Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1857-12-08

pie In vain struggle to redeem their liabilities IN
specie they compelled to contract their loans ana ne
issues and at last in the hour of Distress when their
assistance most needed they and their debtors together
sink into insolvency.
1t this paper system Of extravagant expansion rails
ing the nominal price of every article far beyond Its real
value when compared with the cost OF similar articles In
countries whose circulation is wisely regulated which
has prevented Us from competing in own markets
with foreign manufacturers has produced extravagant I'M
portaons and has couneracted the effect OF the large
incidental protection afforded to domestic manufac
lures by the present tariff But for this the
branches of our manufactures composed of materials
the production of countrysuch as cotton non,
and wooen fabrics-would not only have acquired al
most exclusive possession of the home market but would
have created for themselves foreign market throughout
the world.
Deplorablc, however, may DO present financial
condition we may yet indulge in bright hopes for the fu
ture No other nation has existed which could
have endured such violent expansions and contracon OF
paper credits without lasting injury yet the buoyancy OF
youth the energies of population, and the spirit
which never orails before difficulties will enable soon
to recover from our present financial embarrassment and
may even occasion us speedily to forget the lesson which
| they have taught.
In the mean time it Is the duty Of the government by
ell propot neaus within its power to aid In aeVaung
the suerngs of the people otcasoned By the Suspension
of the banks, and to provide against recurrence OF
the same calamity Unfortunately in either aspect u
the case can do but little Thanks to the lnoepeho
en treasury the government has not suspended payment
as compelled to do by the failure of the banks in
1887 1t will continue to discharge its liabilities to the
people in gold and silver Its disbursements in coin will
pass into circulation and materially assist in restoring
sound currency From its high credit, should we be
compelled to make temporary loan, it can be effected
on advantageous terms. This, however, SHALL if posi-
ble be avoided but, if not then the amount shall be
| limited to the lowest practicable sum.
have, therefore, determined that whilst no useful
government works already in progress shall be suspended
works not already commenced, will be postponed
this be done without injury to the country Those
necessary for its defence shall proceed as though there
had been crisis in our monetary affairs.
But the federal government cannot do much to provide
against recurrence of existing evils Even If nsur-
mountble constitutional objections did not exist against
the creation of National Bank th, would furnish no
adequate preventive security The history of the last
Bank of the United States abunanty proves tho truth of
this assertion. Such bank could not if it would regu-
late the issues and credits of fourteen hundred State banks
in such to prevent the ruinous expansions
and contractons in currency which afflicted the coun
ry throughout the existence of the late bank secure
against future suspensions. In 1925 an effort was
made by the Bank of England to curta tho issues of the
country banks under the most favorable circumstances
The paper currency had been expanded to ruinous
tent and the Bank put forth all its power to contract it
in order to reduce prices and restore the equilibrium OF
the foreign exchanges 1t accordingly commenced sys
of crtament of its loans and issues in the vain hope
that the ointstock and private banks OF the Kingdom
|
however that as it contracted they expanded and at the
end of the process to employ the language OF very high
official authority, 'whateyor reduction OF the paper cir
culation effected by the Bank OF England in lSz5)
was more than mado up by the issues OF the country
banks"
But Bank of tho United States would not if it could,
restrain the issues and loans OF the State banks because
its duty regulator Of the currency must often be ID
direct conflict with the immediate interest of its stock
holders If expect one agent to restrain or control
another their interests must at least in degree, be
antagonatc But the directors of Bank of the United
States would feel the interest and the same nclina-
ton with the directors of the State banks to expand the
currency to accommodate their tavortes and friends
with loans, and to declare large dividends. Such has
been our experience in regard to the last bank.
After ALL must mainly rely upon the patriotism and
wisdom of the States for the prevention and redress OF the
evil If they will afford real specie basis for our
paper circulation by increasing the denomination of bank
notes. first to twenty and afterwards to fifty dollars if
they will require that the banks shall at all times keep
hand at least dollar of gold and silver for every
three dollars of their circulation and deposes and
they will provide by seexecuting enactment, which
nothing arrest that the moment they suspend they
shall go into liquidation, believe that such provisions,
with weekly publication by each bank of statement OF
its condition. would go far to secure us against future
suspensions OF specie payments
Congress- in my opinion possess the power to pass a
uniform bankrupt law applicable to all banking institu
tions throughout the United States and strongly rec
ommend its exercise This would make it the rrevers
bic organic law of each bank existence that suspension
of specie payments shall produce its civil death. The in
stinct of epreservaton would then compel to perform
its duties in such to escape the penalty aud
preserve its life.
The existence of banks and the circulation of bank
paper are identified with the habits of people, that
they cannot at this day be suddenly abolished without
much Immediate injury to the country. If we could con-
fine them to their appropriate sphere, and prevent them
from administering to the spirit of wild and reckless
speculation by extravagant loans and issues they might
bn cnnfipn Ixvith hofiy DtaUp tn he publ
But this say, after long and much reflection: If expe
rience shall prove it to be impossible to enjoy the c
tics which welreguated banks might Afford without at
the time suffering the calamities which the excesse
the banks have hitherto inflicted upon the country it
would then be far the lesser evil to deprive them alto
gether of the power to issue paper currency and conns
them the functions of banks of depose and discount
Our relations with foreign governments upon the
whole in a satisfactory condition.
The diplomatic difficulties which existed between the
government of the United States and that of Great Brit
ain at the adjournment of the last Congress have been
happily terminated by the appointment of British min
lister to this country, who has been cordially received
Whilst it is greatly to the interest, as am convinced
it is the sincere DESIRE of the governments and people
of the two countries to be terms of Intimate friend
ship with each other it has been misfortune almost
always to have had irritating if not dangerous, out
standing question with Great Britain.
Since the origin of the government we have been en-
poyed in negotiating treaties with that power and after
wards in discussing their true intent and meaning. In
this respect the convention of April 10, 1850 commonly
called the Clayton and Bulwer treaty has been the most
unfortunate of all because the two governments place
directly opposite and contradictory constructions upon its
first and most important article Whilst, in the United
States we believed that this treaty would place both
powers upon exact equality by the stipulation that
neither will ever occupy ortify colonize or
assume or exercise any dominion over, any part of
Central America it oontended by the British govern
ment that the true construction of this language has
left them in the rghtfu possession of all that portion
of Central America which in their occupancy at the
date of the treaty in fact that the treaty is virtual recog
pton on the part the United States of the right of