1873

of many blocks, carried on trade. Not many public buildings were lost, but the warehouses covering the site of the birthplace of Franklin and the homes of Webster and Everett perished. The loss in buildings and merchandise was estimated at seventyfive millions of dollars, and fifty millions of insurance capital were wiped out. The fire spread over an area of sixty acres. The Metis, a propeller, collided with a schooner on Long Island Sound on the 30th of August, and caused the loss of fifty lives.

About seven hundred miners were killed during the preceding three years, and seventeen hundred maimed, in the anthracite coal region in Pennsylvania.

Ulysses S. Grant and Henry Wilson took the oaths of office as President and Vice-President on the 4th of March.

The Crédit Mobilier scandal was ventilated by congressional inquiry early in the year. James G. Blaine, Speaker of the House of Representatives, had offered a resolution calling for such investigation in December, 1872, upon the meeting of Congress. The facts brought out were as follows: No private contractors could be engaged to build the Union Pacific Railroad, which Congress chartered in 1862. A corporation was formed, therefore, called the Crédit Mobilier, of which the stockholders were mostly stockholders of the railroad company. This new organization agreed to build the road in consideration of certain land grants and government bonds issued originally to the railroad company to assist in its construction. The capital stock of the Crédit Mobilier was $2,500,000, but by subsequent legislation this was increased 50 per cent, the addition being taken by the holders of the original stock. The Crédit Mobilier then went ahead and built the road. The profits derived from this contract were so great that in the winter of 1867-8 the stock was estimated to have a value of $380 or $400 per share of $100. It was not placed on the general market, however, All sales were private, and the character of the scheme was not generally known. In June, 1868, a dividend of $60 a share was declared. This was the largest dividend received by the holders. It appeared subsequently that during this same winter Oakes Ames, a congressman from Massachusetts, had approached various congressmen and senators with quiet offers of Crédit Mobilier stock at the low price of $100 a share, Some of them, including Schuyler Colfax, then Speaker of the House, and James Brooks, of New York, a government director of the Pacific Railroad, purchased a greater or less quantity, most of them, however, taking only a few shares. Several did not pay cash, but gave personal notes. They afterwards alleged that they saw no impropriety in the purchase, any more than in any other investment, and Ames, in "letting them in on the groundfloor," was apparently doing them only a personal favor. Upon inquiry, it appeared that the Pacific Railroad and Crédit Mobilier companies would not ask for any further legislation from Congress, and so most of the purchasers, if troubled with conscientious scruples, concluded that they might honorably retain

the stock. Some of them, however, growing suspicious, returned it to Mr. Ames and took up their notes. But, while the corporations did not intend to ask for positive legislation, they were threatened by adverse legislation, against which they wished to sway as many members as possible. There was some popular dissatisfaction with the high rates of transportation charged by the Union Pacific, and in December, 1867, Mr. Washburne, of Wisconsin, introduced a bill into Congress to provide for their reduction. This had been anticipated, and was known as "the Washburne movement." An inkling of the profits enjoyed by the Crédit Mobilier having been obtained in certain quarters, too, there was talk of depriving the Union Pacific of some of its land-grants. This project, however, though anticipated by the managers of the Crédit Mobilier, was not carried into effect. But the two schemes afforded sufficient motive for what, upon exposure, was looked upon as bribery by Mr. Ames. These facts having been reported by the investigating committee to Congress in February of this year, Mr. Ames was expelled from the House of Representatives for his conduct, and Mr. Brooks for accepting bribes. It was also proposed to impeach Mr. Colfax, who at this time was VicePresident, but after careful consideration the judiciary committee advised against it, since the offence of accepting the stock was not committed during the term of office he was now finishing. Mild censure was passed upon some other congressmen. The scandal attracted wide attention all over the country, and was occasionally referred to, afterwards, in national politics.

