Interview: Bruce Ramsey on “Panic of 1893” in Washington state, with reflections on trade, tariff today
By Wen Liu July 16, 2018
If you had read the Seattle Times over the years, you knew Bruce Ramsey, long-time columnist and editorial board member before his retirement a few years ago. His columns were different in that he knew Washington state, especially its history and how history related to whatever business or legislative issue of the day he was writing about. And he knew China, as he also lived in Hong Kong and worked as a senior writer at Asiaweek. (Full disclosure: Bruce also edited my two books on Washington state and China.) But Bruce didn’t really retire from writing, as it is his work in retirement we are celebrating today: “The Panic of 1893: The Untold Story of Washington State’s First Depression.” Why did he write this book? What can we learn from the Panic of 1893? Here is Bruce Ramsey answering those questions and more.
WCWD: First of all, why did you decide or what inspired you to write this book, The Panic of 1893: The Untold Story of Washington State’s First Depression? I did notice that back in 2012 you reviewed a book titled A Nation of Deadbeats by Scott Reynolds Nelson, who compared 2008 Great Recession with Panic of 1893. Back a little further, in 2007, you also reviewed the book Washington State by Robert Ficken that included events in 1890s.
Bruce Ramsey: My parents were married in March 1933, in the week President Roosevelt gave his “nothing to fear but fear itself” speech and closed all the banks. Years later my dad would tell me about those years, how hard they were, about busted banks and teachers paid in IOUs. But that was the Thirties; for a long time the depression of the 1890s was a blank in my mind. Then I read a 1922 novel called The Driver by Garet Garrett, a writer I wrote a biography of. The novel begins with a vivid description of Coxey’s Army, which was a march on Washington, D.C., by the unemployed. That made me think the political drama of the 1890s could be interesting today.
And yes, in 2007, I reviewed Robert Ficken’s Washington State for the Seattle Times. The book is a history of the whole state in the 1890s. Ficken has one chapter on the depression of the 1890s in Washington, and how it hit this state especially hard. One chapter was enough to whet my appetite, to make me think, “There’s a story here — and you’ve got only a sketch of it.” No other book had any of it. I would go and get that story. That would be my retirement project. And that’s this book.
I spent four years researching it almost every day, going to libraries, courthouses, several offices of the Washington State Archives and twice to the National Archives in College Park, Maryland. And as I dug into the material, I found connections to the Washington of today — how the four years of hardship of 120 years ago shaped the state. You can read more about it on my website.
WCWD: So Washington Territory became the State of Washington in 1889 as the 42nd state to join the Union. It was a new state, you said, when the Panic came in four years. Could you tell us what main industries were there then in Washington, if there was any international trade going on, and if all were affected, or shut down, during the Panic?
Bruce Ramsey: The main industries to bring in revenue from outside the state were lumber and shingles from Western Washington and wheat from Eastern Washington. By 1893, common lumber was mostly going to California. Shingles and specialty lumber had begun to go east by rail and the wheat was going to England on sailing ships, around the Horn. Other than that, the big industry in Washington was developing new towns and upgrading older ones — platting towns, selling building lots, grading streets, putting up buildings, factories, streetcar lines, schools, water and electric utilities, telephones — and laying railroads to connect it all to the East. The development work was funded by outside capital and bank credit, some of it from across the Atlantic — and that flow of money stopped cold in the Panic of 1893.
During the ensuing depression, the price of wheat, flour and lumber fell to drastic lows, and businessmen reached out to international markets — Chile, Australia, Britain, Japan and China. This state’s international trade grew during the depression. (It didn’t in the depression of the 1930s, but it did in the 1890s.) Seattle got its first scheduled steamship service with Asia in the depression year 1896.
WCWD: In one of your chapters, “The Caustic (1893-1894),” you talked about anti-Chinese riots and rhetoric in Washington and the Northwest. The Chinese Exclusion Act was 1882, which banned all immigration of Chinese laborers for 10 years, and then it was renewed in 1892. So would you say that when the Panic of 1893 made life hard for everyone, it had to make the life of the Chinese community even harder?
Bruce Ramsey: It made the lives of every group harder. In some cases, Chinese had been doing work the whites didn’t want to do. When whites lost their work, many thought they had a bumping privilege to push aside others to take the remaining jobs.
