The Silver Panic
JUNE 01, 1978 by LAWRENCE W. REED
" History is little more than the register of the crimes, follies, and misfortunes of mankind," in the opinion of historian Edward Gibbon. While it may be argued that there are numerous triumphs in human affairs to write about, Gibbon’s observation seems to be true. If the typical history text were to be stripped of any mention of war, depression, famine, coercion, tragedy, genocide, scandal, rivalry, and mayhem, the remains could probably be reprinted in a leaflet.
Strangely, the awesome Panic of 1893 seems to have escaped the careful scrutiny and exhaustive research of historians. Though it occurred only eighty-five years ago, it remains an obscure episode in American history. It signaled the beginning of a deep depression. Businesses collapsed by the thousands. Banks closed their doors in record numbers. Unemployment soared and idle millions roamed the streets and countryside seeking jobs or alms. And the country witnessed a spectacular display of political fireworks, now all but forgotten.
For the believer in the free economy, the story of the Panic of 1893 offers a treasure chest of empirical support. The lessons of this tragedy add up to a compelling indictment of government’s ability to " manage" a nation’s money.
Charles Albert Collman observed that " Money trouble was the manifest peculiarity of the long, drawn out Panic of ’93." ¹ ;Indeed, a break down of the monetary system and national bankruptcy were narrowly averted in that year. But money is that great invention which permits the development of a modern exchange economy. How could something so vital to commerce become so troublesome?
Everyone knows that fingerprints are a great aid in placing a suspect at the scene of a crime. The distinguishing characteristics of each individual’s skin patterns make this possible. In the case of the Panic of 1893, the tragedy is smothered with the fingerprints of politicians. " I deem it proper at the outset to state," wrote Charles S. Smith in the October, 1893 North American Review, " that the recent panic was not the result of over-trading, undue speculation or the violation of business principles throughout the country. In my judgment it is to be attributed to unwise legislation with respect to the silver question; it will be known in history as ‘the Silver Panic,’ and will constitute a reproach and an accusation against the common sense, if not the common honesty, of our legislators who are responsible for our present monetary laws." ²
Contrary to popular impression, government in America has never been totally aloof from the monetary scene. Article I, Section 8, of the Constitution grants Congress the power " to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures." In the century preceding 1893, Congress experimented with two central banks, a national banking system, paper money issues, and fixed ratios of gold and silver.
America’s first cyclical depression occurred in 1819, after three wild years of currency inflation caused by the Second Bank of the United States. When that " money monster" was eliminated by hard money man Andrew Jackson, the economy slumped into depression again and all the maladjustments of the Bank era had to be liquidated. In 1857 the economy had to retrench after a decade of credit expansion on behalf of state governments that had forced their obligations on the state banking systems. In 1873 the post-Civil War readjustment finally corrected the excesses of the government’s rampant greenback inflation. The background of the 1893 debacle is equally interventionist and has some uniquely interesting features which give rise to the label, " The Silver Panic."
Gold and silver rose to prominence as the monies of the civilized world through a process of free and natural selection in the marketplace of exchange. Both circulated as money, though gold was far more valuable. The market ratio between the metals had been roughly 15 to 1 (15 ounces of silver trading for 1 ounce of gold) for centuries. Gold was preferred for large transactions and silver for small ones. The free market had established " parallel standards" of gold and silver, each freely fluctuating within a narrow range in relation to market supplies and demands. Before long, though, government decided it would " help out" the market by interfering to " simplify" matters. The result was another of the many well-intentioned blunders imposed on a populace by force of law: the official " fixing" of the gold/silver ratio. This became the policy of bimetallism.
Under the direction of Alexander Hamilton, the federal government adopted an official ratio of 15 to 1 in 1792. If the market ratio had been the same and had stayed the same for as long as the fixed ratio was in effect, then the fixed ratio would have been superfluous. But the market ratio, like all market prices, changed over time as supply and demand conditions changed. As these changes occurred, the fixed bimetallic ratio became obsolete and " Gresham’s Law" came into operation.
