The daily union. [volume] (Washington [D.C.]) 1845-1857, 1851-08-19
FROM Huat,s Merchants msssEins, August, 1851
Uns Progressing Exp~asasn.

IN. Progressing Expansion.
The gold OF California has entered as new and con-
trolling element into our systems oil commerce ana
fnancs II must become an influential power IN every
rrcat movement and its various bearings will continue
10 be subjects OF interesting and important investigation
The internal action OF the country feels It's quckennS
energy every point. while II is changing our financial
relations 10 other nations. Its first and obvious Chests
are the svoutons OF credits the increased issues OF sk
listing banks. and the rapid creation OF new ones .hs
every million OF gold retained ~ the country VIZ sn
have addition OF from three to four millions o. pfes
Then universal initiation OF prices alec.ps n,s
stocks, city real estate, and all the more aad ;,.s
forms OF value and gradually reaching The land i!se
Consequently with the rise IN prices ee
dplcaon Of projects Millions Oh new.y an;sh
seems suddenly have acquired an unlimited capacity Tor
Absorption For the fret time IN series OF years we
buy much more than we pay Gt yn s oeS as
AN this tends a revulsion Certainly il must have
limit Al what point in this career have we now ar
rivedi What are our securities! What our dangers :
and what are the precautions demanded Our present
relative position may be by glance at the tables
which indicate the course OF our banking and CONNER
Going back years for starting point, and
noting the periods OF highest expansion and of lowest
contraction in the intervening time the leading accounts
Of the banks Of the Union exhibit the following aggre
gates
Capital ;:saeeas44 sasosa,0s sass,ss'4s s7,ssso74
s:ss sssss tss
Taking the loans and discounts as the index of The
state Of credits. end them 1884 sufficiently large for
the capital but rising rapidly from that period hil IN
twenty 1--WE millions Then followed long and distress
full contraction, which, S43, had reduced the bank
loans to two hundred and fifty four mlions-beng less
than onehaf of their amount six years before From this
point Of depression we may mark the progress Of
the expansion now in course OF development Il began
with the most rigid caution growing only with the abso
Lutte demands of business, until 1919 During this inter-
val Of six years. the loans of the banks had increased
only seventy eight Millions But, upon the discovery of
California, there sudden accelera OF the move
nsnt and in two years the loans ran up eighty mllions
that in January, 1851 they had again reached high
~ four hundred and twelve millions. Since The opening
OF 1851 the advance has been still more rapid and the
limit Of 1887 10 evidently not far of The statement OF
next January will probably show that the old maximum
has been nearly, if not fully. attained
Our commerce exhibits similar history During the
years OF currency expansion from 1883 to 1885, our i'm
ports exceeded Cur exports by the enormous sum OF two
hundred millions. In 1910, under the total destruction of
our credit abroad, we were forced TO pay Tor what we
bought, and the current changed and in the ten years
down to the close OF lS49 the aggregate balances in
favor amounted to about forty-tou millions. Thus was
going q heaihful process OF liquidation, when the first
receipts from the land Of gold gave and powerful
impulse 70 trade La single year our imports rose about
tionary. The tables OF imports into New York Tor 1851
show ratio OF increase which renders il probable that
imports this year will exceed two hundred millions,
and will be some sixty millions IN excess OF the average
ordinary amount
Thus manifest from the tabular records Of bank
ing and commerce. that vast and rapid expanso is
declares the same fact. general feeling pervsdes the
public mind that the elements gathering for storm at
no distant day.
What, them are securities compared with
the last period OF overaction!
The present movement is not. like the former ones
purely facttious Ii has real increase OF gold for its
basis We have in the mines resource Tor supporting
our credits and for recovering from such
we have had before Heretofore the only process
OF restoration from overadng was painful and uiaous
sne. Ten millions exported TO settle balances with
ioreRn countries would reduce the whole stock OF coin
in all the banks Of the Union full fourth Widespread
embarrassment would follow, and our only course OF
covery would be through period OF economy earning
back The millions we had lost Now our condition is
wholly changed With California behind our bank
vaults we may send abroad ten or twenty millions within
Z few weeks and we shall soon replace them from our
own soil We have not, as formerly, 10 export our cot
We have only 10 check impoHaiions, and our own hills
soon give forth the required supply and all is right again
The capacity OF our golden region to provide for any
accidental balances against may be by compan
OF our exports OF gold with whole trade Thus
our average OF exports for the last ten has been
about that of imports has been about the
been about 20 millions Now, with the capacity pro-
duce and export from so rs millions OF gold have
gained resource Tar above the demands OF any previous
balance against us Bearing 40 large proportion 10 the
aggregate value OF whole exports may be relied
to meet the exgences OF year OF overtradng that is
not utterly wild and reckless.
Hitherto cotton has been prime article OF export
our annual crop exceeding IN value any staple exported
from any country, and forming about onehrd OF the
WhOie values shipped from Inc Unlled States. Hence a
decline in the price OF cotton has Away been felt through
al our commercial and financial interests Now have
new product, OF which shall soon be able to send
abroad IN amount exceeding the whole value OF
Ton exports. But small proportion OF in any sense
consumable at home IL is independent OF the huciua-
tons OF prices the prosperity of manufacturers, and all
those influences which affect the value OF our staples II
mott valuable In times OF pressure, and will always
cancel the same amount OF Indebtedness whatever may
be the state OF the markets
We have also new source of strength in the United
States treasury system. This system forced upon us
BY disastrous experience Formerly the revenues of
the government were made TO the greatest possible degree
m element OF disturbance and arrangement Being al
ways largest in seasons OF overrading, they were de-
posted in the banks TO be loaned thus further stimula
ting overscton, and giving the appearance Of greatest
abundance OF money just al the moment of greatest,
danger Under the existing system, this delu
uve influence ~ unknown. This revenue now
works ever as strong conservative principle acting with
the simplicity yet the Undertaking effects OF law Of
Nature. The accumulation OF a reserve OF from ten to
fourteen millions OF coin, always ready to reinforce the
banks ~ only it's most obvious benefit II is in the mode
and the times of that accumulation taat manlfests its
saluiary power Like the governor in the engine
Its presence u scarcely noticed under sale and regular
movements but The moment overacilon begins II not only
indicates the change but by shutting off the STEAM
an effective restriction until the working rate restored
increasing accumulatons first give the warning. But
that - not all The coin paid for duties is drawn from
.cuoh on lheiI par, and vigorous repression is thus
established II this enough b, and overading goes
Vn 70 dangerous extent and n drain OF specie SETS in
ITO" aoroao hen The resources which have been gather
nophe. ~ 49, ''"'
Inc sagscy tina, is forever calculating the loss Of in
erest on the money in the subea.ury il thai of tho
merchant doing extended busi