Элиша Бенджамин Эндрюс

«История Соединенных Штатов, Том 6»

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far West. The most notable impulse to this movement was made in 1902

when Congress passed a law, the Reclamation act, providing that the

proceeds from the sales of public lands in thirteen States and three

Territories should be expended by the National Government in the

construction of irrigation works.

The total receipts from the sales of these lands amounted to $28,000,000

by the end of the year 1905, and twenty-three projects, dams,

reservoirs, or canals were in different stages of construction. The most

important of these undertakings were the Roosevelt Dam, the Shoshone

Dam, and the Truckee-Carson Canal.

Built by the U. S. Reclamation Service.

Roosevelt Dam from the road.

The Roosevelt Dam is the chief work of construction in what is called

the Salt River project. By the completion of this work at least 200,000

acres in the vicinity of Phoenix, Arizona, were reclaimed. This dam is

284 feet high, 1,080 feet long on the crest, and 165 feet thick at the

base. The resulting reservoir with a storage area of 16,320 acres will

be the largest artificially formed lake in the world. It forms a body

of water 25 miles long, almost 2 miles broad, and with a maximum depth

of 220 feet. The main canals are 119 miles in length and the lateral

canals 208 miles. Not only will this structure insure a supply of water

in the Salt River valley where, in recent years, orchards and other

products have perished, but it will prevent the floods which have

devastated that region from time to time. Water-power amounting to

25,000 horse-power has been developed by the construction. This power

is used in part for pumping, and another area, estimated at 40,000

acres, outside the territory covered by the canals has been reclaimed.

The power is also used for lighting, for manufacturing, and for mining.

It was seen that the Shoshone River, in northwestern Wyoming, during the

season of melting snows, carried away more waste water than would be

adequate to reclaim many thousands of acres in the arid regions of the

lower altitudes. Two million two hundred and fifty thousand dollars were

allotted for the construction of the Shoshone Dam which will form a

reservoir of water sufficient to irrigate 75,000 acres of land 50 miles

farther down the river.

Shoshone Dam, Wyoming.

Highest dam in the world. Height 328.4 feet.

The Truckee-Carson project provides for the irrigation of 150,000 acres

in western Nevada. The water of the Truckee River, which flows out of

Lake Tahoe, is distributed by canals having an aggregate length of 670

miles. The main canal was opened in 1905.

By the close of the year 1906, over $39,000,000 had been allotted for

works under actual construction, and this amount had increased to

$119,500,000 within four years. It has been estimated that the land thus

reclaimed will alone be worth $240,000,000. The additional cost of a

project is assessed against the land. When the land is sold, the money

received is used for the development of new irrigation areas.

Another significant plan outlined by the irrigation congress in its

meeting, 1911, provided for bringing about the complete reclamation of

all swamp and overflowed land. The swampland area of the United States

exceeds 74,500,000 acres, or an amount greater than the area of the

Philippine Islands by 1,000,000 acres.

The Mississippi basin has been called the heart and soul of the

prosperity of the United States. Two-fifths of the area of the country,

comprising one-half the population, is tributary to the Mississippi

system, which has over 20,000 miles of navigable waters. This valley

produces three-fourths of our foreign exports. The network of railroads

covering this territory has for a number of years furnished altogether

inadequate transportation facilities, and conditions have grown steadily

worse. Traffic experts throughout the United States have been advising

river improvement as a means of relieving the congestion of freight.

This situation has led to a revival of interest in the deep waterway

from the Lakes to the Gulf which has been talked and written about for

nearly three-quarters of a century.

Photograph by Clinedinst.

Shoshone Project. Wyoming Park wagon road,

showing wonderful tunnelling work on the new

wagon road from Cody, Wyo., to the

National Park via the Shoshone Dam.

[1907]

Truckee-Carson reclamation project.

Diversion dam and gates at heading of main canal.

Concerted action was not taken until 1907, when the Lakes to the Gulf

Deep Waterways Association was formed at St. Louis, having for its

object the deepening of the water-way between Lake Michigan and the

Gulf. The proposal to construct a canal by the way of the Illinois River

to the Mississippi, large enough to carry ships, was declared feasible

by government engineers and a route was surveyed. President Roosevelt

endorsed the scheme. In his message to Congress, December 3, 1907, he

said: "From the Great Lakes to the mouth of the Mississippi there should

be a deep water-way, with deep water-ways leading from it to the East

and the West. Such a water-way would practically mean the extension of

our coast line into the very heart of our country. It would be of

incalculable benefit to our people. If begun at once it can be carried

through in time appreciably to relieve the congestion of our great

freight-carrying lines of railroad. The work should be systematically

and continuously carried forward in accordance with some well-conceived

plan . . . . Moreover, the development of our water-ways involves many

other important water problems, all of which should be considered as

part of the same general scheme."

He appointed an Inland Waterways Commission which was to outline a

comprehensive scheme of development along the various lines indicated.

Their leading recommendation had to do with the proposal for a deep

water-way from Chicago to New Orleans. The completion of the drainage

canal by the city of Chicago, at a cost of $55,000,000, really created a

deep waterway for forty miles along the intended route. It was reported

to Congress by a special board of surveyors that the continuation of

such a water-way to St. Louis would cost $31,000,000.

Inland Waterways Commission.

The legislature of Illinois, following the recommendation of Governor

Charles S. Deneen, submitted to the people an amendment of the

constitution which would enable the State to assume a bonded

indebtedness of $20,000,000 for the purpose of constructing a deep

waterway from Chicago to St. Louis. The measure was approved by popular

vote November 3, 1907. Thereupon, the State Senate passed a bill

providing for the construction of the canal. This failed in the House.

It was again introduced into the legislature, 1910, but failed to pass.