Modoc Indians, numbering about two hundred, attracted much attention by their stubborn resistance to Federal troops, which were sent to capture them on the southern boundary of Oregon, and to remove them to a reservation. Late in 1872, peaceful overtures were made to them which they haughtily rejected. A fight with troops sent to give moral support to the negotiations followed. Thereupon the Modocs, led by Captain Jack and Scar-faced Charlie, withdrew to some lava beds, just over the frontier in Northern California. Aside from this particular band, the other Indians of the Modoc tribe, together with numerous Klamath Indians in Northern California, were quietly removed to the reservation. The Klamaths were a peaceful class, and had been serving the whites as herdsmen, and in other similar capacities. But certain agitators raised the cry that they were rivals of white workmen; and thus arose the crusade against them. These facts becoming known, during the winter and spring of this year, some opposition was made in the East to the war against the hostile Modocs. But an event occurred in April which robbed them of popular sympathy. A commission had been sent to treat with them again. A meeting under a flag of truce was arranged, and a conference was in progress, the 11th, when, without warning, a murderous assault was made upon the government's representatives by the savages. General Canby and Mr. Thomas were killed outright, and General

Meacham, the third commissioner, was seriously wounded. War against the treacherous redskins was now waged with great bitterness. The nature of the stronghold, which they had occupied, was such that their capture was exceedingly difficult. The Federal soldiers were less familiar with the lava beds than the Indians were, and were repulsed with considerable slaughter almost every time they made an attack; while the Indians suffered but little loss. But the affair had reached a stage where the government was obliged to go ahead, and the siege was pressed, at great expense, for several months. The Indians were finally captured, and the ringleaders put on trial for their murderous assault on the Federal commissioners. Seven of them were convicted and sentenced to be hanged. In the case of four this sentence was commuted. The others were hanged Oct. 3d. What was left of the warrior band, a mere handful, was now removed to a reservation in Dakota.

Profound sensation was created by the seizure of a sailing vessel known as the Virginius, carrying the American flag, by the Spanish war steamer Tornado, Oct. 31st, on the suspicion that the former was carrying munitions of war to the Cuban insurgents contrary to international law. Many Americans were in favor of resenting the insult to the flag by declaring war; and vigorous correspondence over the affair was had between the United States and Spanish governments. The Virginius was finally surrendered to the United States, Dec. 16th. A demand was made that, in addition, the Spanish authorities should salute the flag, but Secretary Fish consented to waive this, if the Madrid government could establish the fact that the Virginius was not entitled to carry the Stars and Stripes. This was done to his satisfaction, and the salute was not required. The one-cent postal card was first used in this country this year.

Congress abolished the franking privilege hitherto enjoyed by congressmen. Subsequently they were authorized to send public documents free, but not letters.

A memorable financial panic, from the effects of which the country did not entirely recover for several years, occurred in the fall. A number of causes contributed to it. One of them was the heavy balance of trade against this country. In the flush of prosperity which had followed since the war, people had gotten into the way of buying articles of luxury imported from foreign countries; and the quantity of merchandise brought into the United States, from other lands, so far exceeded our exports that sixty-three millions of dollars of gold coin had to be sent out of the country to square the account. During 1872 the export of coin was sixty-eight millions of dollars. This heavy drainage made gold somewhat scarce, and caused a feeling of insecurity in business matters. A more fruitful cause of dis aster was the immense quantity of bonds issued by towns, cities, states, and corporations, in support of railroad enterprises. Instead of building with capital actually subscribed, localities along the routes were induced to assist by contribu

