But the inevitable retribution was not abandoned; it was only delayed. [Sidenote: Sept. 1873 A.D.] While the currents of commercial activity still flowed with unwonted swiftness and smoothness, the failure of a large financial house in New York gave the signal for a panic, which speedily assumed an aspect of unprecedented severity. Business stood still; the exchanges were closed; the banks ceased to give out money; the payment of debts became impossible. In a short time the intensity of the excitement passed away, leaving a deep-seated depression, which continued for six years. It was now discovered that men had been deluding themselves with a merely visionary prosperity--that all values had been wildly inflated; and it became the sad and surprising experience of very many that their fancied wealth had, in part or wholly, disappeared. Factories were closed; artisans were unable to obtain employment; wages fell, step by step, till in many industries they had undergone reductions which were not less than forty per cent. All stocks and every description of property sank lamentably in value; railway companies and other borrowers of foreign capital discontinued payment of the promised interest; immigration almost ceased--for who would now seek a home in this afflicted and impoverished land? America emerged from those miserable years with her vitality undiminished; with her financial position improved; with her industrial system organized, for the first time, upon a basis of rigorous economy; with the views of her people corrected, and their character braced by adversity. The operatives who were unable to find employment in the cities of the east had made their way westward, and were now contributing to the greatness of the nation by cultivating the soil. Personal extravagance ceased, and the imports of foreign commodities fell one-third. On the other hand, the exports increased largely. America had for many years been accustomed to use an amount of foreign goods very much larger than she was able to pay for by her own surplus productions. In settlement of the excess, she endured a drain upon her store of the precious metals, or she neutralized it for the time by the loans which her people obtained abroad. Now all this was changed. America exported so largely of her manufactures and of the products of her soil, and restricted so carefully her purchase of foreign commodities, that now she has to receive from foreigners an annual balance which exceeds fifty million sterling. And during the painful years through which she passed, while nearly all European countries continued to add to their public indebtedness, America continued to reduce hers. Her debt, which at the close of the war amounted to six hundred million sterling, thirteen years later was only four hundred million.[2] And whereas at one period an amount equal to one-half of her present debt was owing to foreigners, it is now, to the extent of five-sixths, owing to her own citizens.