Among the other important projects submitted by the Inland Waterways

Commission are the following: To connect the Great Lakes with the ocean

by a twenty-foot channel by the way of the Erie Canal and the Hudson

River, an inner channel extending from New England to Florida; to

connect the Columbia River with Puget Sound and deepen the Sacramento

and the San Joaquin Rivers, so as to bring commerce by water to

Sacramento and other interior California cities.

With the hope that New York City might again come into a mastery of the

trade with the West, as at the time when the Erie Canal was first

completed and because of the inability of the railroads to meet the

demands of traffic, the legislature of New York, in 1903, appropriated

$100,000,000 for the enlargement of that waterway and the two branch

canals, the Oswego and Champlain. The proposed uniform depth is twelve

feet and it is otherwise to be large enough for boats of a thousand ton

cargo or four times the capacity of boats now on the canal.

CHAPTER VIII

DEVELOPMENT OF THE NEW SOUTH

[1904]

The term New South signifies the transition which has taken place

through energy applied to the opportunities which that section of the

United States offers. The South has natural gifts which in themselves

will make it a marvel of wealth. The coast line measures 3,000 miles and

already the ports of New Orleans and Galveston are among the most

important on our seaboard. In 1898 the imports along the Gulf amounted

to $13,000,000, and in 1908 they amounted to $59,350,000. In 1898 the

exports were valued at $202,000,000; in 1908 they were valued at nearly

$400,000,000. The completion of the Panama Canal will certainly increase

the importance of the Southern seaboard cities.

Copyright, 1900, by Detroit Photographic Co,

The port of New Orleans.

There are in the United States navigable streams amounting to 26,410

miles and of these the South has 18,215 miles. Mr. Wilson, Secretary of

Agriculture, has estimated that the waterpower facilities of the South

equal 5,000,000 horse-power for the six high-water months--five times

the amount New England has. By a system of reservoirs this supply could

be doubled. Roughly speaking, the country can be divided into three

water-power districts: (1) the wholly undeveloped district which lies

about Birmingham, Alabama, the centre of the great iron and coal

district of the South; (2) a well-exploited district along the

Chattahoochee, extending from Atlanta to Columbus, Georgia; (3) a

district which lies in the favored agricultural region of northern South

Carolina and southern North Carolina. Here about one-third of the easily

available power has been developed. To-day New England, poor in raw

materials and having an area of only 66,000 square miles, manufactures

as much as does the whole South which is rich in raw materials and has

an area of 1,000,000 square miles. It is hardly necessary to make

forecasts--possibly it is wiser to ask what can possibly hinder the

development of this favored section.

James Wilson, Secretary of Agriculture.

In minerals and forests the South is equally rich. The coal supply,

according to the report of the National Conservation Commission, amounts

to 611,748,000,000 tons and the riches in iron in the southern

Appalachian district are equally enormous. Forty-one per cent of the

remaining forest area is in the same country. Unless a system of

conservation is put into operation, however, these vast timber resources

will pass away, for the forests are being used at a rate of more than

three and one-half times the annual growth. Private interests own

125,000,000 acres in the South and practically none of the timber is

being handled with the idea of conservation. There are no "State

forests"; neither are there adequate laws for the prevention of forest

fires.

The economic advancement of the South during the past thirty years has

been wonderful. The tide of migration within our country no longer moves

Westward as much as Southward and in its wake has followed a flood of

capital. The increase of population and capital is necessary to the

industrial growth of the South, and in spite of the recent influx the

scarcity of laborers remains a serious problem, the solution of which is

absolutely necessary for the development of the manufacturing industries

as well as agriculture. Immigrants of good standing are constantly

sought by the States, and to cope with the problem some individuals have

been guilty of operating a system of peonage. Lack of efficiency in the

laborers makes the problem still more perplexing. Scientific

investigations conducted with the aim of discovering the causes for this

general inefficiency have led to the conclusion that the eradication of

the mosquito and hook-worm will add greatly to the ability of the

wage-earners. A systematic campaign in this direction has been made

possible through the recent gift of Mr. Rockefeller.

A field of cotton.

The South has always been largely an agricultural section, with the

production of cotton as the leading interest. In 1909 the yield was

about 13,500,000 bales from about 32,000,000 acres. In value the crop

equals about twice the annual output of all the gold mines in the world.

The 8,000,000 bales which are exported annually represent an income to

the United States of about $400,000,000. The problem which has called

for the most attention is that the average output per acre has been

decreasing for years. During the past few years the white farmers have

taken active steps to remedy this weakness. Agricultural experiment

stations have conducted investigations and the agricultural press has

interpreted these results to the actual farmers and has conducted a

systematic agitation for an agricultural revolution. Associations have

been formed for the purpose of studying conditions and introducing

improved methods in preparing the soil and rotating crops. More of the

food supply of the South is to be raised at home; better homes and farm

buildings are being erected, and better machinery is being used. The

invention of a mechanical cotton picker, which has been accomplished,

should reduce materially the cost of handling the crop.

Bales of cotton ready for shipment.

Cotton-press yard, New Orleans.

Closely connected with this is the problem of roads. Where railroads are

scarce good wagon roads are all the more necessary. In the South

(excluding Kentucky, Arkansas, and Oklahoma) there are 500,000 miles of

public roads serving a population of over 20,000,000 people. In 1908

there were only 17,700 miles of improved road. To help along this work

good roads associations have been formed in the various States.

The old methods of financing the plantation system are passing. The

planters are breaking away from the credit system which has kept them as

borrowers and debtors and, as a result, they have money for investments

elsewhere. The great problems connected with cotton culture are the

labor supply and proper conservation of the soil. These solved, the

friends of the South confidently believe that thirty times as much

cotton could be produced as is produced at present. When one learns that

only 145,200,000 acres out of 612,000,000 are now under cultivation, the

claim does not seem extravagant.

Loading cotton on the levee, New Orleans.

