5. From the viewpoint of the workingmen what can be said in favor of trade unions? From the viewpoint of the employers what can be said against them?

6. What is meant by a "scab"? If you were a member of a trade union what would be your attitude toward the "scab" and what would be your reasons for assuming that attitude?

7. What are some of the evils of strikes? When is a strike justifiable? 8. If you were an employer of labor, do you believe you would be willing to sacrifice a little money for the sake of the happiness and comfort of your employees? Is it likely that the labor problem will ever be satisfactorily solved as long as both capitalists and laborers ignore moral considerations in their dealings with each other?

9. Sketch the life of Samuel Gompers.

10. Labor Disturbances: Dewey, 288-296; Van Metre, 449-455.

II. Organized Labor (1884-1888): Dewey, 40-56.

12. The Labor Problem (1860-1880): Bogart, 472-483.

13. American Federation of Labor: Faulkner, 593-598; Carlton, 75-82.

14. The Knights of Labor: Carlton, 72-75.

15. Employers' Associations: Carlton, 92-100.

16. The Rise of the Wage Earner: Lingley, 285-307.

XXVIII

CURRENCY REFORMS AND TARIFF CHANGES

The four years which followed Mr. Cleveland's second election were among the most remarkable years of peace the country had ever seen. Disorders of the most severe character alike in business and politics had within that short space their sharp culmination; society itself seemed upheaved by forces which threatened it with lasting injury.Woodrow Wilson.

The Pullman disturbance was simply a violent outcropping of a bad economic situation that existed throughout the whole extent of the nation. For at the time the strike occurred the period of prosperity that began in 1878 had passed and hard times had come again. Since the depression was due mainly to a disordered condition of the currency it will be well at this point to consider the monetary problems that confronted the nation and learn of the measures that were taken to place the currency on a more satisfactory basis. While the country was being troubled by the currency question there was at the same time a great deal of agitation over the tariff question and several important tariff laws were enacted.

HARD TIMES AND FREE SILVER

In tracing the course of our economic progress we have found that "hard times follow flush times as the trough of the sea follows the crest of the wave." We now come to the time when the nation again was in the trough of adversity; when farmers were in a bad plight, when workingmen were discontented, when business was in a depressed condition. This depression is generally referred to as the Panic of 1893 although conditions were beginning to be bad before that date and the distress continued for several years after. It was in 1892 that the condition of the country was commented upon by the People's party-Populists they were generally calledin the following words: "Business prostrated; our homes covered with mortgages; labor impoverished; and the land concentrating in the hands of capitalists. The urban workmen are

Discon1892

tent in

The Con

dition
of the
Farmers

The Demand for the Free Coinage of Silver

denied the right of organization for self-protection; imported pauperized labor beats down their wages; a hireling army, unrecognized by our laws [referring to the Pinkerton men (p. 346)] is established to shoot them down and they are rapidly degenerating into European conditions." The note of discontent sounded in these words was heard within a few months at the Presidential election, when more than a million votes were cast for the Populist candidate and when many thousands of workmen in resentment for what was done at Homestead gave their votes to the Democrats simply to rebuke the Republicans.

The man who was hit first and hardest by the returning depression was the farmer. For several years the price of grain and live-stock had been falling, the decline being due in part to an abnormal expansion of the agriculture area, and in part to the fact that Europe was buying smaller quantities of our agricultural products. Wheat, which in 1891 sold at 85 cents. a bushel, was selling in 1893 at 55 cents, while corn dropped from 40 cents to 35 cents. With the Southern farmer it was the same cotton, which in the eighties had averaged II cents a pound, had fallen by 1892 to less than 8 cents. In truth, by 1893 it cost more to raise wheat and corn than they would sell for in the market. Besides suffering from a falling market the farmers were weighed down by debt. Especially was this true of the West. In Kansas 60 per cent of the taxable farming land was mortgaged; in Nebraska 55 per cent; in Iowa 47 per cent. And it was the old story: the mortgages on the Western farms were generally held by the monied men of the East.

