The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1853-05-17
TheComing Commercial Crisis.

ThRGoming commercial Csisiss
| Nearly six years have elapsed since the dis
coyery OF gold was made in California, and
within that time at least two hundred millions
| Of gold have been added to the currency Of the
world from that single source. Australia has
not been SO long in the field, and the product
has not therefore. been so great. II would not
be far out of the way to put the product Of that
country down at fifty millions of dollars. To
be within limits, we estimate the aggregate ad-
dition 10 the gold currency of the world within
the past six years to be about two hundred and
fifty millions of dollars. This leaves for the
arts and sciences The product Of all countries
but California and Australia. 1t appears by
official returns received from time to time from
the great banking institutions of Europe and
the United States, that there has been no in
crease in the amount OF gold bullion OF coin in
their vaults. The total amount on hand now
is no greater than it was six years ago. It has
not therefore. become the basis of the paper
currency. The increased value of metallic
currency must have passed from the minis into
active circulation, or, at ali events, into the
hands Of the people. 1t is pretty well established
mense credit structure which has been raised
to such dizzy height in all quarters of the
globe. The progress OF financial knowledge
and the genius of the age, have wiped out all
old systems, and new order Of things exists.
What would have been considered an impossi-
bility few years since in banking is now
daily practised apparently with impunity.
Unc tho
of middle-aged men, when GOLD and silver were
absolutely necessary as basis for banking
operations when it was considered the sole re-
preventative Of the paper currency Of the coun-
try. Since that time revolution has been
realized and the precious metals appear to be
OF no consequence, except for the purposes of
making change, and transporting from one Sec
tion Of the world to another. in regulating bal
ances of trade We now find banks sprnging
up by the dozen in all parts of the country.
and launching out at once into the most ex-
| banded movements, without five dollars in gold
or silver in their vaults. Credit is their basis.
| Paper promises to pay are the founda-
ton Of the whole future imitation and
one class OF credits serves to support another.
They ere piled up one upon the other, the first
having to sustain the whole, until the weight
becomes so great that the whole fabric tum-
bles with a tremendous crash to the bottom
Government and State stocks and bonds form
the first strata: then comes city. county. town
nd village bonds: then railroad bonds, canal
bonds, plankroad bonds. and so up, until the
most worthless, valueless paper securities. form
the capsheaf There appears to be no limit to
the amount or variety; and the first warning
the builders Of this splendid structure get of
IFS rottenness is a complete prostration and
destruction. spreading ruin and dismay among
those engaged in it's erection
During the past five years the financial and
commercial community have been rapidly rush
ing onward in this channel. They have been
actively engaged in creating evidences of debt,
without the remotest idea, apparently. of the
consequences. Bonds have been manufactured
by the million, and sold, either at home or
abroad, to the highest bidder, and frequently at
great sacrifice. All sorts of internal improve
ments have been commenced and partially
completed. and every species of extravaganza
entered into without the first thought Of where
the means of payment were coming from.
This recklessness must have its reward. 1t
must sooner or later seach its eliminating
point We do not intend here to point ont the
me- hod Of preventing it or remedy for its
cure. vt present we shall confne ourselves to
the ia ct that such q state Of things exists as
viii @inS upon US all the evils which nave !
heretofore so often followed such an artificial
expansion Of public and private credit. The |
large receipts Of gold from California and Aus |
tralia have for sometime past and continue to
lull the public mind into fancied security.
It is argued that SO long as the supply Of pre-
cious metals continues undimnished there can
be no danger Of a revulsion. This is danger
GUS delusion. The receipts Of gold in large
sums will only hasten the collapse and make
more disastrous when it comes All the I'M
mined gold Ia the world would not restore pub
lie confidence when once widely Frustrated.
Credit both public and private, is very
delicate, sensitive element to deal with.
We may for years go on prosperously. All the
future may be full Of promise. All may be
sunshine and not a solitary spec be visible in
the financial or commercial horizon, whea sud
denly dense black cloud may obscure the
whole, and gloom ard despair be visible where
but moment before all was confidence and
hope. We have known panics to take posses
sion of the public mind as instantaneously as
summers cloud will shut out the midday sun
The immediate cause is seldom or never clearly
shown. but It's effect is whitening.
When credit is enormously inflated the imam
cial and mercantile systems Of the world are
in an unhealthy, diseased condition, and we
know not what moment it may take an acute
form, and prove fatal to many whose condition
particularly subjects them to its influence. That
we arc approaching such a state Of things with
rapid strides no one who cooiiy and calmly