Southern farmers have learned that other products besides cotton pay

well. Less than twenty years ago practically no hay was raised for sale

in the Gulf States. The red clover and timothy which the planter thought

could only be raised in the North are now cultivated in the South. Iowa,

the greatest hay-growing State in the Union, has for the past ten years

averaged 1.58 tons per acre at an average value of $5.45 per ton.

Mississippi during the same time has averaged 1.62 tons to the acre

valued at over $10 a ton. Alfalfa has been found to be excellent feed

for stock and the yield, which averages from four to eight tons per

acre, sells for from $10 to $18 a ton. Corn is being cultivated now and

it is not uncommon to find yields of 100 bushels to the acre and under

the most favorable circumstances even twice that much has been raised on

a single acre. The prevailing high prices make the corn crop

particularly valuable.

Stock-raising, which has never been indulged in to any extent, now gives

excellent returns. The mules which are used so extensively in the South

are being raised at home instead of being brought from the North. Beef

animals and hogs are increasing in numbers and are being bred more

carefully. The great variety of food crops which ripen in rotation make

the cost of hog-raising very little--possibly two cents a pound will

cover the cost of raising, butchering, and packing. Sheep flourish in

the pine regions where they are remarkably free from diseases. They

range all the year, needing little attention.

The Price-Campbell cotton-picking machine,

which does the work of fifty persons.

This shift in agricultural pursuits has been due in a measure to the

appearance of the boll-weevil which wrought havoc with the cotton crop

for some years. It is possible that the change has been decidedly

beneficial when one notes that the value of products in 1899 was

$705,000,000 and in 1909 about $1,430,000,000.

Agriculture is not the only interest of the New South. Northern capital

has worked wonders along industrial lines. Some communities have changed

entirely from agriculture to manufacturing. South Carolina is now second

among the States in the manufacture of cotton; North Carolina is third,

and Georgia is not far behind. In Alabama Southern tobacco is

manufactured. The steel and iron industries, the furniture industry, the

cottonseed-oil industry, and others are constantly becoming more

important. The effects of this industrial revolution are far reaching.

Social lines are shifting; a new society based upon business success and

wealth seems to be supplanting or at least breaking in upon the

aristocracy of the ante-bellum South, based upon family and public

service. The ideal of success is changing and the ambitious young man

now goes into business, manufacturing, or engineering as often as into

the profession of law and politics. The laboring class has changed also.

Years ago this class lived on farms and raised raw materials: now it

lives in the cities and fashions raw materials. The same social results

are found here as elsewhere, but on account of the conservatism and

personal independence of the Southern laborer, who is only a generation

removed from the soil, these results are not in evidence so soon. In the

manufacturing districts there is the political unrest characteristic of

the North. Labor unions develop here and Socialism has some adherents.

This tends to break the political solidarity of the section and it is

possible that in the not distant future the "Solid South" may pass away.

The South is enthusiastic; it is alert to its opportunities and it is

planning with hope for the future. Through practical education wonders

may be worked, and upon this practical education for the rising

generation the South bases its hopes. The new generation will make

greater strides in the utilization of the great natural gifts than the

old one has. The race problem will be solved in time, and the solution

must come through the efforts of the Southern people, for the best

classes now believe that the South can prosper best when all the people,

colored as well as white, are brought to the highest standard of their

efficiency.

CHAPTER IX

PRESIDENT ROOSEVELT'S SECOND TERM

[1905-1907]

On June 1, 1905, an exposition was opened at Portland, Oregon, in

commemoration of the Lewis and Clark expedition (1804-1805). Four

hundred acres of ground adjoining the principal residence district,

overlooking the Willamette River, were set aside for this purpose. There

were extensive exhibits by the United States, Great Britain, Canada,

Holland, Italy, China, and other European and Asiatic countries. The

fair was, in general, the expression of the life and history of the

Pacific Northwest and the direct relationship between that region and

the Orient. Many national congresses were held in conjunction with it,

such as the American Medical Association, National Good Roads

Association, and the National Conference of Charities and Correction.

The different interstate commerce acts, beginning with that of 1887 and

including the railroad rate bill of 1906, constitute a system of control

established by the Federal Government over persons and corporations

engaged in interstate or foreign commerce; this includes the carrying of

persons and property by either rail or water. Pipe lines, telephone,

telegraph, express, and sleeping-car companies are also brought under

the same provisions. The administration of these laws was vested in the

Interstate Commerce Commission consisting of seven members.

The Lewis and Clark Exposition, Portland, Ore.

General view across the Lagoon.

The Lewis and Clark Exposition, Portland, Ore.

The Government Buildings across the Lagoon.

The important provisions of these laws may be summarized as follows:

1. All charges must be just and reasonable. The commission was given

power to fix maximum rates after investigation of a complaint by either

party to a dispute over rates.

2. Pooling agreements were prohibited.

3. It was made unlawful to make discriminations by giving to any

particular person, corporation, or locality an unreasonable advantage

over others. Granting of passes was prohibited to other than railroad

employees, and granting of rebates was forbidden.

4. By the "long or short haul" clause it was made unlawful for a common

carrier to charge more for the transportation of passengers, or the same

kind of freight, over a shorter than a longer distance; provided the

transportation was under substantially similar circumstances and

conditions over the same line and in the same direction.

5. All rates were required to be published and posted where they might

be consulted by any person.

6. Railroad companies were forbidden to engage in other lines of business.

7. Companies engaged in interstate commerce must have a uniform system of

accounting.

8. They are required to make reports to the Interstate Commerce

Commission regularly.

This commission was also empowered to receive complaints, hear

testimony, make orders correcting abuses, or investigate conditions

without previous complaint. It was given the power to suspend the

proposed increase of rates until their justice had been determined. Any

person objecting to an order of the commission was empowered to appeal

to the "Commerce Court," which was created, being made up of five

circuit court Justices.

Copyright by Clinedinst, Washington.