There are several stories about the Chinese in my book, but they are all from majority — that is, white — newspapers. The newspapers of the 1890s didn’t talk to the Chinese. They talked about the Chinese, sometimes in a nasty way, sometimes in a matter-of-fact way and occasionally in a friendly way, but always from the majority point of view. You have to imagine the Chinese view.
It’s not that difficult. For example, the Chinese are criticized for undercutting white workers. The white workers are picking hops for one price and the farmers hire Chinese at 20 percent less. Nobody asks the Chinese why they’re willing to work for less, but it’s obvious enough. They need the work. They don’t prefer to work for less. They prefer to work rather than be idle. Self-reliance was a strong value among most people then, and particularly among Asians.
One point about the Chinese that comes through is that they aren’t begging the public for help. On page 90 I quote a Spokane newspaper from 1894: “Nobody in Spokane ever saw a Chinaman begging bread or arrested for vagrancy.” A year later the Spokane paper reported the first one, a vagrant they called Hune Bow. But he was “the exception that proves the rule” that Chinese don’t take alms.
In the newspapers of the 1930s, I read that the Chinese workers in Seattle were not much affected by bank failures because they didn’t put their savings in banks. Chinese were more likely to be net savers than the whites, but they kept their life savings with Chinese merchants. That was probably even more the case in the 1890s. Chinese workers with money saved could have had an easier time than whites who were net borrowers or had all their money tied up in failed banks.
Still, life could be tough for the Chinese. They were a minority, and were treated as foreigners.
WCWD: In the chapter “Endurance (1896),” you talked about a Japanese ship, Miiki Maru, docking in Seattle, as Seattle’s first scheduled steamship service to Asia. More importantly, you said that Seattle’s Chinese merchants welcomed it, even though China had just lost a war to Japan a year before, in 1895. Could you elaborate a little on this Washington-Japan trade event and the Chinese community’s position on it?
Bruce Ramsey: Again, I don’t have contemporary Chinese sources, so I can’t elaborate much. But clearly, we know that Chinese merchants brought in imports from Asia — silk, ceramics, furniture, Chinese medicine, spices, tea, etc. They needed a shipping service that they could rely on and plan their business around — scheduled service. Tacoma already had that, but dealing through Tacoma was no doubt distasteful because of Tacoma’s racism, and also inconvenient, because in 1896, only three Chinese had been allowed to live there.
The Chinese in Washington were well aware of China’s war with Japan. I remember seeing a newspaper story about young Chinese Americans preparing to go to China to fight for the mother country. No doubt the Chinese here would have preferred a Chinese steamship service to Japanese service, but the only other choice at the time was no service. The Chinese merchants were practical enough to accept what was available.
WCWD: In the Wikipedia entry of “Panic of 1893,” a partial cause mentioned was the Sherman Silver Purchase Act of 1890. Another partial but notable cause, however, was called McKinley Tariff passed also in 1890, which increased average duties across all imports into the U.S. from 38% to 49.5%. Did you look at those tariffs, and do you think, even remotely, that there is any lesson from the Panic of 1893 to be learned or reflected today, especially at the start of U.S. trade and tariff wars with China and other countries?
Bruce Ramsey: The McKinley Tariff had been put through in the administration of Republican President Benjamin Harrison. Then the Democrats took power, and their newspapers blamed the Republicans’ high tariffs for creating a crisis. Having either a 38% or a 49.5% tariff must have been bad for commerce, but I didn’t read of any business owners, trade groups, bankers or economists blaming the Panic on the tariff. They blamed the Sherman Silver Purchase Act. The bankers of Seattle and Tacoma all said, “Get rid of the Sherman Silver Purchase Act.” In my book I explain that the Silver Purchase Act set up a foreign run on the U.S. Treasury, which triggered the Panic, but that the underlying cause was a speculative boom that littered the landscape with unsound ventures.
Grover Cleveland, a Democrat, took office in March 1893. His Democratic Congress cut the McKinley Tariff, and it was a good thing it did, especially for the state of Washington, which increased its trade with Japan and China through most of the 1890s. Trade was one of the ways we got out of that depression.
A lesson for today? Sure. Trade is movement, commerce, life — the opposite of depression. Because it made trade more costly, the McKinley Tariff was likely a contributing factor to the Panic, but I cannot verify this by my research. As I write in The Panic of 1893, the central cause of the depression was investors and lenders losing their heads during the speculative boom that preceded it.
(For more information on major events in Washington state-China relations, go to WA China Chronicle.)