THE PANIC OF 1893.--When Cleveland's second inauguration took place, March 4, 1893, our country had already entered a period of panic and business depression. Trade had fallen off. Money was hard to borrow. Foreigners who held our stocks and bonds sought to sell them, and a great amount of gold was drawn to Europe. So bad did business conditions become that the President called Congress to meet in special session in August to remedy matters. The silver dollars coined by the government were issued and accepted by the government at their face value, and circulated on a par with gold, although the price of silver bullion had fallen so low that the metal in a silver dollar was worth less than seventy cents. Many people believed the business panic was due to fears that the government could not much longer keep the increasing volume of silver currency at par with gold. Therefore Congress repealed part of the Sherman Act of 1890, so as to stop the purchase of more silver. THE WILSON TARIFF.--The business revival which the majority of Congress now expected, did not come. Failures continued; mills remained closed, gold continued to leave the country, and government receipts were $34,000,000 less than expenditures when the year ended. By the close of the autumn of 1893, hundreds of thousands of people were out of employment and many in want. In this condition of affairs Congress met in regular session (December, 1893). The Democrats were in control of both branches, and were pledged to revise the tariff. A bill was therefore passed, cutting down some of the tariff rates (the Wilson Act). [24] Nobody expected that the revised tariff would yield enough money to meet the expenses of the government. One section of the law therefore provided that all yearly incomes above $4000 should be taxed two per cent. Though Congress had levied an income tax thirty years before, its right to do so was now denied by many, and the Supreme Court decided (1895) that the income tax was unconstitutional. [25] AUSTRALIAN BALLOT.--One great reform which must not go unnoticed was the introduction of the Australian or secret ballot. The purpose of this system of voting, first used in Australia, is to enable the voter to prepare his ballot in a booth by himself and deposit it without any one knowing for whom he votes. The system was first used in our country in Massachusetts and in Louisville, Kentucky, in 1888. So successful was it that ten states adopted it the next year, and by 1894 it was in use in all but seven of the forty-four states.