tickets. The first train of twelve cars pulled across the line at noon, crowded as trains never were before; even the platforms and roofs were black with human beings. Following this train at intervals of only two or three minutes went another and another until the last, composed of flat and coal cars, all crowded, had pulled across the line, followed by at least 3,000 disappointed, panting men who were determined not to be deprived of their rights. The run to Perry was made in threequarters of an hour. Before the train stopt men began climbing out of the windows and tumbling from the platforms.

In their haste to secure claims ahead of the trains were at least 1,000 horsemen, who had come the ten miles from the line in unprecedentedly short time and who claimed all the lots immediately about the land office and the public well. They were rubbing down their weary horses when the trains were unloading. When the last of the trains pulled in the scramble for land about the town continued with increased vigor. The quarter-sections about the town had all been taken, but in every direction lines were being run and additional towns laid out, to be called North Perry, South Perry, East Perry, and West Perry. By two o'clock fully 20,000 men and women, of all nationalities and colors, were on the site of what all hope will be a great city. They were without food and without water. The scenes at Enid were a repetition of those at Perry.

THE PANIC OF 1893

BY ALEXANDER D. NOYES1

The Treasury was confronted for the first time in its history with a heavy drain on its gold reserve to redeem outstanding notes. During nine months Secretary Foster was engaged in a continuous struggle to save the redemption fund. The strain relaxed temporarily in the autumn of 1892, when interior trade was again very large. Practically no gold was imported, but, on the other hand, exports ceased almost entirely. Moreover, upward of $25,000,000 legal tenders were drawn from the New York banks to the West and South, and the Treasury obtained some gold from these institutions in exchange for notes delivered at interior points. But when the eastward flow of currency began again, at the end of the harvest season, gold exports were resumed and with them the presentation of legal tenders for redemption. In December, 1892, and January, 1893, upward of $25,000,000 gold was withdrawn by note-holders from the Treasury to provide for export needs.

By the close of January the Treasury's gold reserve had fallen to a figure barely eight millions over the legal minimum. With February's early withdrawals even larger, Secretary Foster so far By

1 From Noyes's "Forty Years of American Finance." permission of the publishers, G. P. Putnam's Sons. Copyright, 1898-1909.

2 Charles Foster, of Ohio, Secretary of the Treasury in Harrison's Administration.

lost hope of warding off the crisis that he gave orders to prepare the engraved plates for a bondissue under the Resumption Act. As a last resort, however, he bethought himself of Secretary Manning's gold-borrowing operations of 1885. In February Mr. Foster came in person to New York to urge the banks to give up gold voluntarily in exchange for the Treasury's legal-tender surplus.

Such a situation could not continue long. The very sight of this desperate struggle going on to maintain the public credit was sufficient to alarm both home and foreign interests, and this alarm was now reflected everywhere. The feverish money market, the disordered and uneasy market for securities, and the renewed advance in foreign exchange, combined to bring matters to a head. On April 15, Secretary Carlisle gave notice that issue of Treasury gold certificates should be suspended. This action was taken merely in conformity with the Law of 1882, already cited. It was, however, public announcement that, for the first time since resumption of specie payments, the reserve against the legal tenders had fallen below the statutory minimum.

3

The news provoked immediate and uneasy inquiry as to what the Treasury's next move would be. No definite advices came from Washington, but in the following week a very unexpected and financially alarming rumor ran through the markets. Out of the $25,000,000 legal tenders redeemed in gold during March and April, 1893, nearly $11,000,000 had been Treasury notes of 1890. Under one clause of the Law of 1890 the Secretary was empowered to "redeem such notes

John G. Carlisle, of Cleveland's second Cabinet.

in gold or silver coin at his discretion." The burden of the rumor of April 17th was that the Treasury, now that its gold reserve had actually fallen below the legal limit, would refuse further redemption of these notes in gold, and would tender only silver coin. During the two or three days in which this rumor circulated, general misgiving and uneasiness prevailed, the security markets fell into great disorder, foreign exchange again rose rapidly, and the money market ran up to the panicky rate of fifteen per cent.

The public mind was on the verge of panic. During a year or more, it had been continuously disturbed by the undermining of the Treasury, a process visible to all observers. The financial situation in itself was vulnerable. In all probability, the crash of 1893 would have come twelve months before, had it not been for the accident of 1891's great harvest, in the face of European famine. . .

The panie of 1893, in its outbreak and in its culmination, followed the several successive steps familiar to all such episodes. One or two powerful corporations, which had been leading in the general plunge into debt, gave the first signals of distress. On February 20th, the Philadelphia and Reading Railway Company, with a capital of forty millions and a debt of more than $125,000,-` 000, went into bankruptcy; on the 5th of May, the National Cordage Company, with twenty millions capital and ten millions liabilities, followed suit. The management of both these enterprises had been marked by the rashest sort of speculation; both had been favorites on the speculative markets. The Cordage Company in particular had kept in the race for debt up to the moment of its ruin. In the

very month of the company's insolvency, its directors declared a heavy cash dividend; paid, as may be supposed, out of capital. As it turned out, the failure of this notorious undertaking was the blow that undermined the structure of speculative credit. In January, National Cordage stock had advanced twelve per cent. on the New York market, selling at 147. Sixteen weeks later, it fell below ten dollars per share, and with it, during the opening week of May, the whole stock market collapsed. The bubble of inflated credit having been thus punctured, a general movement of liquidation started. This movement immediately developed very serious symptoms. Of these symptoms the most alarming was the rapid withdrawal of cash reserves from the city banks.

Panic is in its nature unreasoning; therefore, altho the financial fright of 1893 arose from fear of depreciation of the legal tenders, the first act of frightened bank depositors was to withdraw these very legal tenders from their banks. But the real motive lay back of any question between the various forms of currency. Experience had taught depositors that in a general collapse of credit the banks would probably be the first marks of disaster. Many of such depositors had lost their savings through bank failures in the panics of 1873 and 1884. Instinct led them, therefore, when the same financial weather-signs were visible in 1893, to get their money out of the banks and into their own possession with the least possible delay, and as a rule the legal tenders were the only form of money which they were in the habit of using. But when the depositors of interior banks demanded cash, and such banks had in