Gresham’s Law holds that bad money drives out good money when government fixes the ratio between the two circulating monies. " Bad money" refers to the money which is artificially over-valued by the government’s ratio. " Good money" is the one which is artificially undervalued. Gresham’s Law began working soon after Hamilton fixed the ratio at 15 to 1, as the market ratio stood at, roughly, 15 ½ to 1. This meant that if one had an ounce of gold, one could get 15 ½ ounces of silver on the bullion market, but only 15 ounces for it at the government’s mint. Conversely, if one had15 ounces of silver, one could get an ounce of gold at the mint but less than an ounce on the market. So silver flowed into the mint and was coined while gold disappeared, went into hiding, or was shipped overseas. The country was thus put on a de facto silver standard, even though it was the declared policy of the government to maintain both metals in circulation.
Congress in 1834 changed the ratio to 16 to 1, but the market ratio had not changed much, and this time gold was over-valued and silver under-valued. Gold flowed into the mint, silver disappeared, and the country found itself on a de facto gold standard.
With the end of the Civil War inflation, and subsequent readjustment in the depression of 1873, the story of the Panic of 1893 begins to unfold. It opens with the inflationist agitation of the 1870s.
In 1875, the newly-formed National Greenback Party called for currency inflation. The proposal attracted widespread support in the West and South where many farmers joined associations to lobby for inflation. They demanded at first that the government balloon the paper money supply in the belief that such a policy would guarantee prosperity. It was a demand that finds a less shrill but no less potent voice among many economists today. An eloquent refutation of the idea that the printing press can create economic wealth can be found in the words of Benjamin Bristow, President Grant’s Secretary of the Treasury. In his annual message of 1874, Bristow declared:
The history of irredeemable paper currency repeats itself whenever and wherever it is used. It increases present prices, deludes the laborer with the idea that he is getting higher wages, and brings a fictitious prosperity from which follow inflation of business and credit and excess of enterprise in ever-increasing ratio, until it is discovered that trade and commerce have become fatally diseased, when confidence is destroyed, and then comes the shock to credit, followed by disaster and depression, and a demand for relief by further issues. . . . The universal use of, and reliance on, such a currency tends to blunt the moral sense and impair the natural self-dependence of the people, and trains them to the belief that the Government must directly assist their individual fortunes and business, help them in their personal affairs, and enable them to discharge their debts by partial payment. This inconvertible paper currency begets the delusion that the remedy for private pecuniary distress is in legislative measures, and makes the people unmindful of the fact that the true remedy is in greater production and less spending, and that real prosperity comes only from individual effort and thrift. ³
The greenback inflation of the Civil War era left an indelible impression on many Americans. They were suspicious of plans to revive a policy of deliberate paper money expansion on behalf of any special interest group. In 1875, Congress passed the Specie Resumption Act, declaring it the policy of the government to redeem the Civil War greenbacks at par in gold on January 1, 1879. It was regarded from this point on that in order to protect the redemption of the greenbacks, the Treasury would be obliged to maintain a minimum of $100,000,000 in gold on reserve. The most that the inflationists got was a government pledge not to cancel the greenbacks once redeemed, but to reissue them so that the total number outstanding would remain the same.
Turning to Silver
The attention of the inflationists was then directed at another medium: silver. Robert F. Hoxie, in the Journal of Political Economy in 1893, wrote that the inflationists focused their demands on a silver inflation as a matter of expediency. " They had no love for silver as such," revealed Hoxie, " but it was the cheapest and most abundant substance for which they could gain support, its use would result in more legal tender currency, and its metallic character would in a measure shield the advocates from being stigmatized as inflationists." 4
The inflationists now became " silverites" and their rallying cry became " Free Silver at 16 to 1." Their influence was sufficient to secure passage of the Bland-Allison Act in February, 1878—the first of the acts putting the government in the business of purchasing quantities of silver for coinage. The Act provided for the purchase by the Treasury of not less than two, nor more than four, million dollars’ worth of silver bullion per month, to be coined into dollars each containing 371¼ grains of pure silver (which coincided with the lawful ratio of 16 to 1, since the gold dollar still contained 23.22 grains of pure gold). These dollars were to be legal tender at their nominal value for all debts and dues, public and private. Paper silver certificates were to be issued upon deposit of the bulky silver dollars in the Treasury.
The free silver forces were dissatisfied with Bland-Allison because it did not go far enough—it did not provide for the free and unlimited government purchase and coinage of silver at 16 to 1. The only silver to be coined would be the two to four million dollars’ worth that the government purchased each month, and the Treasury, while the law was on the books, rarely bought more than the minimum amount.
