The Looming Financial Chasm of 1877
As Seattle navigates a national economic crisis, editors reflect on the precarious transition from paper 'greenbacks' to gold, revealing the anxieties of a frontier town tethered to a shifting national currency.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
The State of the Union is just now laboring painfully in a 'sea of troubles,' financial and political, with anarchy staring the nation in the face. Coincident with this, we observe the inconsistent phenomenon of the national promissory notes—the greenbacks—going steadily up in credit even while the confusion in the witches' caldron of politics threatens to bubble over. Coincident with the advance in greenbacks is the decline in silver. To what extent this remarkable oscillation in the values of these two media of exchange is to be associated with the declared policy of the government to resume specie payments two years hence, it is impossible to determine with exactness. Whether, in truth, other causes are wholly responsible for the fact, the coincidence is most opportune and beneficent—for the holders of greenbacks, that is—though particularly rough on those who have been doing business all along on a specie basis. The accommodating continuation bridges beforehand the chasm of resumption so that the transition may be made with ease and convenience, averting the universal distress that would ensue in the event of an abrupt substitution of a scarcer for a cheaper and more plentiful medium. The nub of hardship in the resumption is the encouragement to immigration. When the Eastern comer can pass his money at par instead of losing 10 to 30 percent of his fortune by the discount on currency, a great drawback to the settlement of the country will be removed.
“The State of the Union is just now laboring painfully in a 'sea of troubles,' financial and political, with anarchy staring the nation in the face.”
In 1877, Seattle’s business growth was held back by the volatility of paper currency versus gold, much like how modern residents face the instability of a high-cost, hyper-competitive housing market. Then as now, Seattle looked toward national economic policy to resolve local anxieties over affordability and the 'cost of living' for newcomers.
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