LOW WATER
i
Well, the United States Treasury did not hang out the bankrupt’s
sign. What happened instead was that President Cleveland in his
solitary strength met a mad crisis in a great way. He engaged a group
of international bankers to import gold from Europe and paid them
for it in government bonds. The terms were hard, but the government,
owing to the fascinated stupidity of Congress, was in a helpless
plight. What Cleveland had the courage to face was the fact that
any terms were better than none. It was fundamentally a question of
psychology. The spell had somehow to be broken. The richest and most
resourceful country in the world was about to commit financial suicide
for a fetich. All that was necessary to save it was to restore the
notion,--merely the notion,--of gold solvency. People really did not
want gold to hoard or keep. They wanted only to think they could get it
if they did want it.
The news of the President’s transaction with the bankers, appearing
in the morning papers, produced a profound sensation. The white money
people denounced him with a fury that was indecent. Many men of his
own political faith turned against him, thinking he had destroyed their
party. Congress was amazed. There was talk of impeachment proceedings.
Popular indignation was extreme and unreasoning. The White House had
sold out the country to Wall Street. Mankind was about to be crucified
upon a cross of gold. The principle of evil had at last prevailed.
Thus people reacted emotionally to an event which marked the beginning
of a return of sanity. Upon the verities of the case the effect of
Cleveland’s act was positive. While the nation raved the malady itself
began to yield. That ophidian monster which was devouring the gold
reserve began to disintegrate from the tail upward. Presently only
the head was left and that disappeared with the arrival of the first
consignment of gold from Europe under the government’s contract with
the bankers.
The full cure of course was not immediate. But never again were people
altogether mad. As the tide reverses its movement invisibly, with many
apparent self-contradictions in the surf line on the sand, so it is
with the course of events. Between the tail of the ebb and the first of
the flood there is a time of slack with no tendency at all. That also
is true in the rhythm of human activities.
ii
Historically it is noted that a stake set in the wet sand on the
morning after the Great Midwestern’s confession of insolvency would
have indicated the extreme low water mark of that strange ebb tide in
the economic affairs of this country the unnatural extent and duration
of which was owing to the moon of a complex delusion. There was first a
time of slack before the flood began to run,--a time of mixed omens, of
alternating hope and doubt. Yet all the time unawares the country grew
richer because people worked hard, consumed less than they produced and
stored the surplus in the form of capital until the reservoirs were
ready to overflow.
As for the Great Midwestern, everything came to pass as Galt predicted.
Valentine was appointed by the court to work the railroad as receiver.
In that rôle he returned to his desk. The word “president” was erased
from the glass door of his office; the word “receiver” was painted
there instead. That was the only visible sign of the changed status. We
paid our way with receiver’s certificates, issued under the direction
of the court. Dust settled in the Board Room, where formerly the
directors met. Trains continued to move as before.