The Vampire of Hard Times: Why Seattle's Banks Are Starving Its Growth
An editorial in the March 1877 *Seattle Intelligencer* blames the region’s economic stagnation not on a lack of enterprise, but on predatory lending rates that are strangling local industry.
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.
Every honest man in Seattle will admit that our greatest want at the present time is cheap money. This has long been felt, but is felt more urgently than ever. We have strong unions and courage and enterprise, possessing real estate and other capital; but who are not able to shoulder many important enterprises which might be started for great profit, simply because money accommodations are not to be had here at living rates. Money at even ten percent would meet these requirements. If plenty were to be had even at that rate, which in other localities would be esteemed exorbitant, an impetus would be given to business in every direction, and many enterprises which are now waning for the want of means to carry them through, would spring into new life, and turn out immediately profitable. Until this can be had we cannot hope for any important revival in business matters.
There is a great amount of idle capital on this coast that is seeking investment at much lower rates and at no better security than we can offer, and why some of this should not find its way here seems strange. The Chicago Journal of Commerce closes a financial article, in which it considers the causes which led to the panic of 1873, with the following, which is appropriate in this connection: "Grocers, dry goods traders, druggists, the hardware trade, and others, were not making enough to pay 8 or 10 per cent for even occasional accommodations. Manufacturers must soon close their establishments if during the dull season they must pay so high an interest for a three to six months' loan. Even real estate speculators could not make enough to pay 10 per cent for yearly loans. The crash came and all know the results. We have—since then—had bountiful crops. Health and all natural prosperity have prevailed, and yet hard times, like a vampire, have brooded over the country."
The same state of things exists, and will continue till new enterprises start, new railroads call for workers and materials, new farms are opened and old ones extended, mining revive and the furnace fires must be re-lighted. And the men who have the real estate or other capital to pledge for these results, must be able to obtain bank or individual accommodations for three, six or twelve months' loans at 5 per cent, or less, or they cannot afford to shoulder such responsibilities. In a word, the future must continue measurably as the past unless current funds can be obtained at half the interest now demanded by bankers.
In 1877, Seattle’s business leaders were already fighting the same battle against financial exclusion that defines modern housing and small business debates: the struggle to access affordable capital in a market dominated by distant or unyielding lenders. The editorial’s metaphor of hard times as a 'vampire' brooding over the country captures the visceral frustration of an economy held hostage by interest rates, a sentiment that resonates deeply with today’s discussions on credit accessibility and predatory lending.
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