Silver producers in particular had a vested interest in the state of affairs, for the market price of silver had begun a long-term decline in the 1870s. Securing a government pledge to buy silver at a higher price than could be obtained in the free market was an obviously lucrative arrangement. As the market ratio of silver to gold steadily rose above 16 to 1, the profit potential became enormous.
Bland-Allison Passed Over President’s Veto
Bland-Allison was passed over the veto of President Rutherford B. Hayes. The president, in his veto message, noted that minting silver coins at the ratio of sixteen ounces of silver to one ounce of gold would drive gold out of circulation. The decline of the market price of silver had raised the market ratio at the time of passage of the act to nearly 18¼ to 1. If the mint offered to pay one ounce of gold for just sixteen ounces of silver, then only silver would be minted and the country would be on the road back to a de facto silver standard. In Hayes’ belief, " A currency worth less than it purports to be worth will in the end defraud not only creditors, but all who are engaged in legitimate business, and none more surely than those who are dependent on their daily labor for their daily bread." 5
When money is left to the free market, its supply is restricted by its scarcity and costs of production. Its value is thus preserved. The declining price of silver on the free market would have erased the profitability of many mines and hence would have prevented a drastic increase in silver currency. But when the government stepped in and bought large quantities of silver bullion for coinage, and paid more for it in gold than was offered in the market, it forced the quantity of the white metal in circulation to exceed its true demand. The government does much the same thing today when it subsidizes peanuts or wheat. The result of this political interference is a chronic surplus of these commodities.
The silverites’ drive for favorable legislation culminated in the Sherman Silver Purchase Act of 1890, which replaced the Bland-Allison Act. The Sherman Act stipulated that the Treasury had to purchase 4.5 million ounces of silver per month, or roughly twice the amount the Treasury had been purchasing under Bland-Allison. Payment was to be made in a new legal tender paper currency, the so-called Treasury notes of 1890, redeemable in either gold or silver at the discretion of the Treasury. The 4.5 million ounces of silver mandated by the law represented almost the entire output of American silver mines. This continuing subsidy to silver producers meant that the government was engaged in a full-blown force-feeding of the American economy. It was only a matter of time before the patient would suffer the pangs of indigestion.
U.S. Out of Step
The action of the United States government in 1878 and 1890 with respect to silver was especially peculiar in light of world monetary events. Germany, immediately after the Franco-Prussian War in the early 1870s, had withdrawn her silver from circulation and adopted a single gold standard. France, Belgium, Switzerland, Italy, and Greece followed by first restricting the coinage of silver and then eliminating it altogether. Denmark, Norway, and Sweden adopted the single gold standard, making silver subsidiary by 1875. In that year, the government of Holland closed its mints to the coinage of silver. A year later, the Russian government suspended the coinage of silver except for use in the Chinese trade. In 1879, Austria-Hungary ceased to coin silver for individuals, except for a special trade coin. This rapid worldwide transition from silver to gold prompted the United States Treasury Department in 1879 to note that " since the monetary disturbance of 1873-78 not a mint ‘of Europe has been open to the coinage of silver for individuals." 6 Yet the United States government, at a time when the value of silver was falling dramatically and when the nation’s trading partners were abandoning the white metal, stepped in to promote silver against gold at the unrealistic ratio of 16 to 1!
