When Petaluma’s press took on ‘utter crisis’ in D.C.

The drastic malfunction of the U.S. Government of 144 years ago was strangely similar to our current times. Ulysses S. Grant, the president at the time, was blamed for his lack of guidance. The Cabinet members were blamed for inexperience.

Congress was labeled inept, and the two parties despised each other. The term “fraud” was floating about. The economy was a mess and nothing was getting done. The world was watching, and it wasn’t “fake news,” either.

Dubbed “the long depression,” the financial panic of 1873 occurred during reconstruction efforts following the Civil War and started a down-turn in the world economy that lasted for six years.

The most immediate shock was the collapse of the Vienna Stock Exchange in May. Following that, stocks all over the world plunged and banks started failing by the dozens. Long lasting woe was felt in California and Petaluma. Our town of 5,000 had been thriving, but as real estate values plunged, Sonoma County ranchers felt vulnerable and that year formed granges for mutual protection.

The United States, in an effort to stop the plunge, tightened it’s monetary policies and that included switching from the silver standard back to the gold standard that had been in effect from before the Civil War. This meant taking money out of circulation, and the price of silver began to nose dive.

The western states of Nevada and Colorado were outraged, because they were huge silver producers. The Comstock Lode in Virginia City, Nevada, was the richest mine in the world. The population of Virginia City had soared to over 20,000 and their famous columnist, Samuel Clemens (aka Mark Twain) of the Territorial Enterprise Newspaper, was one of those up-in-arms over the silver mines being shut and the “stupidity in Washington.”

To compound the issue, there was a lack of gold as well. Even though the 1849 Gold Rush in California had added to the nation’s coffers, much of that gold had been spent by President Abraham Lincoln in winning the Civil War.

The Evening Argus in Petaluma endorsed the “adoption of a national paper money standard, instead of gold or silver.” This was not a popular theme in adjoining Nevada, and it was out of sync with the national mood as well. About the business downturn, the Argus stated: “We have the greatest faith in the future prosperity of our city.”

That July 4th, the celebration in Petaluma, was said to be “the most pleasant and enjoyable in memory.” However, to compound the economic woes of Petaluma, a major fire occurred here that year, which completely destroyed the U.S. Bakery, the American Livery Stable and the Blue Wing Saloon. It was to be years before the city’s income was back in stride.

One of the big contributing factors to the 1873 downturn was the rampant fraud in the building of the Union Pacific Railway. Both the Union Pacific and the Northern Pacific railroad lines were central to the collapse of our nation’s financial system.

There was fraud in most every corner, including within the cabinet of President Ulysses S. Grant. Half of its members were thought to be “utterly inexperienced and discredited.” One of them was even said to be disgraced. President Grant had soon found that running our country was a far more complicated task than being a general in the Civil War.

Grant had never served in public office, but had promised to “completely clean house” (i.e. “drain the swamp”), but it didn’t happen. As unemployment shot up to 8.2 percent, our Weekly Argus editor used such terms as: “vile corruption,” “political ring,” “evil monopolies” and “utter crisis” to describe the situation in Washington.

Stock prices fell by an average of 25 percent, and hardest hit were the railroads, construction and manufacturing. Since 1867, the many miles of railroad in the U.S. had grown over 50 percent, and that accounted for 20 percent of the capital investment in our entire national economy. As the world economies of the U.S., France, Germany and Great Britain began to be over-protective of their shores and as production declined, tariffs were raised to restrict imports.

In Petaluma and the west coast, fingers of blame were pointed toward “The Chinese Question,” an immigration hot potato of the times. Our Evening Argus pointed out that: “The influx of laborers (was) beginning to disturb our industrial and social interests.” They continued by saying, this, “threatens to overwhelm the country.”

Feeling the pinch of depression was obviously causing the displacement of blame, and California, to it’s great detriment, was casting aspersions aplenty on Chinese immigration as a main cause of our nation’s woe. San Francisco, in a harassment move, passed a law against “Chinese firecrackers and ceremonial gongs,” and even placed an unwieldy high tax on Chinese laundries. It was widely suggested that we “send the Coolies back to China,” and block ships arriving from Asia. (Kind of like building a wall.)

A side note to the depression news and Washington disconnect was the 1873 conviction in a New York court of temperance campaigner, Susan B. Anthony for “illegal female voting.” In Petaluma, it was heralded that our much respected attorney and school master, Professor Lippitt, “in speaking here at the annual Temperance Alliance meeting, made some appropriate remarks,” about Ms. Anthony and the country’s overlooking the importance of half of our constituency. Prof. Lippitt had that year sold his home in the 600 block of D Street to our Board of Education for Petaluma’s first high school, and opened a new law office.

Shamefully, it would take decades for the Temperance Union to really make national progress toward giving women the right to vote, and in 1873 the national attention was mostly on the mess made in Washington, D.C., created by an inexperienced president and his inadequate cabinet. Sadly, some things never change.

(Historian Skip Sommer is an Honorary Life Member of Heritage Homes and the Petaluma Historical Museum. Contact him at skipsommer@hotmail.com.)