The rough table below suggests that sudden tariff changes have precipitated panics, which have come quickly if the change was to higher protective duties and somewhat slower if the change was to lower protective duties; that slow and well considered changes doing away with protective duties generally have not caused disturbances; and that agriculture has flourished in proportion as we approached tariff for revenue only. It has for obvious reasons required about one year for financial trouble to be shown by decrease in value of farm produce as evinced by wheat-flour exports.
Special conditions, such as excessive wheat corps here and deficiency abroad or special tariff favors to flour export, may even increase the amount exported despite an otherwise untoward effect of the new tariff upon farmers. I have selected flour exports as the article best reflecting the chief interest of the farmers, and at the same time the state of general business for manufacturing, transportation and such other branches as are concerned with it.
———————————————+————-+———————————————— TARIFFS ,- They have all | | Condition of agriculture and | been designedly | | incidentally of general + protective | Panics. | business as suggested by export | save the one | | of wheat flour from 1790-1890. '- of 1846. +————-+———————————————— | | Year. Barrels. Dollars. | | 1790 724,623 4,591,293 | | 1791 619,681 3,408,246 | | 1792 824,464 ……… | | 1793 1,074,639 ……… | | 1794 846,010 ……… | | 1795 687,369 ……… | | 1796 725,194 ……… | | 1797 515,633 ……… | | 1798 567,558 ……… | | 1799 519,265 ……… | | 1800 653,056 ……… | | 1801 1,102,444 ……… | | 1802 1,156,248 ……… | | 1803 1,311,853 9,310,000 | | 1804 810,008 7,100,000 | | 1805 777,513 8,325,000 | | 1806 782,724 6,867,000 | | 1807 1,249,819 10,753,000 | | 1808 263,813 1,936,000 | | 1809 846,247 5,944,000 | | 1810 798,431 6,846,000 ,- Practical | | 1811 1,445,012 14,662,000 | exclusion of | | ,- 1812 1,443,492 13,687,000 Say + all imports | | | 1813 1,260,943 13,591,000 1814 | through the war = | 1814 | + 1814 193,274 1,734,000 '- Prohibitory Tariff. | | '- 1815 862,739 7,209,000 | | ,- 1816 729,053 7,712,000 ,- Duties for six | | '- 1817 1,479,198 17,751,376 1816 + years @ 25% and | 1818 | ,- 1818 1,157,697 11,576,970 '- thereafter @ 20%. | | | 1819 750,669 6,005,280 | | | 1820 1,177,036 5,296,664 1818 ,- Duties 25% on | | | 1821 1,056,119 4,298,043 | Cotton and Woollens, | | + 1822 827,865 5,103,280 + and all duties | | | 1823 756,702 4,962,373 | on Manufactured | | | 1824 996,792 5,759,176 '- Iron increased. | 1825-26 | | 1825 813,906 4,212,127 | | | 1826 857,820 4,121,466 | | '- 1827 868,492 4,420,081 | | ,- 1828 860,809 4,286,939 1828 { Average duty of 50%. | | | 1829 837,385 5,793,651 | | + 1830 1,227,434 6,085,953 | | | 1831 1,806,529 9,938,458 | | '- 1832 864,919 4,880,623 ,- Compromise Tariff, | | ,- 1833 955,768 5,613,010 | gradual reduction | | | 1834 835,352 4,520,781 | of duties from | | | 1835 779,396 4,394,777 | 50% average until | | | 1836 505,400 3,572,599 1833 + in 1842 the average | 1836-39 | + 1837 318,719 2,987,269 | was 20%. But this | | | 1838 448,161 3,603,299 | was levied for | | | 1839 923,151 6,925,170 | Protection not | | | 1840 1,897,501 10,143,615 '- merely for Revenue. | | '- 1841 1,515,817 7,759,646 | | ,- 1842 1,283,602 7,375,356 1842 {Imposed higher duties. | | + 1843 841,474 3,763,073 | | | 1844 1,438,574 6,759,488 | | '- 1845 1,195,230 5,398,593 | | ,- 1846 2,289,476 11,668,669 ,- Imposed lower | | | 1847 4,382,496 26,133,811 | duties and these | | | 1848 2,119,393 13,194,109 1846 | were not for | | | 1849 2,108,013 11,280,582 + Protection purposes, | | | 1850 1,385,448 7,098,570 | they were simply | 1848 | + 1851 2,202,335 10,524,331 '- for Revenue. | | | 1852 2,799,339 11,869,143 | | | 1853 2,920,918 14,783,394 ,- Reduced Tariff | | | 1854 4,022,386 27,701,444 | rates on above | | | 1855 1,204,540 10,896,908 1857 + plan because of | | '- 1856 3,510,626 29,275,148 | redundant | | ,- 1857 3,712,053 25,882,316 '- prosperity. | 1857 | + 1858 3,512,169 19,328,884 | | '- 1859 2,431,824 14,433,591 ,- War Tariff | | | protection restored | | ,- 1860 2,611,596 15,448,507 1860 + as compensation for | 1864 | '- 1861 4,323,756 24,645,849 | Internal Revenue | | '- taxes. | | | | 1862 As above………. | | 1862 4,882,033 27,534,677 1864 As above………. | | 1863 4,390,055 28,366,069 | | ,- 1864 3,557,347 25,588,249 | | | 1865 2,641,298 27,507,084 | | | 1866 2,183,050 18,396,686 | | + 1867 1,300,106 12,803,775 | | | 1868 2,076,423 20,887,798 | | | 1869 2,431,873 18,813,865 ,- 10% reduction, but | | | 1870 3,463,333 21,169,593 | coffee and tea put | | '- 1871 3,653,841 24,093,184 1872 + on Free List and | | ,- 1872 2,514,535 17,955,684 | whiskey and tobacco | 1873 | | 1873 2,562,086 19,381,664 '- taxes reduced. | | | 1874 4,094,094 29,258,094 | | | 1875 3,973,128 23,712,440 1875 ,- 10% reduction | | | 1876 3,935,512 24,433,470 '- above repealed. | | + 1877 3,343,665 21,663,947 | | | 1878 3,947,333 25,695,721 | | | 1879 5,629,714 29,567,713 | | | 1880 6,011,419 35,333,197 ,- Duties really raised | | | 1881 7,945,786 45,047,257 | on class of goods | | '- 1882 5,915,686 36,375,055 | most used, but | | ,- 1883 9,205,664 54,824,459 | apparently lowered | 1884 | | 1884 9,152,260 51,139,695 1883 + the tariff, for | | | 1885 10,648,145 52,146,336 | it considerably | | + 1886 8,179,241 38,443,955 | reduced rates on | | | 1887 11,518,449 51,950,082 | many little used | | | 1888 11,963,574 54,777,710 '- classes of goods. | | '- 1889 9,374,803 45,296,485 | | 1890 ,- McKinley Bill | | ,- 1890 12,231,711 57,036,168 '- average of 60% duty. | | '- 1891 11,344,304 54,705,616 | | 1892 15,196,769 75,362,283 ,- Free silver | | | and sudden | | 1893 16,620,339 75,494,347 1893 + ill-distributed | | 1894 16,859,533 69,271,770 -94 | and drastic tariff | | 1895 15,268,892 51,651,928 | reductions and | | 1896 14,620,864 52,025,217 '- insufficient revenue.| | | | 1897 14,569,545 55,914,347 1897 ,- | | 1898 15,349,943 69,263,718 | Tariff | | 1899 18,485,690 73,093,870 | disturbance | | 1900 18,699,194 67,760,886 | to | | 1901 18,650,979 69,459,296 | higher | | 1902 17,759,203 65,661,974 1903 | rates. | | 1903 19,716,203 73,756,404 | | | 1904 16,699,432 68,894,836 + The | | 1905 8,826,335 40,176,136 | propaganda | | 1906 13,919,048 59,106,869 1907 | for | | 1907 15,584,667 62,175,397 | keener | | 1908 13,937,247 64,170,508 | regulation | | 1909 10,521,161 51,157,366 | of | | 1910 9,040,987 47,621,467 | business. | | 1911 10,129,435 49,386,946 '- | | 1912 11,006,487 50,999,797 | | 1913 ,- Tariff reductions to | | 1913 11,394,805 53,171,537 | produce a revenue; | | 1914 12,768,073 62,391,503 | not on a protective | | + basis. The further | | | regulating of | | | business. | | '- The "World War." | | ———————————————+————-+————————————————]
The retarding or precipitating influence of a good or bad condition of agriculture upon the advent of a panic is also indicated.
The symptoms of approaching panic, generally patent to every one, are wonderful prosperity as indicated by very numerous enterprises and schemes of all sorts, by a rise in the price of all commodities, of land, of houses, etc., etc., by an active request for workmen, a rise in salaries, a lowering of interest, by the gullibility of the public, by a general taste for speculating in order to grow rich at once, by a growing luxury leading to excessive expenditures, a very large amount of discounts and loans and bank notes [Footnote: Our recent banking history has proved rather an exception to this law as far as bank notes are concerned, because of the obviously unusual cause of sudden and enormous calling in of government bonds, the basis of bank-note issue.] and a very small reserve in specie and legal-tender notes and poor and decreasing deposits.
On the other hand, the lowest point of depression following a panic is accompanied by the converse of the symptoms just enumerated.
Bank balance sheets reflect in cold figures the result of the above influences. Prices being high, and discounts and loans large in proportion to deposits, and having steadily increased for years, danger is near; further, when discounts and loans are not only large in proportion to deposits, having increased steadily for years, and then suddenly fallen off noticeably for a considerable time, only to increase again, danger is imminent.
On the other hand, a steady and radical reduction of loans and discounts, following a panic and extending until new enterprises are very scarce, till prices are very low, till there is wide-spread idleness among workmen, a decrease in salaries and in interest rates, when the public is wary and speculation dead, and expenditures are cut down as far as possible, may be taken to mean a rapid and continued resumption of every prosperous business: but if the above process is only partially performed, renewed trouble must result;—in other words, liquidation to really be helpful (to congested business) must be thorough.
A study of the first of the following tables, "National Banks of the United States," illustrates the above generalization. It is unnecessary to mention that 1878, 1884, and 1890 have been the last three panic years. But it is very necessary in studying this table, to bear in mind that its figures are taken from the standing of the banks at the first of the year, while the panics generally occurred later in the year: the last two, for instance in the second and fourth quarter, respectively. The third and fourth tables will give more exact figures in this connection. Table Two, dealing with State Banks, is given merely to round out our banking history as told in figures.
The increase or diminution of deposits of course reflects a confident and successful, or a panicky and impoverishing, state of general business.