One way of looking at silver’s depreciation is to consider the annual average market value of the 3711/4 grain silver dollar. In 1878, the bullion value of that much silver was about 890; by 1890 it dropped to 810; by 1893, it was worth 600; and by 1895 it plummeted to a mere 500. A climate of uncertainty pervaded the world of finance. As Professor J. Laurence Laughlin wrote, " No one could know that contracts entered into when a dollar stood for 100 cents in gold might not be paid off in silver which stood for 50 cents on a dollar. That was the predicament in which every investor found himself who had an obligation payable only in ‘coin’ and not in gold." 7
In an article entitled " Thou Shalt Not Steal," Isaac L. Rice penned an eloquent repudiation of the government’s silver coinage policy. His argument evoked the moral side of the question and eighty years later is still a forceful indictment of monetary dishonesty:
Of the various classes of crime that come under the category of theft none is more odious and despicable than the use of false weights and measures. Stamping a coin containing 371¹/4 grains of silver as of the weight of one hundred cents, while in truth it is of the weight of fifty-three cents, is a falsification of weights morally not distinguishable from stamping any other kind of weight as of two pounds which in truth is only of one pound. Only the methods by which fraud is to be made are different. The thievish individual depends upon secret deceit, the qualities of the sneak thief; the Government on coercion, the qualities of the highwayman. 8
In accordance with inexorable economic law, the Bland-Allison and Sherman Acts caused a drain of gold from the Treasury and an inflow of silver. This tampering with the fixity of the standard threatened the Treasury’s declared policy of redeeming greenbacks and other government obligations in gold. And, the disappearance of gold from circulation and from the reserves of the nation’s banks threatened the sanctity of all contracts made in gold. Professor Laughlin observed that no producer " could feel so entirely sure of the standard of payments that he could, without fear or hesitation, make his estimates a few years ahead." 9
The Flight of Capital
The silver purchases noticeably affected the confidence of foreigners in the American economy. Many British and French investors expected devaluation of the dollar at the least, with complete financial collapse predicted by some. Capital flowed out of the country as these foreigners sold American securities. Even Americans, in increasing numbers after 1890, began exporting funds for investment in Canada, Europe, and some of the Latin American countries, all of which seemed stronger than the United States.
The inflationary impact of the Bland-Allison and Sherman Acts was particularly important in paving the way for panic and depression. A. D. Noyes, writing in Political Science Quarterly, stated that " The coinage of over-valued silver dollars since 1878, and the issue of Treasury notes on silver bullion since 1890, have actually increased the country’s silver and paper circulation, between 1879 and 1894, by seventy-five per cent." 10;
W. Jett Lauck, in his study entitled The Causes of the Panic of 1893, found that the Sherman Act inflation produced an " absence of the usual stringency in the New York money market" in the fall of 1891. Call loans ranged from two to four per cent, a significant decline from earlier levels." 11;
In 1910 the National Monetary Commission requested 0. M. W. Sprague to report on the nation’s finances since the Civil War. In his authoritative report, History of Crises Under the National Banking System, Sprague found that from January, 1891 to June, 1893, " there was an increase of $68,000,000 in the estimated amount of money in circulation." The effect on bank credit was typical of any " easy money" policy: " During 1892 the low rates for loans were a clear indication that the banks would have been glad to lend more than the demand of borrowers made possible." The classic symptoms of currency inflation were evident, a situation which Sprague found to be unsustainable. He felt that " a situation which demands increasing credits to prevent collapse is certain to arrive at that state in any case, and delay can hardly be expected to improve matters." 12
End of the Boom
The economy, drugged by easy money, was showing outward signs of prosperity. Unemployment, which had been above 5 per cent in 1890 and 1891, fell to 3.7 per cent in 1892. Crop failures in Europe coupled with exceptional harvests here in the United States boosted agriculture. President Harrison told Congress, " There has never been a time in our history when work was so abundant, or when wages were as high." 13 The boom was, however, only temporary. The twin evils of inflation and uncertainty as to the fixity of the standard were eating at the vitals of the nation’s commerce. Late in January, 1893, prices of staples such as wheat and iron, previously on the rise, began to recede. Price declines across the board foreshadowed a general cyclical contraction. " General business activity," according to Charles Hoffman, " suffered a severe check that was recognized at once in the business journals. The stock market gave ominous signs of falling prices before any sharp drop took place." 14 Banks became apprehensive over the Treasury’s loss of gold (as well as their own) and began to contract the pyramid of credit. Loans declined almost 10 per cent from February to the beginning of May. An article in the February, 1893 issue of Forum spoke of " a dangerous state of uneasiness in financial circles," and warned that " Fear is an element in monetary conditions which may be as serious in its effects as reason." 15
A dramatic event took place on February 20. The Philadelphia and Reading Railroad, a chronic invalid which nonetheless had paid its usual bond dividend the month before, collapsed into bankruptcy. " When the end came," writes Rendigs Fels, " it had a floating debt of $18.5 million compared to cash and bills receivable of little more than $100,000." 16; The failure of the Philadelphia and Reading, a firm supported by powerful Wall Street financial houses, caused many businessmen to question the conditions of other railroads and the financial institutions behind them.
