The Sun.
London, England, 1857-12-21 00:00:00

to redeem their liabilities in spt.ci-, they are com-
pelled t o contract Leir 10.. us and issues: and at last,
in the hour of dstle.:s, v+ hen a,,ist n e is needed,
they and tiieir debt:trs s..nk 7rioile,sxolvarsioncy.
t expansion
raising is this paper system of extrava4an
raising the noininA rate of every ar be,; and its
real value when compared with ae c.,st of similar
articles in countries ir,liose circtlia,!_. is wi.-zely re-
gulated, which has Prevented i-cs
our own market :with foieLn uria fl:CtUr,-2rS,
proelacAl extravagAlt On coun-
tot acted the effect of the largeio,:idental peotectiou
afforded to ourd,,mesic manufa,itur.tri, by The pre-
sent revenue tariff. But for this tht• branches of our
inanucturei, compJstd zaw the pro-
duction of our own country, such a cotton, Lon,
and woollen fabrics, would not oniy have occupied
almost exclusive possession of the market, but
would have created for themselves a foreign market
throughout the world.
Deplorable as may be our present financial condi-
tion, we may yet indulge iu bright hopes for the fu-
ture. No other nation has ever existed which could
have endured such violent expansions and contrac-
lilttain
heotueioi
bstniuoe,:f paper
and
diliccredits without lasting injury, yet
ltly
eeonfsapybi
spirit
ut tuwhsh,
isctohhoenn ee
eeorrgrcii
eencsaoioNi_sfe
rbo
fteirfroo
rmpeo
dop
uui
fr-..
present 'financial 'embarrassments, and may never
occasion us speedily to forget the lesson which they
have taught.

In the meantime it is the duty of the Government
by all proper means within its power, to aid in alle-
viating the sufferings of the people occasioned by
the suspension of the banks, and to provide against
a recurrence of the same calamity. Unfortunately,
in either aspect of the case, it can do but
Thanks to the independent treasury, the Govern-
ment has not suspended payment, as it was com-
pelled to do by the failure of the banks in the year
1837. It will continue to discharge its liabilities
to the people, and gold-and silver, its disburse-
ments in coin, will pass into circulation and mate-
rially assist in restoring a sound currency.
From its high credit,• should we be compelled to
make .a
temporary loan, it can bo effected on ad-
vantageous terms. This, however, shall, if possible,
be avoided ; but if not, then the amount shall
limited to the lowest practicable sum.
I have thereforedetermiiled that, whilst no use.
ful government works 'already in progress shall be
suspended, new works not already commenced
shall be pDstponed if this can be done without in-
jury to the country. Thosa necessary for its de-
fence shall proceed as though there had been no
crisis in our monetary affairs.

But our federal Government cannot do much US
provide against a recurrence of existing evils.
Even if insurmountable constitutional objections
did not 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 abundantly proves the truth of this asser-
tion. Such a bank could net if it would regulate
the issues and credits of 1,400 state balks in such
a manner as to prevent the ruin,n, expaiisions and
contractions of our enriei;ey which afflicted the
country throughout the ,xi.-.,,.n0- ~f the late bank,
or secure us again:: future sn:::p.-11,110t18.
In 1825, an effort w:i.ti male by the Bank of
England that it might curtail tht-i issues of the coup-
i ry banks under tile most favourable circumstances.
Tne paper currency had been expended to a ruin-
ous extent, and the bank put forth all its power to
contract it in order to reduce the prices and restore
tie equtli i)lium of the foreign exchanges. It ac-
cordingly commenced a systeni of curtailment of its
loans and issues, in the vain hope that the joint-
! stock and private banks of the kingdom would be
cow pelled to follow its example. It found, how-
ever, that as it contracted, they expended, and at
the end of the process, to use the language of a very
high official authority, whatever reductia3n of the
paper circulation was effected by the Bank of Eng-
land in 1825 was more than made up by the issues
of the country banks.
But a bank of the United States would not, if it
could, restrain the loans and issues of the state
banks, because its duty as a regulator of the cur-
rency must often be in direct conflict with the im-
mediate interest of its stockholder,. If we expect
one agent to restrain or control another, their inte-
rests must in some degree be antagonistic ; but the
directors of a bank of the United, States would feel
the same interest and the same inclination with the
directors of the state banks to expand the currency,
to accommodate their favourites and friends with
loans, and to declare largo dividends. Suoh has
been our experience in regard to the last bank.
After all, we must mainly rely. upon the patrio-
tism and wisdom of the States for the prevention
and redress of the evil. If they Will afford us a real
specie basis for our circulation,, by increasing the
denomination of bank notes first to 20 and after-
wards to 50 dollars ; if they Will require that the
' banks shall at all times keep on hand at least one
dollar of gold and silver for every three dollars of
their circulation and deposits ; and if they will pro-
vide, by a self-executing enactment, one that no-
thing can arrest, that the moment they suspend
they shall go into liquidatiou, I believe that such
.. .

provisions, with a weekly publication by each bank
of a statement of its condition, would go far to se.'
cure us against future suspensions of specie pay.
nients.

