The 1890s: The Ship of State Lists to Port
A series of events during the decade of the 1890s, largely unknown to the citizenry and ignored by contemporary historians, set the stage for the gradual removal of constitutional restraints that once protected our Republic. The Panic of 1893 may be seen as one of the pivotal events in that removal.
The cause of the Panic of 1893 can be traced back to the failure of the wheat crop in Argentina, coupled with a coup in Buenos Aires, in 1890. For years, financiers in the City of London — a privately run, one-square-mile area inside London, England, populated by hundreds of bankers and thousands of lawyers — found Argentina a profitable place to invest. The explosion of the country’s economy in the decades before the 1890s nearly matched the same explosion taking place in America. The only limit was capital, and City of London banks, especially the Barings Bank, were more than happy to loan the country all it needed to build infrastructure, including roads, dams, factories, schools, and office and government buildings. The bonds were secured by expected receipts from the country’s wheat crop, which was then feeding large parts of the world.
When the wheat crop failed in 1890, the bonds, and Barings, were threatened. It took a gathering of other banks and bankers, including the Bank of England and the Rothschilds, to bail Barings out, but by that time the damage was done. Financiers clipped their wings and started liquidating their investments around the world, including in America, in exchange for the most reliable currency in times of stress: gold.
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