When President Harrison left office on March 4, 1893, the Treasury’s gold reserve stood at the historic low of $100,982,410—an eyelash above the $100 million minimum deemed necessary for protecting the redemption of greenbacks. Merchants increasingly refused to accept silver in violation of the law and ugly threats of strikes echoed in the nation’s factories.
On April 22 the Treasury’s gold reserve fell below the $100 million minimum for the first time since the resumption of specie payments in 1879. Bankers and investors realized that the Treasury could not indefinitely continue drawing upon the remaining gold reserve to redeem the Treasury notes of 1890 in the attempt to maintain their value. Banks had to brake their easy money habits and began calling in their loans at a frantic pace. More and more investors began to fear that before securities could be sold and realized upon, depreciated silver would take the place of gold as the standard of payments.
By Wednesday, May 3, tension in the commercial community triggered a massive wave of selling on the stock market. The New York Times recorded the events the next day:
Not since 1884 had the stock market had such a break in prices as occurred yesterday, and few days in its history were more exciting. In the industrial shares particularly, there was a smashing of values almost without precedent. In the last thirty minutes the brokers on the floor of the Exchange found the quotations on the board of little use.
Figures posted at one moment were valueless the next. In the industrials which were receiving the most punishment prices were dropping a point at a time. The crowds trading in them were made up of shouting men, who struggled about the floor like football players in a scrimmage.”
The Panic of 1893 had begun! On May 4 a stock market favorite, National Cordage Trust, went into receivership. Shortly before the panic, Cordage common stock had sold for $70 per share. The plunge was precipitous, as Charles Albert Collman vividly explains:
In the Cordage Trust circle of the New York Stock Exchange, hats were being smashed, coats torn, cravats ruined. Here was an agony that meant financial life or death to many. Cordage common had gone off 18 points. The preferred had lost 22. Suddenly howls went up from the floor. Those who could distinguish the words, heard the ominous cry: " Nineteen for Cordage!" 17
The shares, a few moments later, went down to $12. 18
The Cordage Crash
The Cordage crash was taken as, in Collman’s words, " some occult signal for the halting of enterprise." 19 Plants closed their gates and went quickly into receivership. Unemployment rocketed to 9.6 per cent before year-end, nearly three times the rate for 1892. In 1894, an estimated 16.7 per cent of industrial wage-earners were idle.
From January to July, 1893, mercantile failures totaled a remarkable 3,401, with liabilities totaling $169,000,000. The bulk of the losses came after the first week of May. 0. M. W. Sprague revealed that the " failures exceeded both in number and in amount of liabilities those which had occurred in any other period of equal length in our history." 20
Bank failures and suspensions were the greatest on record. Most occurred in the South and West, where the evils of a vicious currency expansion had taken root far more extensively than in the rest of the country.
The economy was going through the pains of liquidation. The malinvestments fostered by the Bland-Allison Act and Sherman Act inflation were being sloughed off. The threat to the de facto gold standard was a factor which no doubt complicated things, heightened uncertainty, determined the timing of the panic, and exacerbated the depression, but the chief responsibility for the crisis rested with the attempted force-feeding of the nation’s money supply by government policy. The Commercial and Financial Chronicle said as much on July 8, 1893:
The country is struggling with disturbed credit and the general derangement of commercial and financial affairs which a forced and over-valued currency has developed.. . . Nothing but corrective legislation which shall remove the disturbing law, can afford any measure of real relief. 21
With the economy in depression, the necessity for eliminating the legislation which precipitated the tragedy became increasingly apparent. On June 30, President Grover Cleveland called for a special session of Congress to repeal the Sherman Silver Purchase Act of 1890. " The present perilous condition," he declared, " is largely the result of a financial policy which the Executive branch of the government finds embodied in unwise laws which must be executed until repealed by Congress." 22 The ensuing debate in the Congress was a splendid contest, pitting the forces of sound, honest money against the forces of inflation, in which the sound money men calmly answered the question, " What would you put in place of the silver purchases?" with the single, solitary word, " Nothing!"
Cockran Favors Repeal
On August 26, Congressman Bourke Cockran of New York rose to deliver a memorable address in favor of repeal. The speech has been called the most eloquent and scholarly of the entire debate. The congressman advised his colleagues:
I think it safe to assert that every commercial crisis can be traced to an unnecessary inflation of the currency, or to an improvident expansion of credit. The operation of the Sherman Law has been to flood this country with paper money without providing any method whatever for its redemption. The circulating medium has become so redundant that the channels of commerce have overflowed and gold has been expelled.
