Silver
The Free Silver movement arose, gaining support from farmers (who sought to invigorate the economy and cause inflation, thus allowing them to repay their debt with cheaper dollars) and mining interests (who sought the right to turn silver directly into money). The Sherman Silver Purchase Act of 1890, while falling short of the Free Silver movement's goals, required the U.S. government to buy millions of ounces of silver (driving up the price of the metal and pleasing silver miners). People attempted to redeem silver notes for gold; ultimately the statutory limit for the minimum amount of gold in federal reserves was reached and US notes could no longer be successfully redeemed for gold. Investments during the time of the Panic were heavily financed through bond issues with high interest payments. The National Cordage Company (the most actively traded stock at the time) went into receivership as a result of its bankers calling their loans in response to rumors regarding the NCC's financial distress. The company, a rope manufacturer, had tried to corner the market for imported hemp. As the demand for silver and silver notes fell, the price and value of silver dropped. Holders worried about a loss of face value of bonds and many became worthless.
A series of bank failures followed, and the Northern Pacific Railway, the Union Pacific Railroad and the Atchison, Topeka & Santa Fe Railroad failed. This was followed by the bankruptcy of many other companies; in total over 15,000 companies and 500 banks failed (many in the west). According to high estimates, about 17%–19% of the workforce was unemployed at the Panic's peak. The huge spike in unemployment, combined with the loss of life savings kept in failed banks, meant that a once-secure middle-class could not meet their mortgage obligations. Many walked away from recently built homes as a result. From this the sight of the vacant Victorian "haunted house" entered the American mindset.
Read more about this topic: Panic Of 1893
Famous quotes containing the word silver:
“When I was a kid I used to tell myself the moon was a silver gong and if I could climb high enough to beat on it with both hands all my wishes would come true.”
—John Dos Passos (1896–1970)
“Indeed, I thought, slipping the silver into my purse ... what a change of temper a fixed income will bring about. No force in the world can take from me my five hundred pounds. Food, house and clothing are mine for ever. Therefore not merely do effort and labour cease, but also hatred and bitterness. I need not hate any man; he cannot hurt me. I need not flatter any man; he has nothing to give me.”
—Virginia Woolf (1882–1941)
“When I from black and he from white cloud free,
And round the tent of Godlike lambs we joy,
I’ll shade him from the heat till he can bear
To lean in joy upon our father’s knee;
And then I’ll stand and stroke his silver hair,
And be like him, and he will then love me.”
—William Blake (1757–1827)