Herald of the times. [volume] (Newport, R.I.) 1830-1846, 1837-09-14

Tue acq"hsItioh ana enlargement of credIt.-
At the commencement of the year 1884, the
banking capital of the United States includ.
ing that of the national bank then existing
amounted to about two hundred millions oi
dollars the bank notes then in circulation Ia
about ninety five millions and the loans and
discounts OF the banks three hundred and
twenty four millions. Between that time and
the first of January, 1886, being the latest pc,
riOd To which accurate accounts have been
received, our banking captrl was increased
To more than two hundred and fiiiy-one mil
lions our paper circulation to more than one
hundred and forty millions, and The loans and
discOSpts To more than four hundred and fifty
seven millions. 10 this vast increase are to
be added The many millions Of credit, ncquir.
ed by means of foreign loans, contracted by
the States and State institutions, and, above
oil, by the lavish accommodations extended
by foreign dealers to our merchants.
The consequences Of this redundancy oi
credit, aud of the spirits OF reckless specnla
ton engendered by it, were a foreign debt
contracted by our citizens, estimated in March
last at more than thirty millions Of dollars,
the extension TO traders in the interior of our
country Of credits for supplies, greatly beyond
the wants of the people the investment Of
thirty-nine and half millions of dollars in
unprOductive public lands, in the years 1885
and 1886, whilst in the preceding year the
sales amounted to only four and a half mil-
lions T; the creation of debts, to an almost
countless amount for real estate in existing
or anticipated cities and villages, equally un-
productive, and at prices now seen to have
been greatly disproportionatc to their real
value the expenditure Of immense sums in
improvements which in many cases, have
been found to be runously improvident the
diversion to other pursuits of much Of the Ia.
Dor that should have been applied to ogrlcul-
ture, thereby contributing to the expenditure
of large sums III the importation of grain from
European expenditure which, amounting
in 1884 TO about two hundred and fifty thou.
sand dollars, was in the first two quarters Of
the present year, increased TO more than two
millions of dollars: and finally without emu
merating other injurious results, The rapid
growth among al, classes and especially in
our great commercial towns, of luxurious ha
bits, founded too often on merely fancied
wealth, and detrimental alike to the industry,
the resources, aud the morals of our people.
However unwilling nny of our citizens may
heretofore have been to assign to these eau
ses the chief instrumentality III producing the
present state Of things, the Developments
subsequently, made, and the actual condition
of other commercial countries, must as it
seems to me, dispel all remaining doubts up
on the subject. II has since appeared that
evils similar 10 those suffered by ourselves,
have been experienced in Great Britain, on
the continent, and, indeed, throughout the
commercial world and that in other coun-
ries, as well as in our own, they have been
uniformly preceded by an undue enlargement
of the boundaries Of trade, prompted, as with
US, by unprecedented expansions of the sys-
TENS Of credit. A reference to the amount
of banking capital and the issues of paper
credits put IN circulation in Great Britain, BY
banks, and other ways, during the years 10
81, 1885, and 1896, will show an augmeDta-
ton of the paper currency there as much dis
proportioned to the real wants Of trade as in
the United States.
With this redundancy Of the paper curren-
cy, there arose in that country also spirit OF
adventurous speculation, embracing the whole
range Of human enterprise.
Aid was profusely given to projected i'm
provements, largo investments were made IN
foreign stocks vnd loans; credit for goods
were granted with unbounded llberaiity to
merchants in foreign countries; and all the
means of acquiring and employing credit
were put IN active operation, and extended
in their effects to every department of bust
ness, and To every quarter Of the globe. The
reaction was proportoncd in its violence to
the extraordinary character of the events
which preceded It.
II was so impossible that such stnte Of
things should lougcr continue, that the pros
pect of revulsion was present to the minds of
considerate men before it actually came
None, however, had correctly anticipated liz
severity. A concurrence of circumstances
inadequate Of themselves to produce such
wide spread and calamitous embarrassmcnts,
tended so greatly to aggravate them, that
they cannot be overlooked in considering
their history. Among these may be mention-
ed, as most prominent, the great loss OF capi-
tai sustained by our commercial emporium in
the fire Of December, lS36-a loss, the ef-
ftcts of which were underrated at the time.
because postponed for a season by the great
faci cilities of credit then existing the disturb
ing effects, in our commercial cities, of the
transfers Of the public moneys required by
the deposite law Of June, 1896 and the mca.
sures adopted by the foreign creditors Of our
merchants to reduce their debts, and to with.
draw from the United States a large portion
Of our specie.
The commercial community Of Great Brit
ain were subjected to the greatest difficulties
aud their debtors in this country were not
only suddenly deprived Of accustomed and
expected credits, but called upon for pay
ments, which in the actual posture Of things
here, could only be made through genera
pressure, and at the most ruinous sacrifices.
In view Of these facts, it would seem i'm
possible for sincere inguirers after truth to,
resist the conviction, that the causes OF the
revulsion in both countries have been sub.
the same. Two nations, the most
in the world eninYinq but recent