Cockran proceeded to trace the history of coinage in England and explained how debasing the currency led to recurrent depressions. James McGurrin, Cockran’s biographer, believes that the subsequent vote in the House of Representatives in favor of repeal " was due in no small measure to Bourke Cockran’s matchless eloquence and sagacious leadership. 23
The repeal bill passed the House on August 28 by a wide margin. President Cleveland’s forceful leadership prompted the Senate to do likewise in October. The New York Times heralded the occasion: " The Treasury is released from this day from the necessity of purchasing a commodity it does not require, out of a money chest already depleted, and at the risk of dangerous encroachment upon the gold reserve." 24
An indispensable pre-condition to recovery was accomplished with the repeal of the Sherman Silver Purchase Act. The derangement of the nation’s money was a big step closer to solution, though the road to recovery was long and hard. Not until 1897 did depression give way to revival and prosperity. Repeal of the Sherman Act was, by any measure, an act of congressional repentance. Indeed, it was an open admission that the Silver Panic was the offspring of a profligate, overbearing, and irresponsible government. Historian Ernest Ludlow Bogart summarized the lessons of the Panic of 1893:
It must be said that the net results of this experiment of a " managed currency," that is, one in which the government undertakes to provide the necessary money for the people, were disastrous. For the maintenance of a suitable supply the operation of normal economic forces is more reliable than the judgment of a legislative body. 25
¹Charles Albert Collman, Our Mysterious Panics, 1830-1930 (New York: Greenwood Press, 1968), p. 88.
²Charles S. Smith, " The Business Outlook," North American Review, October 1893, p. 386.
³James A. Barnes, John G. Carlisle, Financial Statesman (New York: Dodd, Mead and Co., 1931; reprint ed., Gloucester, Mass.: Peter Smith, 1967), pp. 32-33.
4 Robert F. Hoxie, " The Silver Debate of 1890," Journal of Political Economy 1 (18921893): 561.
5 Herman E. Krooss, ed., Documentary History of Banking and Currency in the United States, vol. 2 (New York: Chelsea House Publishers, 1969), pp. 1921-1922.
6 Ibid., p. 1934.
7 J. Laurence Laughlin, The History of Bimetallism in the United States, 4th ed. (New York: D. Appleton and Co., 1900), p. 274.
8 Isaac L. Rice, " Thou Shalt Not Steal," Forum 22 (September 1896—February 1897): 1.
9 Laughlin, p. 269.
10 D. Noyes, " The Banks and the Panic of 1893," Political Science Quarterly 9 (No. 1): p. 15.
11 W. Jett Lauck, The Causes of the Panic of 1893 (Boston: Houghton, Mifflin and Co., 1907), p. 80.
12 M. W. Sprague, History of Crises Under the National Banking System (Washington, D.C.: Government Printing Office, 1910; reprint ed., New York: Augustus M. Kelley, 1968), p. 158.
13 Robert Sobel, Panic on Wall Street: A History of America’s Financial Disasters (New York: Macmillan Co., 1968), p. 243.
14 Charles Hoffman, The Depression of the Nineties: An Economic History, Contributions in Economics and Economic History, no. 2 (Westport, Conn.: Greenwood Press, 1970), p. 107.
15 Geo. Fred Williams, " Imminent Danger From the Silver Purchase Act," Forum 14 (September 1892—February 1893): 789.
16 Rendigs Fels, American Business Cycles: 1865-1897 (Raleigh: University of North Carolina Press, 1959; reprint ed., Westport, Conn.: Greenwood Press, 1973), p. 185.
17 Industrials Were Hit Hard," New York Times, 4 May 1893, p. 1.
18 Collman, p. 164.
19 p. 165.
20 Sprague, p. 169.
21 " Hoffman, p. 229.
22 Congress to Meet August 7," New York Times, 1 July 1893, p. 1.
23 James McGurrin, Bourke Cockran (New York: Charles Scribner’s Sons, 1948), p. 135. p. 138.
24 " Need Buy No More Silver," New York Times, 2 November 1893, p. 1.
25 Ernest Ludlow Bogart, Economic History of the American People (New York: Longmans, Green and Co., 1937), p. 693.