Dr. Harvey W. Wiley, many years

Chief of the U. S. Bureau of Chemistry.

Nearly all of the States have passed laws relating to the purity of

goods sold to the public. Investigation showed, however, that twenty per

cent of the articles of food in common use were adulterated. This led to

the passing of a far-reaching measure by Congress, 1906, known as the

Pure Food and Drugs law. It provides against the manufacture and sale of

adulterated or misbranded foods, drugs, medicines, or liquors in the

District of Columbia, the Territories, and the insular possessions of

the United States, and prohibits the shipment of such goods from one

State to another or to a foreign country. To the Department of

Agriculture was given the power to enforce the law. Thus the public is

protected against adulterated foods and medicines and dishonest and

misleading labels, and honest manufacturers are protected against

fraudulent competition.

For a number of years some of the European countries condemned American

packing-house products. Abuses in the processes of preparing preserved

meats were brought vividly before Americans by Upton Sinclair in his

novel "The Jungle." The Department of Agriculture took up the problem

and a special investigation was ordered by President Roosevelt. The

report showed the need for more rigid inspection, and the agitation

throughout the country forced the House of Representatives, 1906,

somewhat reluctantly, to adopt the President's recommendation for a

thorough inspection, by government agents, of all processes and methods

used in the meat packing-houses.

U. S. Government inspection of a packing-house.

Inspector's assistant attaching a "Retained" tag to carcass marked by

inspector on the heading bench. Carcasses so marked are left intact

until they reach the retaining-room.

Earthquake at San Francisco, April 18, 1906.

Upheaval of sidewalk at Eighteenth and Capp Streets.

Early in the morning of April 18, 1906, San Francisco was visited by one

of the most dreadful disasters of modern times. An earthquake shock

destroyed many of the important buildings in the business part of the

city. Other cities and towns along the coast and in the Santa Clara

Valley suffered greatly and a number of the buildings of Leland Stanford

University, thirty miles south of San Francisco, were demolished. Ninety

per cent of the loss in San Francisco was due to the conflagration which

raged for two days. Fires broke out owing to the crossing of electric

wires. The water-mains were old and poorly laid and the force of the

earthquake had burst them. Firemen and soldiers fought the advance of

the flames by destroying buildings with dynamite. Not until an area

three miles in length and two miles in breadth, including all the

business and the thickly settled residential sections, had been burned

over was the advance of the flames stopped. The estimated loss of life

was 1,000, and property valued at $300,000,000 was destroyed. Among the

irreparable losses were several libraries, the collections of the

California Academy of Sciences, and many works of art. The noted

Bancroft Library with its collection of manuscripts was saved.

Burning of San Francisco following the earthquake.

Showing destruction of buildings after the

earthquake and fire in San Francisco.

A quarter of a million people were rendered homeless and were without

food and the means of earning a livelihood. The sympathy of the world

was aroused and offers of relief came from all quarters. Two million

five hundred thousand dollars was voted by Congress, and the total

relief fund amounted to $20,000,000. There was little suffering for lack

of food and water, owing to the co-operation of representatives of the

Red Cross Association, a citizens' committee, and the United States army

in distributing supplies.

Refugees in Golden Gate Park, San Francisco.

One hundred thousand persons were sheltered in tents in Golden Gate

Park. The courage and hopefulness of the people did not desert them, and

the rebuilding of the city was immediately begun. At the end of a year

one-half of the burned area had been rebuilt. The old frame and low

brick structures were replaced by modern buildings of steel and

re-enforced concrete, for this type had survived the earthquake shock.

After two years, a new San Francisco, more beautiful and more

substantial, had risen on the site of the old.

Copyright by Underwood & Underwood, N.Y.

The Jamestown Exposition--Manufactures and

Liberal Arts Building from the Auditorium.

On April 26, 1907, the Jamestown Exposition was opened. It was in

commemoration of the first English settlement in America. The southern

shore of Hampton Roads, forty miles southeast of old Jamestown, was

selected as the site for the buildings. The historic idea was uppermost

in the exposition. The colonial type of construction was dominant and

good taste and moderation were notable in the arrangement of the grounds

and exhibits. Industrial and commercial progress were emphasized. The

United States had a special exhibit to illustrate the work of the

different departments. In the harbor, one of the finest in the world,

was the greatest international naval display ever witnessed. Every

variety of war-vessel in existence was on exhibition besides commercial

and passenger boats from the great ports of the world.

CHAPTER X

THE FINANCIAL PANIC OF 1907

[1907]

Popular opinion ascribed three reasons for the panic of 1907. The first

of these was the attitude of the President toward certain great

corporations. It is true that his attacks bared some of the most deeply

rooted evils which have always been at the bottom of our

panics--dishonesty in the administration of great aggregations of

capital. Great were the lamentations and doleful the predictions of what

would happen should the President not change his policy of enforcing the

laws. The railway opponents of the President were sure the panic came

from the Hepburn Bill, which was passed early in 1906. If this had been

dangerous to the welfare of the railroads it is reasonable to assume

that foreign capital would have been withdrawn from American railways

and that American capitalists interested in railroads would have

attempted to avert financial ruin by disposing of their holdings.

Neither situation developed, for the European investors increased their

holdings and American capitalists continued to plan still greater

investments in railways.

The second general explanation was found in the unsound and reckless

banking in New York City. The dangers arising from trust companies had

been known for several years. It came to be believed that the deposits

in these trust companies were being misused by the bank officers for the

promotion of various speculating schemes. The disclosures which came

with the investigation of the insurance companies fixed these beliefs

more firmly in the minds of the people, and the first break in

confidence precipitated runs on the New York banks.

The third explanation was that the panic was due to the defects in our

American currency system.

These were the popular explanations, but there were deep-seated causes

which had worked to bring about the existing conditions. The crisis was

world-wide and was felt most in the countries where there was a gold

standard. In 1890 the world's supply of gold available for monetary use

was hardly $4,000,000,000; in 1907 it was more than $7,000,000,000.

