Latest / History of Minnesota and Tales of the Frontier, Part 1 / 042 - The Monetary and Business Flurry of 1873 and Panic of 1893 Minor Happenings

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042 - The Monetary and Business Flurry of 1873 and Panic of 1893 Minor Happenings · History of Minnesota and Tales of the Frontier, Part 1

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  Speaker 1: Section forty two of the History of Minnesota in Tales
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  Speaker 1: of the Frontier, Part one. This is a LibriVox recording.
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  Speaker 1: All LibriVox recordings are in the public domain. For more
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  Speaker 1: information or to volunteer, please visit LibriVox dot org. Recording
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  Speaker 1: by Andrea Kay. The History of Minnesota in Tales of
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  Speaker 1: the Frontier, Part one by Charles E. Flandreaux, Section forty two.
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  Speaker 1: The Monetary and Business Flurry of eighteen seventy three and
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  Speaker 1: Panic of eighteen ninety three. Minor happenings The Monetary and
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  Speaker 1: Business Flurry of eighteen seventy three and Panic of eighteen
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  Speaker 1: ninety three. It has been customary in the United States
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  Speaker 1: to expect a disturbance in monetary and business affairs about
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  Speaker 1: once in every twenty years, and the expectation has not
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  Speaker 1: been disappointed since the Panic of eighteen thirty seven. I
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  Speaker 1: have described the effect of the Panic of eighteen fifty
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  Speaker 1: sen on the territory in state of Minnesota and the
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  Speaker 1: difficulties of recuperating from the shock. The next similar event
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  Speaker 1: was not due until eighteen seventy seven, but there was
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  Speaker 1: always some special disaster to precipitate such occurrences. In eighteen
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  Speaker 1: fifty seven it was the failure of the Ohio Life
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  Speaker 1: Insurance and Trust Company, and in eighteen seventy three it
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  Speaker 1: was the failure of J. Cook and Company of Philadelphia.
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  Speaker 1: This house had been very prominent in placing the bonds
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  Speaker 1: of the Northern Pacific Railroad Company and in the construction
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  Speaker 1: of the road, and was relied upon by many classes
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  Speaker 1: of people to invest their money for them. And when
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  Speaker 1: their failure was announced, its effect in the East was disastrous,
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  Speaker 1: but here in Minnesota it only affected us in a
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  Speaker 1: secondary or indirect way, in stopping railroad building and creating
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  Speaker 1: general alarm in business circles. We had been diligently at
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  Speaker 1: work for sixteen years endeavoring to recuperate from the disaster
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  Speaker 1: of eighteen fifty seven, and had to a great extent succeeded.
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  Speaker 1: Real estate had partially revived, but had not reached the
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  Speaker 1: boom feature, and the state was on a sound financial basis. Fortunately,
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  Speaker 1: we had not recovered sufficiently to become investors in railroad
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  Speaker 1: securities to any great extent, and land speculation had not
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  Speaker 1: reached its usual twenty years mark. We had also on
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  Speaker 1: hand a local affliction in the presence of grasshoppers, so
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  Speaker 1: that although it disturbed business generally, it did not succeed
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  Speaker 1: in producing bankruptcy, and we soon shook it off. This
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  Speaker 1: periodical financial disturbance has been attributed to various causes. From
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  Speaker 1: the regularity of its appearance, it must be the result
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  Speaker 1: of some impelling force of a generally similar character. My
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  Speaker 1: opinion is that the period of twenty years being the
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  Speaker 1: average time of man's active business life, the actors of
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  Speaker 1: the second period have not the benefit of the experience
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  Speaker 1: gained by those of the previous one, and they repeat
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  Speaker 1: the same errors that produced the former disasters. But be
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  Speaker 1: that as it may. When the period extending from eighteen
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  Speaker 1: seventy three to eighteen ninety three had passed, the same
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  Speaker 1: result had occurred, and with quite as much force as
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  Speaker 1: any of its predecessors. Land speculation had reached the point
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  Speaker 1: of absolute insanity. Everybody thought he could become rich if
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  Speaker 1: he only bought. Values already ridiculously expanded, continued to increase
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  Speaker 1: with every sale. Anyone who had money enough to pay
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  Speaker 1: down a small amount as earnest and intelligence enough to
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  Speaker 1: sign a note and mortgage for the balance of the
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  Speaker 1: purchase price became purchasers to the limit of their credit.
