History

[21forme]

It came out of nowhere, it seemed at the time.

It happened right smack in the middle of a contentious Presidential election. As the wealth of the country declined, a “white knight” secretly stepped in and offered a large temporary loan to stop the huge crisis. Since the election politics raged and no one wanted to be seen as admitting the country was so weak, the offer was turned down. The country went into the worst depression in its history.



It was 1893 and the $100 Million recovery package that J. P. Morgan (the man, not the company) offered would have stemmed the flow of gold out of the Treasury. Newly elected President Grover Cleveland thought he could reign in the problem without outside help.

The problem was the Sherman Silver Purchase Act of 1890. It had the Government buying $4.5 Million worth of silver per month at market prices. The Treasury bills paid out were then allowed to be redeemed in gold. The price of silver rose initially, but then the silver in a silver dollar sank to 75¢ in gold. In 1894 it would sink to 50¢ in gold. The gold loving Europeans loved this and raided the Treasury of its gold. By the time it dropped to $100 Million in 1893, it was too late to stop the problem. Credit tightned and the depression of 1893-1896 was the result. By 1894 2 million people were out of work. There was no support system, no government help. You lost your job and you and your family were on your own!

In 1895, the Treasury finally asked for the deal from Morgan. After furiously assembling the package again, he reported back that it could be accomplished. Now, only after a few days, the response was, “thanks but no thanks”. Morgan went to the White House. Cleveland said he wouldn’t see him. Morgan bullied his way in where there was a meeting on the crisis in progress. Morgan waited patiently in the corner quietly smoking his cigar. The Treasury said there was only $9 million in gold left. At that point Morgan stood up and said “Gentleman, I have a warrant for $10 million in gold. Do you want to deal with me now?”

The Treasury accepted a $65 Million bailout package from Morgan. Cleveland’s reputation was tarnished, Morgan made millions and the country was saved. Until 1907, that is.

[zengrifter]

Originally Posted by 21forme

It came out of nowhere, it seemed at the time.

It happened right smack in the middle of a contentious Presidential election. As the wealth of the country declined, a “white knight” secretly stepped in and offered a large temporary loan to stop the huge crisis. Since the election politics raged and no one wanted to be seen as admitting the country was so weak, the offer was turned down. The country went into the worst depression in its history.

It was 1893 and the $100 Million recovery package that J. P. Morgan (the man, not the company) offered would have stemmed the flow of gold out of the Treasury. Newly elected President Grover Cleveland thought he could reign in the problem without outside help.

The problem was the Sherman Silver Purchase Act of 1890. It had the Government buying $4.5 Million worth of silver per month at market prices. The Treasury bills paid out were then allowed to be redeemed in gold. The price of silver rose initially, but then the silver in a silver dollar sank to 75¢ in gold. In 1894 it would sink to 50¢ in gold. The gold loving Europeans loved this and raided the Treasury of its gold. By the time it dropped to $100 Million in 1893, it was too late to stop the problem. Credit tightned and the depression of 1893-1896 was the result. By 1894 2 million people were out of work. There was no support system, no government help. You lost your job and you and your family were on your own!

In 1895, the Treasury finally asked for the deal from Morgan. After furiously assembling the package again, he reported back that it could be accomplished. Now, only after a few days, the response was, “thanks but no thanks”. Morgan went to the White House. Cleveland said he wouldn’t see him. Morgan bullied his way in where there was a meeting on the crisis in progress. Morgan waited patiently in the corner quietly smoking his cigar. The Treasury said there was only $9 million in gold left. At that point Morgan stood up and said “Gentleman, I have a warrant for $10 million in gold. Do you want to deal with me now?”

The Treasury accepted a $65 Million bailout package from Morgan. Cleveland’s reputation was tarnished, Morgan made millions and the country was saved. Until 1907, that is.

...After which the Commodore, as Morgan was known by his cronies, proclaimed:
"F**k this sh*t! From now on those government c*cks*ckers can bail us out!"
...and the rest, as they say, is history. zg