Along with this went a rapid rise in the average price of commodities in

gold-standard countries. Bank deposits in the United States in 1907 were

three times as great as they were in 1897. Amidst all this prosperity

there were forces which were bound to bring a reaction and among the

most important of these was the demand for capital for conversion into

fixed forms. Ready capital was also lessened relatively by the great

losses experienced as a result of the Spanish-American War, the Boer

War, the Japanese-Russian War, the San Francisco earthquake, and the

Baltimore fire. These losses, which amounted to $3,000,000,000, came at

a time when the world was just entering upon a period of great

industrial activity and needed all its capital. Much capital was

absorbed in the construction of railroads, industrial plants,

development of foreign industries, etc. These conditions brought about a

tightening of money rates in Europe and American financial centres;

consequently rates of interest went up. Commercial paper which brought

three to three and one-half per cent in New York in 1897 brought seven

per cent in 1907.

The panic of 1907. Run on the Knickerbocker Trust Company,

34th Street and Fifth Avenue.

Closely allied to this movement was the increase in the number of

securities issued by industrial concerns. A few resourceful men, in

order to do away with the evils of unrestricted competition, devised a

remedy in the form of mergers. Others of less capacity but greater

daring saw opportunities for money-making, and a craze for mergers and

for the incorporation of private enterprises swept over the country. By

1907 there were at least $38,500,000,000 worth of securities in

existence. The natural result was speculation. When investors began to

fear the soundness of the securities a collapse of credit was due.

The rapid development of trust companies had its effect. The cash

reserves held by these companies were small; their investments were not

always conservative and the depositors were often suspicious. This free

expansion of business with little or no reference to cash reserve or

capital gave rise to another cause for the panic, which was not a matter

of money. It was a matter of what was in men's minds. There was a period

of "muckraking" in which leaders financial and political were severely

critcised. Whether or not this criticism was justified by the exposition

of the frauds of the insurance companies and the questionable dealings

of some other corporations need not be discussed. The criticism created

an attitude of mind throughout the nation, and the first weakening of a

bank brought on the deluge.

The panic of 1907. Uptown branch of the

Knickerbocker Trust Company, 125th Street.

To the ordinary observer the panic of 1907 will date from October 22,

when the Knickerbocker Trust Company of New York closed its doors.

Earlier in the month the Mercantile National Bank had gotten into

difficulties and had appealed to the clearing-house committee for aid,

which was given. Soon it was noted that the Knickerbocker Trust Company

was in a precarious condition, and the directors, following the example

of the other bank, appealed to the same committee. The investigation of

the committee showed the company insolvent and aid was refused. When the

facts became known, a run on the bank began and it was compelled to

close its doors. The lack of confidence in other financial institutions

was soon shown by similar runs.

No bank could stand the strain unaided. Now the Federal Government

stepped in and Secretary of the Treasury Cortelyou came in person to New

York and deposited $40,000,000 of the surplus from the United States

Treasury to be used for the aid of beleaguered institutions. For more

than a week the crowds of depositors sought their money. The lines were

not broken at night until the police hit upon the plan of giving to each

individual a ticket denoting his place in the line. The Trust Company of

America alone paid $34,000,000 across its counters and still crowds

thronged the streets. At length the enormous reserve of the Treasury was

exhausted and it became necessary to delay and deliberately to make slow

payments. Through loans made by other banks the Trust Company of America

and the Lincoln Trust Company, which had endured the hardest sieges,

were saved and now the panic entered its second stage.

The panic of 1907. Run on the Colonial Trust Company.

Line of depositors in Ann Street waiting their turn.

The country was thoroughly aroused, and to avoid a nation-wide raid upon

banking houses the bankers took radical steps. The first measure

resorted to was the enforcement of the rule requiring savings-bank

depositors, at the option of the institution, to give sixty days' notice

before withdrawing deposits. The second expedient was one which had been

resorted to during former years of financial unsteadiness. "Emergency

currency" was issued. This currency took various forms. (1) The

clearing-house loan certificates issued in denominations ranging from

$500 to $20,000, used for settling inter-bank balances; (2)

clearing-house certificates in currency dimensions to be used by banks

in paying their customers; (3) clearing-house checks which took the form

of checks drawn upon particular banks and signed by the manager of the

clearing-house; (4) cashier's checks (in opposition to the National Bank

act) secured by approved collateral; (5) New York drafts which were

cashier's checks drawn against actual balances in New York banks; (6)

negotiable certificates of deposit, and (7) pay checks payable to bearer

drawn by bank customers upon their banks in currency denominations.

These were guaranteed by the firm which issued them.

Other devices were used to aid the banks and to block the spread of the

panic by limiting cash payments by the banks. The governors of Nevada,

Oregon, and California declared legal holidays continuously for several

weeks, thereby allowing the banks to remain closed. In some places the

size of withdrawals was limited to $10 or $25 daily.

The panic was felt to a great degree on the New York Stock Exchange

because the banks refused to make loans, but this stringency was

relieved by a bankers' pool, headed by J. P. Morgan, which loaned

$25,000,000 at the prevailing rate of interest. With the strengthening

of the Stock Exchange another stage of the panic passed.

The panic of 1907. Run on the Lincoln

Trust Company, Fifth Avenue entrance.

In spite of the use of the surplus of the Treasury the banks showed a

loss of $50,000,000 in actual cash during the five weeks of the panic.

Now demands were made on foreign countries for gold. The Bank of England

made no move to block the great withdrawals of gold except to raise the

official discount to seven per cent. The flow of gold did much to stay

the ebb of confidence.

Some contended for an issue of paper money and after a long discussion

by the officials of the Treasury, it was decided to sell $50,000,000

worth of Panama two per cent bonds and $100,000,000 worth of three per

cent notes in the hope of calling from its hiding-place the money which

was being hoarded. The result of the venture was not satisfactory and

the loan operations soon ceased.

