Democracy in Desperation: The Depression of 1893 (Contributions in Economics and Economic History) [Hardcover]

Douglas Steeples (Author), David O. Whitten (Author)

Book Description

ISBN-10: 0313279438 | ISBN-13: 978-0313279430 | Publication Date: September 30, 1998

The Panic of 1893 and the depression it triggered mark one of the decisive crises in American history. Devastating broad sections of the country like a tidal wave, the depression forced the nation to change its way of life and altered the pattern and pace of national development ever after. The depression served as the setting for the transformation from an agricultural to an industrial society, exposed grave economic and social problems, sharply tested the country's resourcefulness, reshaped popular thought, and changed the direction of foreign policy. It was a crucible in which the elements of the modern United States were clarified and refined. Yet no study to date has examined the depression in its entirety. This is the first book to treat these disparate matters in detail, and to trace and interpret the business contraction of the 1890s in the context of national economic, political, and social development. Steeples and Whitten first explain the origins of the depression, measure its course, and interpret the business recovery, giving full coverage to structural changes in the economy; namely, the growing importance of manufacturing, emergence of new industries, consolidation of business, and increasing importance of finance capitalism. The remainder of the book examines the depression's impact on society--discussing, for example, unemployment, birth rate, health, and education--and on American culture, politics and international relations. Placing the business collapse at the center of the scene, the book shows how the depression was a catalyst for ushering in a more "modern" America.

Editorial Reviews

Review

“Steeples and Whitten, each an experienced scholar and author, have written a superb history of the 1890s. This is a work for all who are interested in the American past and future, not just economic history. Economic historians may relish the statistics and superb bibliography more than other readers, but labor and social historians will find much to interest them.”–Choice

“[The authors] have written a new examination of the 'Panic of 1893' and the five year depression it triggered. Today's softening worldwide markets have created interest in this major market contraction, and the authors achieve success with their attempt to trace and interpret its history in the context of national development....This is a scholarly work relevant for historians and economists; highly recommended for academic libraries.”–Library Journal

“[They] have used in a most effective way material drawn from a wide variety of sources to present a lucid account of the meaning of the economic, social, political, and cultural experience of the American people during a period of adversity. They have placed their account within the framework of the significant structural shifts that were taking place in the American economy in the last decade of the nineteenth century...”–Labor History

“This work provides a good overview of the depression and confirms for the reader that the decade of the 1890s was a "divide, however gentle, between a passing agragarian America and an emerging industrial power."”–Business Library Review

“This book on the depression of the 1890's by Douglas Steeples and David O. Whitten presents a well-written narrative of the events of the depression and the effects of the depression on some aspects of the economy and government policy.”–EH:NET:Economic History Network

“[P]resents a well-written narrative of the events of the depression and the effects of the depression on some aspects of the economy and government policy.”–H-Net Reviews

“Everything is neat, comartmentalized, and free from the narrative sweep that a chronology might afford. This is a book for someone who wants the facts- with as little drama or philosophical musing as possible- and, convienently, endnotes at the close of each chapter.”–The Journal of American History

“...the study hangs together well....Steeples and Whitten have in fact produced an intelligent synthesis that rises above that variety of academic partisanship once denigrated in some scholarly circles as the frame of reference of the "Harvard Business School"....This is an impressive study and a significant contribution to our understanding of a vital.”–The Historian

“Professors Steeples and Whitten provide a much-needed examination of arguably the worst depression in American history, those five-troubled years of 1890's that began with the Panic of May 1893. They effectively demonstrate that hard times created a watershed in the American chronicle. This is informative reading for anyone interested in American history. The research is impressive and the style engaging.”–H. Roger Grant Professor and Chair, Department of History Clemson University,

“Advocate for American Enterprise is, in many respects, a rare book. Although written primarily for a scholarly audience whose interest in American development determines the success or failure of any such manuscript, the work can and will appeal to the general American public not so much because of William Dana himself, but rather because the author, Douglas Steeples, has done an outstanding job in presenting this nineteenth century businessman as a living, breathing and very opinionated individual. Not only does Steeples have a gift for writing, but he is particularly good at choosing words that convey not only the message he wants the reader to get, but also the feeling he as the author has in conveying that message. There is no doubt in this reviewer's mind that Advocates for American Enteprise will definitely make its presence felt within the American scholarly community as well as on the general American reading public upon its release.”–Michael V. Namorato Department of History University of Mississippi

About the Author

DOUGLAS STEEPLES is Dean, College of Liberal Arts, and Professor of History at Mercer University.

DAVID O. WHITTEN is Professor of Economics at Auburn University.

