The consumption of pig-iron, which had been 1,416,000
tons in 1868, rose to 2,810,000 tons in 1873. High
prices ruled. The maximum prices in the period following
1860 were, it is true, attained in 1866, but if they
fell in the years 1867 and 1868 it was only to rise
again to a point nearly equal to that of 1866 in 1871
and 1872. The activity in the commercial centers is
reflected in the rise of clearings in the New York
Clearing House from twenty-eight billions of dollars in
1868 to thirty-five billions in 1873. The foreign trade
of the United States showed a like activity, the
aggregate of exports and imports rising from
$609,000,000 in the fiscal year 1868 to $1,164,000,000
in 1873.
But even more significant of the expansion of activity
in the United States was the fact of increased
importations from abroad. In 1870 the imports exceeded
the exports by $43,000,000, built 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 Jay
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. Clearing House loan certificates
were issued in large quantities. There had been certain
premonitory symptoms of the approaching collapse.
Railroad-building reached its highest point in 1871,
pig-iron its highest price in September 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 point 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, and new
enterprises were not undertaken. Railroad construction
fell off, 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
thereafter until 1882. The consumption of pig-iron
declined until it reached 1,900,000 tons in 1876.
Clearings in New York City fell off from $35,000,000,000
in 1873 to $23,000,000,000 in 1874, and reached their
lowest point since 1863 at $22,000,000,000 in 1876. In
foreign trade the excess of imports disappeared in 1874.
As the year 1873 marks the outbreak of the crisis, so
the year 1876 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 failures, as reported by R.G. Dun
& Co., as follows:
Year: 1869 Number: 2,799 Liabilities: 75,054,054
Year: 1870 Number: 3,546 Liabilities: 88,242,000
Year: 1871 Number: 2,915 Liabilities: 85,252,000
Year: 1872 Number: 4,069 Liabilities: 121,056,000
Year: 1873 Number: 5,183 Liabilities: 228,499,900
Year: 1874 Number: 5,830 Liabilities: 155,239,000
Year: 1875 Number: 7,740 Liabilities: 201,000,000
Year: 1876 Number: 9,094 Liabilities: 191,117,786
Year: 1881 Number: 4,735 Liabilities: 65,752,000
Year: 1882 Number: 6,738 Liabilities: 101,547,564
Year: 1883 Number: 9,184 Liabilities: 172,874,172
Year: 1884 Number: 10,968 Liabilities: 226,343,427
Year: 1885 Number: 10,637 Liabilities: 124,220,321
Every crisis, panic, and depression is marked by
analogous characteristics. Whatever data are appropriate
to show expanding conditions and an inflated 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 of conditions, but before the crisis of
1837 similar activity was shown in canal construction.
Before the panic of 1825, in England, there were large
investments in manufacturing establishments, while the
panic of 1893 was preceded by reckless investments in
foreign countries.
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