Gradually financial affairs righted themselves. The emergency currency

was redeemed, the runs on banks ceased, confidence slowly returned, and

business picked up, although by the middle of 1908 the volume was

scarcely half of what it had been a year before. The number of bank

failures had been comparatively small. Only twenty-one banks were

obliged to suspend payment, while in 1893 the number was 160.

The panic of 1907. Wall Street, in front of the Sub-Treasury Building,

when the run on the Trust Company of America was at its height.

Naturally there was much discussion concerning the defects of our

financial system, of the needs of elastic currency, of a central bank,

etc., when the Sixtieth Congress met in December, 1907. Several bills

were offered for the establishment of a central bank; some for the issue

of a special currency by the government; others for the legalization of

certificates and currency created by clearing-house associations. The

aversion of the people to the centralization of the banking business in

the hands of a few of the great money powers made the establishment of a

central bank out of the question.

The bills which were discussed at any length were the Fowler Bill, the

Vreeland Bill, and the Aldrich Bill. The first was discarded, although

it had merits, and the two branches of Congress were unable to agree

upon either of the others. The result was a compromise measure which

became the Aldrich-Vreeland Act.

The important provisions of this act are as follows: (1) Ten or more

national banking associations, each with an unimpaired capital and

surplus of not less than twenty per cent and an aggregate capital and

surplus of not less than $5,000,000, may form national currency

associations. These associations are to have power to render available,

for the basis of additional circulation, "any securities, including

commercial paper, held by a national banking association."

(2) To obtain this additional circulation, any bank belonging to a

national currency association having circulating notes outstanding

secured by United States bonds to an amount not less than forty per cent

of its capital stock, and having the required unimpaired capital and

surplus, may deposit approved securities with the currency association

and be empowered by the Secretary of the Treasury to issue additional

circulating notes to an amount not to exceed seventy-five per cent of

the cash value of the securities. If the securities are State or

municipal bonds the issue must not exceed ninety per cent of the market

value of the bonds.

(3) The banks and assets of all banks belonging to the currency

association are liable to the United States for the redemption of this

additional currency, and the association may at any time require that

additional securities be deposited. All banks are held liable to make

good the securities of any bank in the association.

The panic of 1907, Run on the State Bank,

Grand Street, New York.

(4) The total amount of circulating notes outstanding for any bank shall

not at any time exceed the amount of its unimpaired capital and surplus,

neither shall the amount of such notes in the United States exceed

$500,000,000 at any time. The amount issued in each State shall bear the

same relation to the total amount issued in the United States as the

unimpaired capital and surplus of the banks of that State bear to the

unimpaired capital and surplus of the banks of the United States.

(5) The tax on circulating notes secured by United States bonds bearing

two per cent or less shall be one-half of one per cent; if secured by

United States bonds bearing more than two per cent, the tax shall be one

per cent. If the securities are other than United States bonds, the tax

shall be at a rate of five per cent per annum for the first month and

afterward an additional tax of one per cent per annum for each month

until a tax of ten per cent per annum is reached.

(6) The redemption of the notes may take place by the banks depositing

with the Treasurer of the United States lawful money to replace the

securities deposited.

(7) The formation of a national monetary commission to inquire into and

report to Congress necessary or desirable changes in the banking and

currency laws was provided for.

CHAPTER XI

IMMIGRATION AND EMIGRATION

[1907]

Since the organization of our government nearly 29,000,000 foreigners

have come to the United States. The flow of immigration first assumed

large proportions during the decade 1831-1840 and since that time one

wave after another has reached our shores. The last one, and the one

which has caused the greatest alarm, gathered force about 1897 and

reached its full tide in the first decade of the twentieth century, when

over 8,000,000 aliens landed at our ports.

During this period (1820-1910) the character of immigration has changed.

Prior to 1880 the greater part of it came from northern Europe, but

since that time the number has constantly fallen off, and the flow from

southern Europe has greatly increased. During the decade 1871-1880

Austria-Hungary, Italy, and Russia sent only 181,000 of 2,262,000 aliens

who landed in the United States--about eight per cent. During the decade

1901-1910, 8,130,000 immigrants came to our shores, and of these

5,800,000, or over 70 per cent, were from these three countries. In 1901

Austria-Hungary sent, 113,400; in 1907 about 338,500, but owing to the

passage of the immigration law in 1907 the number fell abruptly, but by

1910 had again increased to 260,000. The same is true of Italy. In 1901

about 136,000 came; in 1907 nearly 286,000, and in 1910 about 215,500.

Russia sent 85,000 in 1901, some 260,000 in 1907, and 187,000 in 1910.

The numbers from northern Europe do not approach these. The immigration

from the British Isles does not reach the 100,000 mark; from Germany

only 30,000 come yearly.

Causes for this influx are varied. Many come desirous of owning homes, a

pleasure out of reach in their home country on account of high prices.

Free institutions attract others. A land which offers free schools to

all regardless of race or creed, religious freedom, and the opportunity

to play some part in the political life of the state is naturally

attractive. Some come to escape military service, others with the idea

of making money and returning to their native land. Density of

population and the accompanying excessive competition in the struggle

for existence also play a part.

Hundreds of letters telling of the general prosperity in America and

contrasting this with the condition at home, do their work with the

disheartened peasants. It is said that half of our immigrants come on

tickets paid for by friends in America. The large employers of labor,

and even the States themselves, are constantly calling for laborers.

Ours is a huge, half-developed country, and the development of our

resources, particularly the coal and iron industries, the cotton; rice,

cane, and tobacco industries, and the railways demands thousands of

helpers.

Emigrants bound for America.