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  Speaker 1: When a party whose credit was questioned needed an endorser,
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  Speaker 1: he found many requiring the same assistants, who were ready
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  Speaker 1: to swap endorsements with him. Everyone became deeply in debt.
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  Speaker 1: The country was flooded with paper which was secured on
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  Speaker 1: the impossibility of values continuing, the banks became loaded with
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  Speaker 1: alleged securities, and when the bubble was strained to the
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  Speaker 1: bursting point, and someone of supposed financial soundness was compelled
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  Speaker 1: to succumb to the pressure, the veil was lifted, which
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  Speaker 1: opened the eyes of the community and produced a rush
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  Speaker 1: for safety, which induced and was necessarily followed by a
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  Speaker 1: general collapse in eighteen eighty eight. In eighteen eighty nine,
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  Speaker 1: banks suspended money disappeared, and in eighteen ninety three, in
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  Speaker 1: the expressive language of the West, everybody who was in
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  Speaker 1: debt and all stockholders and depositors and defunct banks went broke.
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  Speaker 1: Had the cities of Saint Paul and Minneapolis been captured
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  Speaker 1: by an enemy and a ransom of ten million dollars
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  Speaker 1: been demanded from each paid and carried away, the consequences
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  Speaker 1: upon business would not have been worse. It was much
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  Speaker 1: the same in all the large cities of the state,
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  Speaker 1: as land speculation was more active there than in the
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  Speaker 1: rural districts, and no matter what may happen, some value
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  Speaker 1: always remains to farm lands, while under such a collapse
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  Speaker 1: as that of eighteen ninety three, the greater part of
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  Speaker 1: city property becomes utterly valueless for the present and much
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  Speaker 1: of it forever. There was, however, a great difference between
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  Speaker 1: the consequences of eighteen ninety three and the previous disasters
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  Speaker 1: of eighteen fifty seven. In eighteen seventy three, although the
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  Speaker 1: disturbance was great, we were better prepared to meet it.
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  Speaker 1: Population had increased immensely, the area of civilization and production
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  Speaker 1: had kept pace with immigration. Manufactures of many kinds had
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  Speaker 1: been introduced, and although we were seriously wounded, our hopes
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  Speaker 1: of recovery had soult grounds to rest upon, and we
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  Speaker 1: were not dismayed. The only remedy in such cases, industry
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  Speaker 1: and economy, was applied through necessity, if not from choice,
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  Speaker 1: and recovery has been slowly progressing up to the present
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  Speaker 1: time nineteen hundred, when we may be classed as convalescent.
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  Speaker 1: Will this experience serve to prevent a recurrence of the
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  Speaker 1: follies of the past. Most assuredly not those who have
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  Speaker 1: reaped wisdom will have surrendered the speculative arena to others
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  Speaker 1: before the financial cycle rolls around, and history will repeat itself. Notwithstanding,
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  Speaker 1: the state never had a better future outlook than at present.
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  Speaker 1: It does not follow that the panic due about nineteen
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  Speaker 1: thirteen will be caused by overspeculation in real estate. It
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  Speaker 1: is more likely to be produced by the excessive and
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  Speaker 1: fraudulent capitalization of all sorts of corporations called trusts, which will,
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  Speaker 1: of course succumbed to the first serious blow. With the
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  Speaker 1: exception of the events I have narrated, including the financial
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  Speaker 1: troubles of eighteen seventy three, in eighteen ninety three, nothing
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  Speaker 1: of special importance to the state has happened, except a
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  Speaker 1: few occurrences of minor moment minor happenings. September fifth, eighteen
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  Speaker 1: seventy eight, President Hayes made a short visit to the
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  Speaker 1: state and delivered an address at the State Agricultural Fair.
