Summary and Analysis
Chapter XXII - Chicago
Summary
The international depression of 1893 draws attention to the issue of the gold standard in the United States. The question is whether international trade should be based on payment of balances in gold only or one that includes gold and silver, which would involve a fixed ratio of the value of the two metals. Although he still opposes fiat greenbacks, Adams alters his strict support of the gold standard and aligns with the silver backers. A trip to the Chicago World's Fair startles Henry, forcing him to recognize the enormous growth of science, specifically in the field of electricity.
Analysis
The economy captures Henry's attention for personal as well as philosophical reasons. He briefly fears facing bankruptcy at the age of fifty-five, and he questions the wisdom of the gold standard, which places too much power in bankers in Europe as well as the urban eastern portion of the United States.
As Ernest Samuels points out, speculation and financial expansion in Europe and the United States exceeded realistic limits in the early 1890s, leading to problems with excessively risky loans at The House of Baring in London. Almost immediately, investors begin to sell rather than buy. London capitalists dump American securities on the market, and gold flows out of the States to pay them. The stock market nearly collapses. Many of Henry's friends are among those in desperate financial trouble. As early as December 12, 1890, John Hay writes Adams that "a tornado of falling stocks" has diminished their wealth "by an average of ten million apiece." Henry's close friend Clarence King loses most of his fortune and takes refuge in an asylum. There is a run on banks, depositors insisting on withdrawing their money. Hoarding exacerbates the shortage of currency. More than 300 banks close by July 1893, including several in Kansas City where Henry's brother Charles has extensive interests. The gold reserve at the treasury falls to less than $100,000,000. Returning from a trip to Europe in August, Henry finds panic and despair. He soon discovers that his own conservative investments are not seriously impaired, but he suspects collusion among English capitalists, the Bank of England, the Chancellor of the Exchequer, and the Rothschild banking syndicate throughout Europe — many of his old enemies.
Henry now sides with the backers of silver — mostly Westerners, small businessmen, laborers, debtors, and farmers — who advocate an expanding economy and cheaper currency. He supports the Sherman Silver Purchase Act of 1890, which allows for increase in the coinage of silver. Gold backers (whom Henry calls gold-bugs) in the Senate seek its repeal. Despite the support for silver of Henry's friend Senator J. D. Cameron of Pennsylvania, the gold-bug interests are too influential and win the day. The Senate repeals the Silver Purchase Act. During his visit to the Chicago World's Fair, Henry envisions a new ruling class of gold capitalists who will dominate science and technology: "the capitalist system with all its necessary machinery." Henry is no socialist, but he thinks that there is too much power among those who control money.
Glossary
fin-de-siècle (French) end of century, especially the 1890s.
oblivious here, unmindful; blithely unaware.
croupiers a person in charge of a gambling table.
jobbery the carrying on of public or official business dishonestly for personal gain.
naïveté (French) the quality or state of being unaffected, simple, childlike, credulous.