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tions in the form of bonds. It was an era of great activity in railroad construction. Not only were vast enterprises, like the Northern Pacific, being pressed with much vigor, but countless lesser schemes were also under way. Scarcely a State in the Union, especially in the North, escaped the fever. In the more thickly settled East the proposed roads were mostly local; in the less heavily populated West the lines were extensive. In the five years ending with 1873 the enormous sum of one billion seven hundred millions of dollars was spent in building railroads in the United States. Many mining companies, not all of them on a sound basis, were also borrowing money on bonds; and manufacturing concerns did likewise. A large part of this indebtedness was incurred abroad, especially at first. When the foreigners had taken all of these bonds that they could be induced to buy, the brokers began to place them at home. Savings-banks, trustees of estates, private investors and speculators, upon attractive representations as to the value of the schemes thus engaged in borrowing, took the securities, until finally the country was overloaded. The export of gold made financiers uneasy. Greenbacks were hoarded. stringency thus created caused increased nervousness. United States Government was appealed to, to relieve the money market by buying its own bonds, and thus throwing more paper into circulation. It did so, to the extent of fourteen millions of dollars; but the eagerness of investors to convert even Federal securities into ready money was so great that the sale had to be stopped. Before this point was reached the creditors of some of the banking houses that had most heavily invested in railroad bonds began to make demands which the banks could not meet; and several failures ensued. This precipitated a panic in September. A run was started on numerous savingsbanks. The credit system in business was abruptly suspended. Debtors were hard pressed by creditors. Investors became anxious to realize on their securities, and there was a general desire to sell. Stocks, bonds, and commercial paper rapidly depreciated. Real estate, manufactures, and all kinds of property suffered similarly. The worst part of the panic was confined to ten days, beginning Sept. 20th, during which the New York Clearing House suspended. The bankers at the metropolis then agreed to pool their greenbacks, to pay only checks certified as good through the Clearing House, and to issue ten millions of dollars in loan certificates. The savings-banks took advantage of the thirty-day notice privilege. And at length the excitement was stayed. Depreciation and stagnation followed. United States bonds suffered less than other securities, falling off only 5 or 10 per cent. Railroad stocks declined anywhere from 10 to 30 per cent, and some even 40 per cent. Factories now found themselves bothered with a surplus of unsalable products. Some of them curtailed their output by running on short time. Others suspended altogether. Thousands of workingmen were thrown out of employment, or put on reduced wages. No class of society escaped suffering. The income of

the rich was greatly diminished. They economized accordingly, especially on imported goods. Trade was dull, and the merchants could hardly make a living. The credit system was suspended. Failures occurred everywhere; and a period of financial depression and industrial prostration followed, which extended through the following year or two. From some of the shrinkage in values property never recovered.

The work of building the East River Bridge, connecting the cities of New York and Brooklyn, was commenced.

The steamship Atlantic, of the White Star line, on her passage from Liverpool to New York, while putting into Halifax for a fresh supply of coal, ran into a rock, on the 1st of April, and in a few minutes became a total wreck. Of nine hundred and fifty-seven persons on board, five hundred and thirty-five were drowned.

The steamer Wawasset, of Washington, D. C., was burned off Aquia Creek, on the 8th of August, causing a loss of seventyfive lives.

A conflagration occurred in Boston on the 30th of May, destroying property valued at thirteen hundred thousand dollars. One in Baltimore, on the 25th of July, destroyed property valued at a little over one million of dollars. On the 2d of August, a fire in Portland, Oregon, destroyed twenty-three blocks of buildings, valued, with other property lost, at one and a half millions of dollars.

1874 A prominent feature of national politics was the movement to secure, by legislation, the issue of a larger quantity of government paper currency. The Treasury notes, or "greenbacks," had been designed, at first, only as a temporary expedient, and were an outgrowth of the necessities of the war period. Their constitutionality had been seriously questioned, though afterwards affirmed by the Supreme Court. But now there was a demand that the government issue paper as a permanent peace currency. The doctrine was enunciated vigorously that intrinsic value was unnecessary in a currency. The government's fiat made it money, though the material was worthless. This inflation movement, which was stimulated by the hard times, which ran for five or six years in politics, and which led to the election of several Governors and Congressmen, was smothered at the outset by the passage of a bill this year considerably increasing the greenback circulation. This, in April, President Grant vetoed. Another law was then enacted so regulating Treasury administration as gradually to contract the currency, although it was several months before this effect was discovered.

Louisiana was the scene of a violent struggle between rival claimants of the State government. The trouble began as far back as December, 1871, when two different factions each tried to capture the legislature by unseating members of the opposite party. In January following, Federal troops had been called upon to preserve peace. Again in December, 1872, an other controvery arose as to the result of the election for gov