriad-iniilding re:iched its highest |)oint in 1S71, pig-iron its highest price in Sep- tember. 1872. The crisis lasted a few months only, the last Clearing House loan certificates being redeemed .January 14, 1874. But there followed a long period of depression, which reached its lowest ]ioint three years later. The activities which had marked the previous era were not entirely stopped, enterprises begun had to be finished to save what was already invested, the daily needs of the people must be met, but all enterprise was timid and cautious. The buoyancy of the previous years was gone, ami new enter- prises were not undertaken. Railroad construc- tion fell ofl', and in 1875 reached a minimum of 1711 miles, while in the period 1874-78 the outlay for construction was only $357,000,000. Prices fell until 1879. to rise therenfter until 1882. The consumption of pic-iron declined until it reached 1.900,000 tons in 'l 870. Clearinas in New York Citv fell off from $35,000,000,000 in 1873 to .$23,- OOO'.OOO.OOO in 1874. and reached their lowest point since 1803 at $22,000,000,000 in 1870. In foreign trade the excess of imports disappeared in 187-t. As the year 1873 marks the outbreak of the crisis, so the year 1870 serves to mark the lowest point in the subsequent depression. The whole story of the crisis, its antecedents and results, is succinctly told in the statistics of business fail- ures, as reported by R. G. Dun & Co., as follows ; YEAR Number Liabilities 1869 2.799 3,546 2,915 4,069 5,183 5,830 7,740 9.094 4.735 6.738 9.184 10.968 10,637 1870 88.242.(1(111 1871 1872 121 Ofii; oiiii 1873 1874 1.').') '^;t'i 0(10 1875 1876 1881 6.T 7.'t"^ 000 1882 101.547.5W 172.874.172 226 343 427 1883 1884 1885 124,220,321 Everv crisis, panic, and depression is marked by analogous characteristics. Whatever data are appropriate to show expanding conditions and an inflalcil condition of business at any particular time and place will exhibit a similar showing. In the United States, particularly since 1840, railroad construction has been a favorite index