The steamship companies which have found an extremely profitable

business in the transportation of immigrants have used various means to

increase the numbers. Agents are said to be in all European countries

soliciting trade. Associations for the assistance of poor emigrants have

been formed in various European cities--this is especially true among

the Jews who, by means of societies such as the "Hebrew Shelter" of

London, have aided thousands of Roumanian and Russian Jews on their way

to America.

Entrance to Emigrant Station or "model town" in Hamburg.

Built for emigrants waiting to sail.

Although most of the European countries have placed restrictions upon

emigration, these restrictions unfortunately do not retard the

emigration of the undesirable classes. As a result America was called

upon early to legislate on this problem. The first act was in 1819 and

was aimed to regulate the transportation of immigrants. The laws of

1875, 1882, 1891, 1893, and 1903 dealt with the class of immigrants to

be admitted. The acts did not accomplish the end for which they were

framed, and the question was taken up again by Congress which, after a

lengthy discussion, passed the act of 1907. No great change in policy

was effected by this law which, for the most part, only revised the

wording of the old laws and modified the methods of regulation. The head

tax of two dollars, hitherto levied on each alien, was doubled but was

made inapplicable to immigrants from our insular possessions or to

aliens who had resided for a year either in the British possessions in

North America, or in Cuba or Mexico. All aliens suffering from

tuberculosis or loathsome diseases or those who were "mentally or

physically defective, such mental or physical defect being of a nature

which may affect the ability . . . to earn a living," were excluded.

Children under sixteen unaccompanied by a parent were excluded.

Steamship companies were placed under additional restrictions to insure

against their violation of the act. Should an immigrant within a period

of three years be found to have entered the country contrary to the

terms of the act, he was to be deported and the transportation company

responsible for his coming would be held liable for the expense of his

deportation.

The effect of the new law can be seen in the immigration statistics--the

number of immigrants for the year 1908 is but little more than half as

great as the number for 1907. The chief decrease was in the stream from

southern Europe. This decrease cannot be attributed entirely to the act

of 1907, but must be accounted for in part by the panic of 1907.

Observations extending over a long period of years have disclosed the

fact that the ebb and flow of the tide of immigration is closely

attached to the periods of economic prosperity and depression.

When the races of northern Europe contributed the greater part of our

immigrants there was a general feeling that this was a decided advantage

to us. The people were readily assimilated into our population and were

in general intelligent, industrious citizens who soon acquired a

patriotic love for America and its institutions. The serious problems

came with the increased number of southern Europeans.

One of several churches built for emigrants of various

faiths in the station or "model town" of the

Hamburg-American Company, for use while waiting to sail.

For years Italians emigrated to South America, particularly to Brazil

and the Argentine Republic, where the climate, race customs, and

language were more to their liking than in the north. A diminution of

prosperity there has turned part of the tide northward. About eighty per

cent of our Italians come from southern Italy, a fact explained by the

difference between the industrial conditions in the northern and

southern parts of the peninsula. In the south agriculture is the only

industry, and it frequently suffers from climatic conditions, the

resulting losses bearing heavily upon the population. Conditions are

aggravated by an unequal division of taxes between the north and the

south. Often the only alternative to starvation is emigration. During

the past decade 2,000,000 Italians have come to us and, according to

estimates, about two-thirds of them have settled in the cities of the

Northern States, a condition detrimental to the foreign and our social

organization alike. These Italians, peasants and experts in fruit

culture by training, become day laborers, thus losing their greatest

productive power. The Italian who keeps away from the city finds his lot

more agreeable. Wherever they have settled as farmers they have been

uniformly successful. The person who knows only the Italian of the

tenements has little sympathy for him, in spite of the fact that many of

this race have proved themselves to be quiet, sober, and useful

citizens.

Exterior view of main building.

Restaurant. Immigrants dining-room and detention quarters.

Detained immigrants are fed here at the expense of the steamship companies.

Here all immigrants must present themselves upon arrival for their

first inspection under the law--sometimes as many as 5,000 a day.

U. S. IMMIGRANT STATION, ELLIS ISLAND, N. Y.

The Slavic immigration since 1880 has been mainly from the more

primitive districts out of touch with the civilization of western

Europe. These people have come, not as settlers, but as laborers in the

mines, factories, and foundries, planning to remain here for a time,

earn as much as possible, and return to their native land.

In 1899 statistics began to be compiled by means of which the race and

nationality of aliens might be determined. From 1899 to 1907 about

seventy-two per cent of the Slavic immigration came from

Austria-Hungary. Since 1900 at least 100,000 aliens from this country

have come to the United States each year; in 1905, 1906, and 1910 the

number exceeded 250,000 each year, and in 1907 it was 340,000. In this

crowd came Bohemians, Poles, Slovaks, Ruthenians, Slovenians, Croatians,

Bulgarians, Servians, Montenegrins, and other allied peoples. They are

distributed over various parts of the land. Pennsylvania, on account of

its mines, gathers by far the greatest number--in 1906 there were about

500,000 Slavs in the State; New York had nearly 200,000, and Illinois

about 134,000. The Bohemians and Poles seem inclined to farm, but in the

main the Slav laborers have busied themselves in the coal, coke, iron,

and steel industries. Very seldom do the Slavs take to petty street

traffic, as do the Jews and Italians, but prefer the harder and better

paid work in the mines and foundries.

The Russians make the smallest Slavic group in America. Although many

Russians are reported among the immigrants, only about five per cent are

native born Russians, the rest being Jews, Poles, Finns, and

Lithuanians.

About one-eighth of our European immigrants are Jews. By the law of 1769

the Jews in Russia are compelled to live within certain territorial

limits known as the Jewish Pale, and about ninety-four per cent comply

with the regulation. The law of 1882 has further restricted the places

of residence, for Jews are now prohibited from buying or renting lands

outside the limits of the cities or incorporated towns. Their

educational advantages are limited by law; few are admitted to the bar

and few to the other learned professions. To these disabilities the

Russian government has added the terror of persecution, which will

explain why 150,000 Jews come to America each year. In all there are

1,250,000 here.