Believing that their condition was due mainly to the small amount of currency that was in circulation the farmers demanded the free and unlimited coinage of silver. They had been clamoring for this long before the pinch of the early 1890's began to be felt. It will be recalled that Congress in 1873 put an end to the coinage of the silver dollar and thus removed the white metal from the currency system. It was not long, however, before the farmers of the South and the West began to denounce the law of 1873 as a crime and to demand that silver be restored to its old time place and be given its old time value;

that is, they demanded that all the silver that might be brought to the mints should be coined at the ratio of 16 to 1 (p. 284). This demand came not only from the farmers of the South and West but also from the owners of the silver mines that had been opened up in Nevada, Utah, Colorado, and Montana. The product of these mines was falling in value. For example, the amount of silver that went into the old silver dollar had in 1875 a market price of 96 cents; five years later the price had dropped to 90 cents; ten years later to 82 cents. There were two main reasons for the decline: the output of silver mines in the United States had greatly increased and several European countries had ceased to use silver as a currency and had adopted the single gold standard. The owners of the silver mines believed that the decline in silver would be checked if Congress would provide for the coinage of the white metal into dollars, and they joined with the farmers in demanding that silver be coined at the old ratio. But the demand was stoutly resisted by the creditor classes, especially by creditors in the East, who were unwilling that their debtors should be allowed to pay their debts in silver dollars.

But the silver-mine owners and the farmers were insistent in the demand that "something be done for silver" and in 1878 they were successful in persuading Congress to pass the BlandAllison Silver Bill. This bill in its original form was drawn with the purpose of undoing the work done by the law of 1873 by restoring the free and unlimited coinage of silver "so that the white metal might again have its ancient legal equality with gold as a debt-paying money." In this form it passed in the House of Representatives but in the Senate, where it met with the opposition of Eastern Senators, it was amended so as to provide only for the coinage of a limited amount of silver. In its final form the bill provided that the secretary of the treasury should purchase each month not less than $2,000,000 and not more than $4,000,000 worth of silver which should be coined into silver dollars. Under the workings of this law about half of the total output of American silver mines was purchased and the total volume of currency was increased at

"Do

Some

thing for

Silver''

The
Sherman
Silver
Law

The Prob

lem of the Gold Reserve

the rate of about $30,000,000 a year. So the Bland-Allison Act not only "did something for silver" but also gave great satisfaction to the people who were clamoring for a larger volume of currency. And there is little doubt that a larger volume was needed for carrying on business in a proper manner, for the per capita circulation in 1879 was only $16.92, a sum too small to meet the requirements of the marvelous commercial and industrial expansion of the time.

The silver advocates were not satisfied with the terms of the Bland-Allison Act; they wanted a law that would do still more for silver. By 1890 they were strong enough to secure the enactment of a more favorable law, for in that year Congress passed the Sherman Silver Purchase Act which provided that the secretary of the treasury should buy 4,500,000 ounces of silver each month at the market price and pay for it in Treasury notes. The notes were to be legal tender for all debts public and private and were to be redeemed in gold or silver, it being declared in the act "that the established policy of the United States was to maintain the two metals on a parity with each other upon the present legal ratio [sixteen to one] or such ratio as may be provided by law." Although the new act provided for the purchase of all the silver that the American mines were turning out it did not go far enough for the silver advocates, who wanted free and unlimited coinage of the white metal.

THE PANIC OF 1893 AND THE BOND ISSUES

The Sherman Silver Law had hardly been spread upon the statute-book before it began to excite alarm in financial circles. It will be remembered that in 1879 there was set aside about $100,000,000 in gold for the redemption of greenbacks, of which there were $346,000,000 in circulation (p. 283). By 1893 the Treasury notes issued under the law of 1890 amounted to $150,000,000. Here was nearly $500,000,000 of redeemable paper money, greenbacks and Treasury notes together, while

1 The per capita circulation is found by dividing the total amount of currency in circulation by the total population of the country.