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  Speaker 1: On the seventh of September eighteen seventy six, an organized
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  Speaker 1: gang of bandits which had been terrorizing the state of
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  Speaker 1: Missouri and surrounding states with impunity entered this state and
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  Speaker 1: attacked a bank in the town of Northfield in Rice County,
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  Speaker 1: with the intent of looting it. The cashier, mister Haywood, resisted,
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  Speaker 1: and they shot him dead. The people of the town,
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  Speaker 1: hearing of the raid, turned out and opened fire on
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  Speaker 1: the robbers, who fled. With the loss of one killed
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  Speaker 1: in their flight, they killed the swede before they got
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  Speaker 1: out of the town. The people of the counties through
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  Speaker 1: which their flight led them turned out, and before any
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  Speaker 1: of them passed the border of the state, two more
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  Speaker 1: of them were killed and three captured. Two escaped. The
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  Speaker 1: captured were three brothers named Younger, and those who escaped
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  Speaker 1: were supposed to be the notorious James brothers of Missouri.
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  Speaker 1: The three Younger brothers pleaded guilty to a charge of murder,
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  Speaker 1: and on account of a peculiarity in the law that
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  Speaker 1: only allowed the death sentence to be imposed by a jury,
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  Speaker 1: they were all sentenced to imprisonment for life. One of
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  Speaker 1: them has since died and the other two remained in prison.
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  Speaker 1: The manner in which this raid was handled by our
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  Speaker 1: citizens was of immense value to the state, as it
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  Speaker 1: proved a warning to all such desperadoes that Minnesota was
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  Speaker 1: a bad feel for their operations, and we have had
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  Speaker 1: no more trouble from that class of affair. In eighteen
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  Speaker 1: seventy seven, the Constitution was amended by providing for biennial
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  Speaker 1: instead of annual sessions of the legislature. On May second,
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  Speaker 1: eighteen seventy eight, a very singular and disastrous event took
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  Speaker 1: place at Minneapolis. Three large flowering mills were blown up
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  Speaker 1: by a dust explosion and eighteen men killed. It was
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  Speaker 1: inexplicable for a time, but it was afterwards discovered that
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  Speaker 1: such explosions had occurred before, and prompt measures were taken
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  Speaker 1: to prevent a repetition of the trouble. On the fifteenth
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  Speaker 1: day of November eighteen eighty a portion of the large
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  Speaker 1: insane asylum at Saint Peter was destroyed by fire, and
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  Speaker 1: eighteen of the inmates were burned. Others dying of injuries
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  Speaker 1: received The pecuniary loss amounted to one hundred fifty thousand dollars.
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  Speaker 1: On the first day of March eighteen eighty one, the
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  Speaker 1: old capitoal Burth earned while the legislature was in session.
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  Speaker 1: That body moved their sittings to the Saint Paul Market House,
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  Speaker 1: which had just been finished, where they remained until the
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  Speaker 1: present Capitol building was erected upon the site of the
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  Speaker 1: one destroyed. On the twenty fifth day of January eighteen
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  Speaker 1: eighty four, the state prison at Stillwater was partially burned.
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  Speaker 1: On the fourteenth day of September eighteen eighty six, Saint
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  Speaker 1: Cloud and Sack Rapids were struck by a cyclone. Scores
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  Speaker 1: of buildings were destroyed and about seventy of the inhabitants killed.
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  Speaker 1: In the year eighteen eighty nine, the Australian system of
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  Speaker 1: voting at elections was introduced in cities of ten thousand
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  Speaker 1: inhabitants and over, and in eighteen ninety two the system
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  Speaker 1: was made general throughout the state. On the seventh day
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  Speaker 1: of April eighteen ninety three, the legislature passed an Act
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  Speaker 1: for the building of a new state capital in the
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  Speaker 1: city of Saint Paul and appointed commissioners to carry out
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  Speaker 1: the object. They selected an eligible and conspicuous site between
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  Speaker 1: University Avenue, Cedar and Wabashaw Streets, near the head of Wabashaw.
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  Speaker 1: They adopted for the materials which were to enter into it,
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  Speaker 1: granted for the lower and Georgia White marble for the
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  Speaker 1: upper stories. The whole cost was not to exceed two
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  Speaker 1: million dollars. The cornerstone of the building was laid on
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  Speaker 1: the twenty seventh day of July eighteen ninety eight, with
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  Speaker 1: appropriate and very imposing ceremonies, in the presence of an
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  Speaker 1: immense throng of citizens from all parts of the state.