"ALIEN PASSENGERS" AND IMMIGRANTS ENTERING THE UNITED STATES FROM

EUROPEAN COUNTRIES, 1820-1910

Last Permanent Residence

1820-30

1831-30

1841-50

1851-60

1861-70

1871-80

1881-90

1891-1900

1901-1910

Total

Austria-Hungary

7,800 72,969 353,717 597,047 2,145,266 3,176,801

Belgium 27 22 5,074 4,738 6,734 7,221 20,177 20,062 41,635 105,690

Denmark 169 1,063 539 3,749 17,094 31,771 88,132 52,670 65,285 260,472

France 8,497 45,575 77,262 76,358 35,984 72,206 50,464 36,006 73,379 475,731

Germany 6,761 152,454 434,626 951,667 787,468 718,182 1,452,970 543,922 341,498 5,389,548

Greece

15,996 167,519 183,515

Italy 408 2,253 1,870 9,231 11,728 55,759 307,309 655,694 2,045,877 3,090,129

Netherlands 1,078 1,412 8,251 10,789 9,102 16,541 53,701 31,816 48,262 180,952

Norway, Sweden 91 1,201 13,903 20,931 109,298 211,245 568,362 95,264 190,505 1,691,013

Sweden

230,679 249,534

Russia 91 646 656 1,621 4,536 52,254 265,088 593,703 1,597,306 2,515,901

Spain, Portugal 2,622 2,954 2,759 10,353 8,493 9,893 6,535 6,723 27,935 170,426

Portugal

23,010 69,149

Switzerland 3,226 4,821 4,644 25,011 23,286 28,293 81,988 33,149 34,922 239,340

England 22,167 73,143 263,332 385,643 568,128 460,479 657,488 271,094 388,017 3,089,491

Scotland 2,912 2,667 3,712 38,331 38,768 87,564 149,869 60,053 120,469 504,345

Ireland 50,724 207,381 780,719 914,119 435,778 436,871 655,482 403,496 339,065 4,223,635

Wales

11,186 17,464 28,650

Europe; unspecified 43 96 155 116 210 656 10,318 4,370 1,719

Total 98,816 495,688 1,597,502 2,452,657 2,064,407 2,261,904 4,721,602 3,703,061 8,136,016 25,531,653

Immigrants from British North America and other countries 2,535,810

Estimated number of immigrants prior to October 1, 1819 250,000

[Transcriber's note: Norway/Sweden and Spain/Portugal are combined totals in

columns where only one value is given.]

TOTAL NUMBER OF IMMIGRANTS, 1891 TO 1910

Sex Age

Year Ending

June 30

Total

Number

Male

Female

Under 14

14 to 45

45 and Over

1891 560,319 354,059 296,200 95,879 405,843 58,597

1892 623,084 385,781 237,303 89,167 491,839 42,078

1893 502,917 315,845 187,072 57,392 419,701 25,824

1894 314,467 186,247 128,220 41,755 258,162 14,550

1895 279,948 159,924 120,024 33,289 233,543 13,116

1896 343,267 212,466 130,801 52,741 254,519 36,007

1897 230,832 135,107 95,725 38,627 165,181 27,024

1898 229,299 135,775 93,524 38,267 164,905 26,127

1899 311,715 195,277 116,438 43,983 248,187 19,545

1900 448,572 304,148 144,424 54,624 370,382 23,566

1901 487,918 331,055 156,863 62,562 396,516 28,840

1902 648,743 466,369 182,374 74,063 539,254 35,426

1903 857,046 613,146 243,900 102,431 714,053 40,562

1904 812,870 549,100 263,770 109,150 657,155 46,565

1905 1,026,499 724,914 301,585 114,668 855,419 56,412

1906 1,100,735 764,463 336,272 136,273 913,955 50,507

1907 1,285,349 927,976 355,373 138,344 1,100,771 46,234

1908 782,870 506,912 275,958 112,148 630,671 40,051

1909 751,786 519,969 231,817 88,393 624,876 38,517

1910 1,041.570 736,038 305,532 120,509 868,310 52,751

Year

Debarred from

Landing

Returned

Within

One Year

Returned

Within

Three Years Able to Read

but not Wruite

[See note 1]

Unable to

read or Write

[See note 1]

1892 2,164 637

1893 1,053 577

59,582 61,038

1894 2,389 417

16,784 41,614

1895 2,394 189

2,612 42,302

1896 2,799 238

5,066 78,130

1897 1,617 263

1,572 43,008

1898 3,030 199

1,416 43,057

1899 3,798 263

1,022 60,446

1900 4,246 356

2,097 93,576

1901 3,516 363

3,058 117,587

1902 4,974 465

2,917 162,188

1903 8,769 547

3,341 185,667

1904 7,994 300 473 3,953 168,903

1905 11,879 98 747 8,209 230,882

1906 12,371 61 615 4,755 265,068

1907 13,064 70 925 5,829 337,573

1908 10,902 114 1,955 2,310 172,293

1909 10,411 58 2,066 2,431 191,049

1910 24,270 23 2,672 4,571 253,569

Note 1: Prior to 1895 the figures are for persons over 16 years; from

1895 to 1910 for persons 14 years of age and over.

The question of Oriental immigration has caused much comment in our

Pacific Coast States for several years. Before 1900 the total number of

Japanese coming to America seldom reached 1,500 a year. Since that time

about 12,000 have come each year, except in 1903 when 20,000 came and

1907 when the number reached 30,000. Seventy per cent of this number,

however, went to Hawaii. Over-population and economic depression in

their native land have caused this exodus. Most of these immigrants are

laborers--skilful, energetic and efficient--who apparently desire to

become citizens. Among the better classes are many who have attained

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