Weekly national intelligencer. [volume] (Washington [D.C.]) 1841-1869, 1847-07-17
THE FINANCIAL AND COMMERCIAL CRISIS
C0NSIDERED.--BY LORD AsHBURToS
FROM TIE NEW oaIrAss conarnc1AI puLIrrrs

/ FROM THE NEW ORLEANS COMMERCIAL BULLETIN.
The distinguished position held by Lord AsHBuRroS during
the half century, the commercial world renders pamph
let from his pen upon the of the present monetary diff
cues one OF more than ordinary interest Few possess
Larger share fntuve sagacy than Lord Ashburon and his
opinions on commercial questions founded upon long and
red experience, entitled great respect The brochure
before US is entirely free from dogmaica assumptions His
odshp when reasoning dspasonatey upon the working
the Bank Charter Act of 1884, which he persists contend
ing was based upon principles will receive the
attention which his high authority such questions must
universally command His lordshp says:
"My object in appearing before the public endeavor
to maintain, with few words the will permit the
opinion gave when the Charter Act before the House
Lords, that the expectations entertained of this nabe pana-
cea were unfoundedthatt would only work in fair weather.
when restrictions Of all sorts imperative and mmaeral
that could not fail to break down under the first difficulty
and hat Is IN fact serious aggravaton, if not indeed the
actual cause of the distress experience
" The nature and extent of these embarassments too
notorious Tor to be necessary to dwell upon them at any
length very short time ago the interest of money ID
and three per cent Every body found it difficult to employ
their capital Now nobody obtain for the best security
under b 10 IL cent The stagnaton of the
legitimate trade complete the manufacturer stops his works;
the Minister obliged to double the interest of his Exchequer
bills and still loss give decent appearance
public credit while Mr. Brown merchant Of the first
DIT and character representing South Lancashire, tells the
House OF Commons that the alarm and of confidence
were such that orders for human food the United States
ana other countries were in many countermanded
prudent houses not choosing to risk their credit by being
drawn upon until they should what steps Government
might take to restore the healthy action of trade On the
other hand orders for the manufactures the country cannot
be executed by which be enabled pay for this
food because the entire stagnaon OF the circulation prevent
ed the ordinary operations Of credit by which alone such
transactions can be conducted There class in cour
try where the machinery its economy complicated who
do not suffer under this strange state of things from the rich
est capitalist to the poor mechanic who lives his daily labor
but my object describe its fatal consequences su
fered to continue, which sufficiently Obvious but call
public attention to the which have brought about
that we may endeavor to avoid the repetition of such
calamity"
His lodshp then proceeds great length to anayze the
causes which led to the panic of 1925 contrasting the details
of that event with the difficulties of the present PERIOD which
he describes in the following terms
6 Let shortly examine the unfortunate symptoms which
we now witness, when with sound of trade, and
600 Of specie in the bank monetary distress
greater than when, 1926 the Golfers of the bank were
empty, and large portion of merchants ruined by mad spe
culaion The treasure of the bank had stood for long
at about 900 in round numbers the of this
treasure was considered burden hem imposing useless
waste of interest. II subject of complaint and for
long time the directors would have been much obliged to any
body who would have taken four five millions off their
hands The want of food then occurred and combined with
the increased price of cotton ovebaanced the our
exports, and required part payment i'll bullion The
likely The continental exchanges afforded no ground
Tor alarm Russia at first took gold from US, which
soon ceased but the chief demand for America coun
try with which we have always extensive reciprocal trade
II might fairly be presumed that four five millions would
satisfy this demand which would reduce the treasure of the
bank from fifteen to millions. This, which might have
been the practical estimate of practical men, out be
the truth and the bank, with its ten millions left in its co
iers need have disturbed interests, disturbed them
slightly But the directors had power exercise any
opinion the rigid parliamentary machine think and
act for them the whole country dsodered and would
be difficult to form any estimate of the immense losses both of
the exchequer and of individuals which snsued.
:" beg not to be understood wishing maintain that
the eiax OF SPECIE the adverse of the foreign
changes are in no to be considered by the bank.
hold these symptoms the contrary be essential clements
guiding Its conduct but that they be considered with
all surrounding and connecting circumstances, by of
business and experience capable of giving them all
spending weight and Importance in erdeiberaon and be
imposed upon them dy and automatically, nay, mechanically,
by act Of Parliament. This question between limitation bv
rule or by discretion and the limitation by rule only
Of things nvaabe the rule ITSELF 1t would be foolish
and even miscellaneous, to ncucate indifference to, speak
lightly Of any suspension, for hour of the cash
men's of great bank 1t would be, say the least of it.
great public scandal to be guarded against by every pruden
a measure absolute security against such a catastrophe
hardly attalnabe IN the case of bank of issue The act of
1914 certainly does not give it for the whole treasure left by
hat act at the disposal Of the bank might have been drawn
out in five minutes by the private deposto and is worthy
Of remark, that with us under the former uncontrolled mani
such disgrace has
happened excepting in 1897 when the suspension forced
upon the bank by the large foreign payments of the minister
md these operations reluctantly consented by the d
ecto from belief that the safety of the country from for
'ign enemy depended on them
But why is this extreme OF the purity of the standard
't value of the integrity of the pound sterling, important
would be mere pedantry to be looking carefully after
possible small fractional difference for short time between
gold and paper, if this object not combined with the
more important one OF maintaining, well circumstances
permit an equabe value of money-of money taken in its
popular and consisting among Of the combined in
gradients of paper and metaof money compared with
ind commanding all commodities. Now this fright Of the
bank, with ten millions in her Golfers of violating this Par
iameny restraint has driven her into proceedings which
lave deprecated to very great every description of
property food only, for evident reasons excepted would
lot be easy TO estimate this deprecaton extending all
stocks, railroad shares probably would
lot be oversaed at from ten TO twenty per but what
worse, it has parayzed this property in the hands Of the
'ossessor rendered 1t unavailable towards meeting their
agemcnts, and thus produced in many cases. pecunary
acce, much beyond the depreciation OF the value of
he property itself Ii has further occasoned the suspension
the execution of orders from customers every quar-
thus distressing manufacturers and impeding those very
operations which would have corrected the tendency an UNI
avorabe balance Of trade given safety the circulation
Il the bank.
IL isneedess to follow further all the fatal consequence
capital branching from this mistaken anxiety about cur
ency The latter is, after ALL but the shadow of the former
he small change by which the transactions iquidated
hough undoubtedly in respects the regulator Of its
Inp have ha.to ~.