The Columbia Democrat. [volume] (Bloomsburg, Pa.) 1837-1850, 1840-05-30

countries. In the first class of cases, the
war must be prosecuted, or the other great
national exigency met, and the relation Of
debtor endured, until returning peace, or
renewed prosperity, shall have wiped out
the debt. In the second, the operations
are anticipated, and ordinarily depended
upon with safety 10 balance the accounts,
and terminate the unpleasant relation. TO
no transactions of these clssses are any Of
our subsequent remarks intended to be APP
piled.
A very different description Of foreign
loans and foreign dsbts have become com
mon in our country, and TO these il is our
wish to draw the public attention. We re-
fer 10 loans made by banking institutions,
either 10 relieve themselves from embarrass.
ment caused by improyident expansions in
banking, or to enable them to extend their
operations beyond the limit intended by
those who granted their charters; by con-
Panies aud associations, TO enable them to
monopolize an entire branch of internal
trade, or to embark in some enterprise Of
questionable prodnctveness, and by the
States Of The Union, without the provisi on
by taxation or otherwise, Of a safe and GER
tain fund TO meet the interest upon their
loans.
We think we are not mistaken in the as
sumption that early State loans were sought
in our own market and from our own coun-
!rymen. We believe, also, that one of the
first acts Of the borrowing State was TO es.
tablish and set apart fund to meet me paw
nlents Of interest upon she money borrow
ed. This safe policy prevailed for series
OF years, and until delelerous examples,
proceeding not from the States Of the Union
but from interpretations, the creations of
the State and Federal Governments; produ-
ced the change, the consequences of
which we consider SO fearful and alarm
ing.
The Bank Of the United States was the
frs, to make the standard Of its credit in
London The measure of It's business in the
United States. Other leading State iusti,u.
tions followed this practice of evil tendency
and none OF the interpretations which once
adopted this standard, failed 10 make their
interests conform to it. Thus change in
the value of money in foreign countries
would become the measure Of bank expau-
sions and coulraclions IN the Uni,ed States,
so far as the business Of the Bank of the
United States, and many of the larger
State banking Institutions, were concern-
cd.
A long period of general peace; and of
great prosperity in all the branches of trade
and industry rendered expansions, gradual.
RH
than contractlons; and thus from the known
excessive profits of banking in this country
engendered an appetite for the multipica.
ton OF bsnk charters, before unknown 10
us. Hence the number Of banks in the
country was at least doubled, in the course
OF some three or four years, and the bank
ing capital was enlarged in a still greater
proportion.
This multiplication OF banks and bank.
ing capital IN so shore period, could not
fail to produce proPoriionate expansion Of
our paper circulation. Such was the etFec,
with the further consequences Of increased
prices OF property, and an almost universal
passion for speculation. The multiplied
banks found customers, because almost the
entire community were stimulated 10 be-
come borrowers. and the great mass Dor.
rewed, not TO expend the avails Of thel
loans In aid of productive industry, but to
purchase to-day, for high price, property
which 1t was believed some other borro VI er
would purchase Tomorrow at still highe,
In process Of this sort, employing hun.
dreds OF millions of credit, in the shape Of
bank paper and bank discounts, the amount
ol interest annually accruing in favor of the
banks was enormous, while the property
upon which the money was expended was
actually producing nothing.
influence Of this powerful character, com
muneaed to the great body of citizens o
our cnuntry, could not fail lu be felt in the
Legislatures Of the States of the Union
They felt the impulsion, and acted under IT
Large loans were proposed, and it soon an
peared that the increase of banks, and 9th
or demands, had absorbed too much of th,
American capital 10 enable Them 10 find
ready or a cheap market in our own coun
try. The markets Of Europe were naturall,
s0nghii as not the Federal Government
and mot the Governments ofthe States a
lone, hut local corporations ia our CONNER
cial cities, had there found such a marke
for large loans upon their credit. For
line the State stocks of all description
were greedlly taken; but. as in all cases @
over tasked credit. the supply became NOR
than equal 10 the demand, and tho marke
IRlI