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  Speaker 1: Senator Davis delivered the oration and ex Governor Alexander Ramsay
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  Speaker 1: laid the cornerstone. The building has reached the base of
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  Speaker 1: the dome and will be a very beautiful and serviceable structure.
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  Speaker 1: On September one, eighteen ninety four, there was a most
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  Speaker 1: extensive and disastrous fire in Pine County. Four hundred square
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  Speaker 1: miles of territory were burned over by a forest fire.
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  Speaker 1: The towns of Hinckley and Sandstone were totally destroyed and
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  Speaker 1: four hundred people burned. The money loss was estimated at
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  Speaker 1: one million dollars. This disaster was exactly what was needed
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  Speaker 1: to awaken the people of the state to the necessity
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  Speaker 1: of providing means for the prevention of forest and prairie
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  Speaker 1: fires and the preservation of our forests. Shortly after the
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  Speaker 1: Hinckley fire, a state convention was held at the Commercial
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  Speaker 1: Club in Saint Paul to devise legislation to accomplish this
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  Speaker 1: desirable end, which resulted in the passage of an Act
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  Speaker 1: at the session of the Legislature in eighteen ninety five
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  Speaker 1: entitled and Act for the Preservation of Forests of this
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  Speaker 1: State and for the Prevention and Suppression of Forest and
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  Speaker 1: Prairie Fires. Under this Act, the State Auditor was made
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  Speaker 1: the Forest Commissioner of the State, with authority to appoint
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  Speaker 1: a Chief fire war Iarden. The supervisors of towns, mayors
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  Speaker 1: of cities, and presidents of village councils are made firewardens
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  Speaker 1: of their respective local jurisdictions, and the machinery for the
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  Speaker 1: prevention of fires is put in motion that is of
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  Speaker 1: immense value to the state. The Forest Commissioner appointed General C. C.
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  Speaker 1: Andrew's Chief fire Warden, one of the best equipped men
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  Speaker 1: in the state for the position, and no serious trouble
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  Speaker 1: has since occurred in the way of fires. On the
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  Speaker 1: ninth day of February eighteen eighty seven, the Minnesota Historical
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  Speaker 1: Society passed a resolution declaring that the pretenses made by
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  Speaker 1: Captain Willard Glacier to having been the discoverer of the
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  Speaker 1: source of the Mississippi River were false, and very little
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  Speaker 1: has been heard from him since. On the tenth day
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  Speaker 1: of October eighteen eighty seven, President Cleveland visited the state
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  Speaker 1: and made a short stay. This enumeration of passing events
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  Speaker 1: looks a little like a catalog of disasters, except the
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  Speaker 1: building of the new capital and the visits of Presidents
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  Speaker 1: Hayes and Cleveland. But it must be remembered that Minnesota
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  Speaker 1: is such an empire in itself that such happenings scarcely
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  Speaker 1: produce a ripple on the surface of its steady and
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  Speaker 1: continuous progress. It is because these events can be particularized
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  Speaker 1: and described that they assume proportions beyond their real importance.
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  Speaker 1: But when compared with the colossal advances made by the
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  Speaker 1: state during the period covering them, they dwindle into mere
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  Speaker 1: points of educational experience to be guarded against in the future.
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  Speaker 1: While the many blessings showered upon the state, consisting of
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  Speaker 1: the health and wealth imparting sunshine, the refreshing and fructifying
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  Speaker 1: rains and dews of heaven, which like the smiles of Providence,
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  Speaker 1: and the life sustaining air that surrounds us, are too
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  Speaker 1: intangible and indefinable for more than thankful recognition, our tribulations
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  Speaker 1: were really blessings in disguise. The bold invasion of the
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  Speaker 1: robbers proved our courage, The storms and fires proved our
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  Speaker 1: generosity to the distress, and taught us lessons in the
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  Speaker 1: wisdom of prevention. Minnesota has as much to be thankful
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  Speaker 1: for and as little to regret as any state in
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  Speaker 1: the West, and our troubles only prove that we have
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  Speaker 1: a very robust vitality difficult to permanently impair. End of
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  Speaker 1: section forty two. Recording by Andrea Kay