The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-10-24

renee for the very able persons with whom differ
not all Of them well founded. The merchants as a
body, have been censnred for imprudent and profit
gate speculation. They, in turn, accuse the Go
vernment, Of wanton and even wicked tampering
with the great interests of commerce. which govern
ments seldom touch without doing mischief
Sir do not think this Fit occasion for angry re-
elimination and having been absent during the con-
! fict, 10 which allude, / desire TO mingle as little
as possible in the passions of the past. must say
however, that incline to believe more importance
has been attached to the Specie Circular in mere
economical point of viewI say nothing of its p0ii-
cat characier-than il deserves i do not mean to
affirm that had not its share in adding TO The
barrassmenls OF the money market after the revulSon
had begun. Bu the tide had turned before. That pa
perwaS issued here on the llth of July 1886 Now as
early the LIST of July, the Bank of England had felt
| itself constrained TO adopt course which led TO
instant fall of prices, and this fall Of prices was in
short time as much as 20 or 30per cent Mr. Hors
/ ley Palmer, in the pamphlet already alluded to- ad
mits the fact and justifes the proceeding Hbcs
coaftsHtem Teum.t Now, sir be pleased 10 consider
what frightful havoc loss of 20 30 per cent on
800 600 bales of cotton alone, would occasion in
the commercial world, especially when suchaterrble
| dsfcit happens 10 be accompanied by contraction
of bank issues and great scarcity in the money
set, al period Of prodigiouS ereiternet IN erery
branch Of trade (for il is then only that contractions
are dangerous and Of speculative investments in
every sort of enterprise The Bank of England
through its deputy governor, alleges in justification
of its course that its treasure which was just begin
ming recover from the drain occaSioned BY specula
| tionS in Spanish and Portuguese funds during the
year ls3i-another phrenzy of the times that led 10
a catastrophe which witnessed in the spring of
1885 and in h0rd nancy countries too-was again re-
duced by drafts made upon ii for various purposes in
America TO the amount OF f2,6OO,0O0 OF this
amount e | 900 900 was borrowed for the Bank of
the United States the rest over TO be laid out
no doubt in canal and railway or bank stock; or, to
supply as Mr. Palmer SuppOSes the vacuum in our
circulation occaSioncd by the prohibition in of
jba Sfntau ,f mott, M he npw dam nIf
gold consequent upon the change introduced by the
gold bill in the session Of 80. Sir, as the guardian
of the currency of England. the Bank was, no doubt
ON strict principle, justified IN pursuing that cautious
policy, in imposing salutary check upon specula-
tion but have very great doubts whether il did not
go far and whether its sudden and rather violent
interference with the natural course of things, has
not been attended in England as well as IN this coun-
try with evil consequences that might have been
avoided or at least very much mitigaed, had ex-
changes been left to correct themselves as they have
a natural tendency to do. 1t is circumstance wor-
thy of the particular attention OF the Committee, and
advert it to show that nothing can be more unjust
than the charge Of prohigate speculation made
against the great body of our merchants, however
individuals may deserve censure,) that from 1881
until late in the autumn of 1886, exchange with Eu
rope never fell below and was often much above
par, although the apparent balance of trade was dur
ing that period steadily and greatly against us Sir,
this singular phenomenon is now satisfactorily ex-
plained-we know that IL was owing to immense in
] IL,
sent over in the shape of goods } in the u States,
quite independent of the ordinary commercial ba-
lance. For example, was made upon the
Bank of England IN May, 1882, during the agitation
that accompanied the passing of the Reform Bill, TO
the amount of f2,00000O, which never returned to
the bank, and was supposed to have been boarded
but which believe came hither. This crcum-
stance was at the time, attributed TO political trick
to pref udce the minds of the people against the
great measure then before Parliament have
reason however, to know that the panic was by no
means feigned-that approximations of revolution
were seriously entertained by many of the higher
classes in England-and as the payment of
tional debt and our immense prosperity had called
the attention of European capitalists 10 this country,
large amounts were sent hither, not only in quest
of higher interest, but as safer investment than
could be made at homc-tor in the present state of
the world capital will go abroad in spite of all the
contrivances of Government recommended, | re-
gret TO say, by Mr.. Palmer, TO prevent its seeking
more profitable employment there. We know all
this no,c, and WI see what this vast influx of British
gold and British credit had to do with prices and
speculation here--but who saw it then? How was
the merchant to know what was at hand that the
ground upon which he stood, or thought he was
standing covered an abyss that SO soon to
open and swallow him up-that the scene of most
fiaerng prosperity which had for five years excited
and cnranced his senses, was to vanish like dream
at the touch of foreign power
great many circumstances conSpired to keep up
the delusion and even some which one might have
thought would produce the very opposite effect
Thus the removal of the Deposites, and the panic
and contraction in 1884 consequent upon that mea-
sure, led to further importaonS of the pre-
couS metals, and accordingly it appears that
there was an accession of nearly II millions of
specie in that single year A metallic basis was
thus formed for the inordinate number of banks
chartered by State legislatures, to supply the place
of the United States Bank and still greater aliment
was added TO the spirit of speculation, already
excited by the high prices of produce in England,
and the Unprecedented demands for the public lands
in Mast ht nhrn I'hn
idea that excessive circulation the sole
of all the mischief, an idea encouraged both by
the friends of national bank and by the enemies OF
all banks, appears to entirely iaaclous 1t Is VAIN
to state, continually done IN such discussions,
the amount of currency at period, aud to compare
it with that amount at another, without any reference
10 The amount the prices Of the commodities has 10
circulate No sound inference can be drawn from from
the naked fact OF such difference For nstacne, had
the price of produce not fallen the English market,
had the cotton crop been worth $50 80 600 900, in
stead Of being fallen to half the former sum, 1t is
manifest that 1t would have required ccieris pdrbus,
twice the amount of circulation to effect the usual ex
changes in it. Not only so, but in periods Of great
excitement, it is merely the products Of indus
try that sell, is not simply the annual income of
the land and labor of the country that exchanged but
the very soil ITSELF the whole country with all that it
contains, the market This to the extent to which
it is carried, peculiarly of our people Sir, do
mention this a very prepossesslng honorable
frat IN our character- mention it SIMPLY as tdck
We have no local attachments generally speaking
nothing bears tho preiium afccii0ms in eyes II
an estate, residence in town, country seat rises
little beyond what accustomed to think its value.
it sold without any hesitation Accordingly, there IL
in such times a capacity for absorbing an expanded
currency in this country, greater perhaps, in proportion
than was ever known in any other county | am of
opinion, therefore, that prices in the United States,
were in general, relatively much higher than else
where during the last two years, except in where
On he demand md
easy TO account for their being BY far the greatest
amount Of speculation too, doubt carried on in
private paper But OF course, soon fall took
place that great leading staple commodity IN which