Northern Times.
Liverpool, Merseyside, England, 1857-12-21 00:00:00

A TEMPORARY NATIONAL LOAN.

In the meantime it is the duty of the government, by all proper
means within its power, to eid in alleviating the sufferings of the
people"occ ;stoned by the sunpension of the banks, and to provide
against the recurrence of the same calamity. Unfortenately, in
either aspect of the case, it é.n do but little. Thanks to the ands
pend• nt Treasury, the government has not suspended payment, as it
was compell .d to do by the &Unroof the banks in 1537. It will con-
tinue t div.harge its liabilities to the people in gold and silver. It.
disbursements In coin will pass into clrenlation, and materially assist
in restoring a sound currency. From its high credit, should we be
compelled to make a temporary loan, it can be effected on advantageous
terms. This, however, shall, if possible, be avoided ; but if not, then
the amount shall be limited to the lowest practicab'e sum.
I have, there ore, determined that whilst no useful government
works already in progress shall be suspended, new wo-ks, not already
commenced, will be pstponed, if this can be done without injury to
the country. These necessary for its defence • hal proceed at though
there had been no crisis in our menet& y affairs.
But ta•• federal government cannot do much to provide against a
recurrence of exeting evils, Even if insnrmountaele coretitutional
objections did .net exist against the creation of a national bank, this
would furnish no adequate preventive security. The history of the
last bank of the United States abund i.ntly proves the truth of this
assertion. Such a bank cools not, If t would, regulate the issues
and credits of 1.400 State banks. in such a manner .is to prevent the
ruinous expansions and contractions in our currency, which afflicted
the country throughout the ex stence of the late bank, or secure us
against future snapenlots. In 1825 an effort was made by the Bank
of England to cu tail the issues of the count y banks under the most
favourable circumstances. Th e paper currency had been expanded
to a ruinous extent, aad the bank put forth a'l its power to contract
is, in order to reduce paces and restore the equilibriten of foreign
exchanges. It accordingly co umeneed a system of curtailmerre of es
loans and issues, in the vain hope that the joint stock and priva e
banks of the kingdom woula be competed to fellow its example. It
found, however, that a. it contracted they expanded, and at the end
of the process to emteoy the language of a very high official untho-
titer, "w ,atever redu-tion•of the paper circulatioa was effected by the
Hank of England (in 1825) was more than male up by the issues of
the country banks."

THE POWER OF A NATIONAL •EANE-STJGGESTION3 TO THE

STATa B INK*.
But a bank of the United Sta es would not,• if it conl,l, restrain
the issues and loans of
.the state banks. be ante its duty as a
regulator of the currency mu t often be in &met confl ct w;th the
immediate interest of its stockholders- If we expect one exult to
restrain or control another th_ir int-rest must, in some degree, be
antagonistic. But the directors of a baak of the United States
would feel the same interest and the same inclination with the state
banks to expand the currency, to accommodate their favoutites and
friends w,th loans, and to declare large dividends. Such has been
our experience in regard to tee last bank.

_ .
After al', we must 17nain'yrely two the patriotism and wisdom of
the states for he, prevention and riattress of the evil. If they will
afford Us a real specie basis for our pa; er circulation by increasing the
denomination of bank notes, first to twenty, and afterwards to fifty
dollars ; if they will 'require that the banks shall at all times keep
on hand one dollar of gold and +Ryer hr every thr-e do'lars of their
circulation and deposits ; and if they nil provide by a self execut-
ing enactment, which nothing can arrest, that the moment they
suspend they shall go into liquidation. i be'ieve that each provisions,
with a weekly publication by each bank of a statement of Its condi
Lion, would go far to secure us a3ainst future sus;ensiins of specie
payments.