numerous failures on the business
situation was the derangement which occurred in the currency supply. The
circulating medium was almost wholly composed of bank notes, treasury
notes, and treasury certificates issued against gold and silver in the
Treasury, coin being little in use except as fractional currency. Bank
notes were essentially treasury certificates issued upon deposits of
government bonds. In effect, the circulating medium was composed of
government securities reduced to handy bits. Usually, a bank panic tends
to bring note issues into rapid circulation for what they will fetch,
but in this new situation, people preferred to impound the notes, which
they knew to be good whatever happened so long as the Government
held out. Private hoarding became so general that currency tended to
disappear. Between September 30, 1892 and October 31, 1893, the amount
of deposits in the national banks shrank over $496,000,000. Trade was
reduced to making use of the methods of primitive barter, though the
emergency was met to some extent by the use of checks and clearinghouse
certificates. In many New England manufacturing towns, for example,
checks for use in trade were drawn in denominations from one dollar
up to twenty. In some cases, corporations paid off their employees in
checks drawn on their own treasurers which served as local currency. In
some Southern cities, clearing-house certificates in small denominations
were issued for general circulation--in Birmingham, Alabama, for sums as
small as twenty-five cents. It is worth noting that a premium was
paid as readily for notes as for gold; indeed, the New York "Financial
Chronicle" reported that the premium on currency was from two to three
per cent, while the premium on gold was only one and one half per cent.
Before the panic had ended, the extraordinary spectacle was presented of
gold coins serving as a medium of trade because treasury notes and bank
notes were still hoarded. These peculiarities of the situation had a
deep effect upon the popular attitude towards the measures recommended
by the Administration.

While this devastating panic was raging over all the country, President
Cleveland was beset by troubles that were both public and personal. He
was under heavy pressure from the office seekers. They came singly or in
groups and under the escort of Congressmen, some of whom performed such
service several times a day. The situation became so intolerable that
on t