[On September 20th, 1873, the New York Stock Exchange closed for ten days, a key moment in the developing economic crisis that came to be known as the Panic of 1873. So for the 150th anniversary of that moment this week I’ll AmericanStudy a handful of Panic contexts, leading up to a weekend post on 2023 echoes of those histories!]
On complex
financial realities, simpler ones, and causes and contingencies.
This might
mean I have to give back my Gilded Age Historian membership card (and I’d like
to think I’ve thoroughly earned it, between the diss/first
book and the many-times-taught
class), but I’ve never entirely gotten the whole silver/gold debate. I do
know that the Populists were entirely opposed to the late 19th
century move to a gold standard, as exemplified by perennial presidential loser
William Jennings Bryan’s famous 1896
“Cross of Gold” speech. And apparently a key stage in that shift was the April
1873 Coinage Act (also known as the Mint Act), a federal law which made it
illegal for silver bullion to be converted into dollars while allowing for the
conversion for gold. That law was caused at least in part by the German
Empire’s ending the minting of silver coins in 1871, which put more
pressure on the US silver supply and pushed the federal government to hasten
this shift toward a gold standard. But the law also significantly reduced the
overall domestic money supply, which contributed to the runs on banks that I
discussed yesterday and that blossomed into the
Panic of 1873.
Okay, I
think that has about exhausted my take on the silver and gold debate (and as
with literally everything I write about in this space, I welcome additions,
corrections, impassioned rebuttals, and what have you). But one thing I do get
on a broader level is the narratives and realities alike that came to define
the Gilded Age, and it’s important to note that while Mark Twain and Charles
Dudley Warner didn’t coin that phrase until their 1874
novel of the same name, the period’s trends were of course well underway by
1873. For example, it seems clear to me that the Coinage Act came to be
colloquially known as the Crime of 1873 not
because of specific details about silver and gold so much as due to a broader
understanding that this was a law that benefitted the wealthy (who were able to
obtain and stockpile gold much more easily) at the expense of poorer Americans.
While that doesn’t seem to have been a main impetus for or purpose of the act,
it’s fair to say that President Grant’s
corrupt corporate buddies weren’t sorry when he signed it into law.
So the
Coinage Act was unquestionably controversial, and reflects developing divisions
that would only deepen alongside the Gilded Age over the next few decades
(perhaps culminating in Bryan’s 1896 speech). But was there really enough time
between its April passage and the September start of the Panic for the Act to
have played a key role in causing that financial crisis? Given the earlier contributing
factors like the 1871 and 1872 fires on which I focused in yesterday’s post
(among other long-term factors like the collapsing
railroad boom), was the writing already on the wall for the Panic long
before Grant put pen to paper? The relationship between causes and
contingencies when it comes to historical events always makes for compelling
(if ultimately unanswerable) questions, and that’s certainly the case for this
pair of 1873 events. And wherever we come down on those questions, putting the
Act and the Panic in conversation helps us see both as stages in the evolving
and deepening Gilded Age, an example of historical interconnection with a lot
to tell us about late 19th century America.
Next 1873
contexts tomorrow,
Ben
PS. What
do you think?
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