Atlantic Monthly

ڎAtlantic Monthly, Vol. 1, No. 4, February, 1858

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Title: Atlantic Monthly, Vol. 1, No. 4, February, 1858
Author: Various
Release Date: May 10, 2004 [EBook #12319]
Language: English
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THE ATLANTIC MONTHLY,
A MAGAZINE OF LITERATURE, ART, AND POLITICS.
* * * * *
VOL. I.--FEBRUARY, 1858.--NO. IV.
* * * * *
THE GREAT FAILURE.
The crucial fact, in this epoch of commercial catastrophes, is not the stoppage of Smith, Jones, and Robinson,--nor the suspension of specie payments by a greater or less number of banks,--but the paralysis of the trade of the civilized globe. We have had presented to us, within the last quarter, the remarkable, though by no means novel, spectacle of a sudden overthrow of business,--in the United States, in England, in France, and over the greater part of the Continent.
At a period of profound and almost universal peace,--when there had been no marked deficit in the productiveness of industry, when there had been no extraordinary dissipation of its results by waste and extravagance,--when no pestilence or famine or dark rumor of civil revolution had benumbed its energies,--when the needs for its enterprise were seemingly as active and stimulating as ever,--all its habitual functions are arrested, and shocks of disaster run along the ground from Chicago to Constantinople, toppling down innumerable well-built structures, like the shock of some gigantic earthquake.
Everybody is of course struck by these phenomena, and everybody has his own way of accounting for them; it will not, therefore, appear presumptuous in us to offer a word on the common theme. Let it be premised, however, that we do not undertake a scientific solution of the problem, but only a suggestion or two as to what the problem itself really is. In a difficult or complicated case, a great deal is often accomplished when the terms of it are clearly stated.
It is not enough, in considering the effects before us, to say that they are the results of a panic. No doubt there has been a panic, a contagious consternation, spreading itself over the commercial world, and strewing the earth with innumerable wrecks of fortune; but that accounts for nothing, and simply describes a symptom. What is the cause of the panic itself? These daring Yankees, who are in the habit of braving the wildest tempests on every sea, these sturdy English, who march into the mouths of devouring cannon without a throb, these gallant Frenchmen, who laugh as they scale the Malakoff in the midst of belching fires, are not the men to run like sheep before an imaginary terror. When a whole nation of such drop their arms and scatter panic-stricken, there must be something behind the panic; there must be something formidable in it, some real and present danger threatening a very positive evil, and not a mere sympathetic and groundless alarm.
Neither do we conceive it as sufficiently expressing or explaining the whole facts of the case, to say that the currency has been deranged. There has been unquestionably a great derangement of the currency; but this may have been an effect rather than a cause of the more general disturbance; or, again, it may have been only one cause out of many causes. In an article in the first number of this magazine, the financial fluctuations in this country are ascribed to the alternate inflation and collapse of our factitious paper-money. Adopting the prevalent theory, that the universal use of specie in the regulation of the international trade of the world determines for each nation the amount of its metallic treasure, it was there argued that any redundant local circulation of paper must raise the level of local prices above the legitimate specie over exports; which imports can be paid for only in specie,--the very basis of the inordinate local circulation. Of course, then, there is a rapid contraction in the issue of notes, and an inevitable and wide-spread rupture of the usual relations of trade. But although this view is true in principle, and particularly true in its application to the United States, where trade floats almost exclusively upon a paper ocean, it is yet an elementary and local view;--local, as not comprising the state of facts in England and France; and elementary, inasmuch as it omits all reference to the possibility of a great fluctuation of prices being produced by other means than an