Product Details

• Hardcover: 280 pages
• Publisher: Greenwood Press (September 30, 1998)
• Language: English
• ISBN-10: 0313279438
• ISBN-13: 978-0313279430
• Product Dimensions: 9.5 x 6.5 x 1.1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #2,473,326 in Books (See Top 100 in Books)

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3 of 4 people found the following review helpful:

4.0 out of 5 stars A challenging but worthwhile study, October 30, 2009

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B. R. Morris (USA) - See all my reviews

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This review is from: Democracy in Desperation: The Depression of 1893 (Contributions in Economics and Economic History) (Hardcover)

I found Douglas Steeples and David O. Whitten book, "Democracy in Desperation," delightfully informative. Steeples and Whiten offer a "nuts and bolts" approach to understanding this remarkably important period. At the writing of this book, Dr. Douglas Steeples is "dean of the college of liberal arts and professor of history at Mercer University" (end page). Dr. David O. Whitten "is a professor of economics at Auburn University" (end page). Both men have written several articles and books.
Douglas Steeples and David O. Whitten argue that the Depression of 1893 is a major demarcation point in American history. Steeples and Whiten recount Frenchman Clement Juglar's 1892 published study of business cycles and his conclusion that panics and depressions are not aberrations but integral parts of industrial society. The authors also cite Joseph A. Schumpter's 1939 study, wherein Schumpter states the Panic of 1893 reflected new technology maximally exploited. According to Schumpter's thesis, the new technologies that were maximally exploited in the 1890s were railroads and agriculture.
By the 1890s, railroads had built beyond what the market could bear, and they began to fail. Accordingly, as the market corrected, all subsidiary industries also suffered. Schumpter, according to the authors, also points out farmers, with new the advent of labor saving agricultural machines, were similarly suffering. Steeples and Whiten build on the arguments made by Juglar and Schumpter. Steeples and Whiten show that the Panic of 1893 was very significant. It was, in the words of Frederick Jackson Turner - whom they cite, the closing of `"the first period of American history"' (p. 6). In the U.S., the Panic of 1893 was different from all similar market corrections there-to-fore. Industrial recessions prior to 1893 had impacted a minority of workers in the U.S. Because the U.S. had industrialized, the 1893 depression hurt more people than ever before. By 1893, for the first time in U.S. history, there were as many, if not more, industrial workers as there were farmers.
The authors explain 19th century banking structure and how it operated without a Federal Reserve System. They say short term capital frequently found its way from rural America to the New York Stock Exchange where it was invested until needed by the depositor. Rural banks sent money to regional city banks, these city banks sent money to New York banks, these NY banks, in turn, sent money to a few really large banks (the authors do not reveal which ones). The authors explain that this is called "pyramiding" and a natural circumstance of 19th century banking process. When the money was needed, the whole process worked in reverse. What worked for small scale demands did not work when there were large scale demands. Bankers naturally sought to sell stock before its market value sank below the value of the deposit, but more selling drove down the price of stock and provoked even more selling. Too many calls for money caused the market to collapse. This was occurring in the 1890s. Operating capital for business evaporated. The role of government in banking was tenuous as was the role of government in relief: "was it constitutional to be involved?" - this was a matter that was yet to be worked out. The Federal Reserve Act of 1913, a reform stemming from the 1893 depression, was a tenuous start towards banking reform.
To me, this book was very challenging, because it is an economic history. For instance, I read the following: "The proceeds were transferred to London even though call money and 60-90 day choice two-name paper there were ' and ' to ' , as against 1' and 2 ¾ to 3 percent in New York" (p. 177). I checked the internet for a definition of "two-name paper", and I am now completely satisfied that I still do not completely understand what the authors are saying. On several occasions I had to address outside references to gain complete understanding of the text, but the instance I cited above was the most troublesome. Never-the-less, I believe book was worth every minute I spent reading it.
Reading this book helped me realize that the "Great White Fleet" was built not merely on the argument presented by Mahan. While Mahan's argument was entirely persuasive to many who had the power to act, it was, more importantly, built contiguous with solutions to problems relating to the Depression of 1893 and to diplomatic issues arising with Brazil, Great Britain, Nicaragua, and Venezuela during the 1890s. Furthermore, it provided me with a glimpse of a U.S. foreign policy in Latin America that was more benevolent and contrasting starkly with Teddy Roosevelt's later "gun-boat diplomacy" with which I am more familiar.
Steeples and Whitten make use of substantial footnotes. These are excellently presented at the end of each chapter where they do not intrude on the narrative text but remain easily accessible. The author's bibliography includes both secondary and primary sources. Many of the primary sources are government reports and statistics which the authors readily cite in their narrative.
I found this book quite substantive and very worthwhile. I highly recommend this book to any one who wishes to better understand what was happening in the U.S. during the 1890s.