The Panic of 1893 Hits Latah County

One hundred and twenty years ago, to the day, M.J. Shields (or a representative of his company) penned the following letter:

Copy of letter from M.J. Shields correspondence ledger.  LCHS LC Shields, MJ.02

“Whitman & Barnes Manufacturing Co.,

                Chicago, Ills.

Gentlemen:-

                Yours of October 25^th to hand, calling our attention to our note for $374.00 which is due on November 1^st.  We have delayed writing you, expecting that our collections would come in fast enough to take care of our little outside indebtedness, but everything is against us in this country this year.  We had a fair crop of wheat, but it has been raining here for the last 60 days off and on, to such an extent that the farmers have not been able to harvest their crop, or but very little of it, and owing to the financial situation we are not able to borrow a dollar in the country.  Out of $150,000 falling due and past due the 1^st of October we have not collected so far this month $2,000, nor is there any prospect until the farmers have a chance to harvest, which they are doing now, as the weather has been favorable for several days.  If you send your note we will have to ask you to have patience with us for a little while until our collections begin, and out of the first money we receive we will pay your note. 

                Hoping you will grant us this favor, we are, Yours truly”

The M. J. Shields & Co. was not the only business in Moscow struggling to pay its creditors.  1893 proved to be a difficult year for businesses across the country.  A financial panic, attributed to a number of factors, sent shock waves through the American economy.  Widespread failures in wheat crops, from Argentina to the Palouse, compounded the nation-wide depression.  As Shield’s letter noted, most farmers in the area were left unable to pay their bills when near constant rain kept them out of the fields. 

M.J. Shields Company, on the corner of 4th and Main St in downtown Moscow, 1890s.  LCHS 01-03-040

Agnes Healy Jones reminisced about the hardships of 1893 when she was interviewed for the Latah County Museum Society’s Oral History Project in 1973.

Interviewer: “How was your family affected by the first depression – the 1893 depression?  Was that hard on you out here?”

Jones: “Well, my father and mother were – you see, Dad rented the ranch out and that’s how his renter couldn’t pay the rent.  And that’s why he had to move back, you see, to run these hogs and make good, you see.  The renters couldn’t pay the rent and it rained so much that fall.  That was an unusual year, it rained so much that the stacks turned green.  They couldn’t get them threshed…”

Another Latah County pioneer interviewed for the same project in 1975, John Eikum, was also asked about the unfortunate details of 1893.

Interviewer: “What happened during the 1893 wet harvest?  Did many people go under in that?”

Eikum: “They all went under.  All but two or three.  Then they moved out.  In 1895 they opened the Nez Perce Indian Reservation for settlement.  Some of them went there and lots of ‘em went up to Troy, settled around Troy.  Well, it was pretty hard times.  No money.  They couldn’t pay their debts.  And there was no chance of borrowing any money in those days…”

 

Despite these financial hardships, M. J. Shields was not among those who “went under,” although he was forced to restructure his business.  Governor William McConnell was not so lucky.  The Panic of 1893 left the Moscow mercantile McConnell, Maguire & Co. disastrously underwater. 

From Evening Capital Journal April 25, 1893. Accessed Oct. 30, 2013 at http://chroniclingamerica.loc.gov/lccn/sn99063952/1893-04-25/ed-1/seq-1/

  

The Evening Capital Journal (Salem, OR) reported the shuttering of McConnell, Maguire & Co. in April 1893 under title “The Mixture Causes a Big Failure in Adjoing State” and went on to report that “the firm made large purchases of wheat and it was thought profited largely thereby.  The recent depression in the wheat market, however, is said to have caused heavy loss and the firm was unable to meet its obligations.” 

M.J. Shields Planing Mill at SW corner of 6th and Jackson St., Moscow, 1890s.  LCHS 01-03-179.

The letter from M. J. Shields & Co. comes from a correspondence ledger recently donated to LCHS by a former owner of the Shields Building in downtown Moscow.  We are fortunate to have a large collection of letter books and company records for Shields’ multifaceted enterprise.