Congress, in my opinion, possesses the power tar
pass an uniform bankrupt law. applicable to all
banking institutions throughout the.tinited States,
and I strongly recommend its exercise. This would
make it the irreversible organic law of each bank's
existence that a suspension of specie payments shall
produce its civil death. The:instinet of self-preser-
vation would then compel it to perform its duties
in such a manner as to escape the penalty and
preserve its life.
The existence of banks and the circulation of
bank paper are so identified with the habits of our
people, that they cannot at this day be suddenly
abolished without much immediate injury to the
country. If we. could confine them to their appro-
priate spheres, and prevent them from administer-
ing to the spirit of wild and rtckless speculation by
extravagant loans and issues, they might be con-
tinued with advantage to the public. But this I
say, after long and much reflection ; if experience
shall prove it to be impossible to enjoy 'the faculties
which well-regulated banks might afford without at
the same time suffering the calatuiti,es which the
excesses of the banks have _hitherto inflicted upon.
the country, it would then be far, the lesser evil to
deurive them altogether of the powt:r to issue a
paper currency and confine them to the functions
of banks of deposit and discount.
RELATIONS \VITR GREAT I3RITAIN.

Our relations with foreign governments are upon
the whole in a satisf.ct,ry cAt tit ion. The diplomatic:
difficulties which exi‘t2d betwe Ihe government
of the United States and that of Great Britain, at the
adjournment of the last Congress, have been happily
terminal ed by the appointment of a British minister
to this country, who has been cordially received.
Whilst it is greatly to the intertsts, as I am con-
vinced it is the sincere desire of the governments
and people of the two countri*s, to be on terms of
intimacy and friendship with each other, it has
been our misfortune almost always to have hail
some irritating, if not dangerous, outstanding ques-
tion with Great Britain. Since the origin of the
government we have been employed in negotiating
treaties with that power, and afterwards in discus•
sing their true intent and meaning.
in this respect the convention of April 19, 1850,
commonly called the Clayton and Bulwer Treaty,
has been the most unfortunate of. all, because the
two governments placed directly opposite and con-
tradictory constructions upon its first and most im-
portant article. Whilst iu the United States we
believed that this treaty would place both powers
upon an exact equality, by the stipulation that
neither will ever occupy, or fortify, or colorise, or
assume, or exercise any dominion over any part of
Central America, it is contended by the British Go-
vernment that the true construction, of this lan-
guage has left them in the rightful possession of all
that portion of Central America which was in their
occupancy at the date of the treaty ; in fact that
the treaty is a virtual recognition on the part of the
United States of the right of Great Britain, either
as owner or protector of the whole extensive coast
of Central America, sweeping round from the Rio
Hondo to the port and harbour of San Juan do
Nicaragua, together with the adjacent Bay Islands,
except the comparatively small ofportion h
the
be-
tween the Serbon and Cape Honduras, and accord-
ing to their construction the treaty does no more
than simply prohibit them from evending. their
possessions in Central America and beyond e pre-
sent limits.

It is not toomuch to assert that, if in the United
States th
under
itt rdeeart y
the had
authority
beenho r i
tcy
ist,
that have
States
i. The
such a construction, it would never susceptible of
never have been ne-
gotiatedSw eonual
received of the President, nor
the approbation of the
universal conviction in the United
violate its when our government consented to
traditional and time-honoured policy,
and to bti plate with a foreign government never to
occupy or acquire territory in the Central American
portion of our own continent., the consideration
for this sacrifice was that Great Britain should,
In this respect at least, be placed in the same posiw
tiou with ourselves.
Whilst we have no right to doubt the sincerity of
the British Government in their construction of the
ttiroerait itt
tiisii s atc
otnhsetsraule
ention itimes It y
oppositiond ,lib erat vi
e bcootnhtc;
its
se
spirit.
administration
eel. the two Governments, for the
its
uuYrtlpeintoineitseierr, datinhtbdeepto\veible, of removing these difficulties,
and a new treaty having this_ laudable object in view
was signed in Londou en the 17th Oct, 1856, and