The Hillsdale standard. [volume] (Hillsdale, Mich.) 1851-1909, 1857-12-15
there had been no crisis inaour monetary nf.

fairs.
But the federal government cannot do
much to provide against recurrence of
existing evils. Even il insurmountable
constitutional objections did not exist
against the creation of National Bank,
this would furnish no adequate prcvcnta-
tive security. The history Of the last Bank
of the United States abundantiy proves
the truth Of this assertion. Such bank
could not, if il would, regulate tho issue
and credits of fourteen bundled State
Banks in such manner as to prevent the
runious expansions and contractions in our
currency wich afflicted tho country through
out the existence of the late bank, or Sc
cure us against future suspensions.
In 1925 an effort was made by the Bank
of England to curtail the issue of the coun-
try banks under the most favorable circum.
stances. The paper currency had been
expanded to a runious extent, and the bank
put forth all its power to contract it, in
order to reduce prices and restore the equi-
librium of the foreign exchanges. 1t ac-
cordingly commenced system of curtail-
ment of its loans and issues, in the vain
hope that the joint stock and private banks
of the kingdom would be compelled to fol-
low its example. 1t found, however, that
as it contracted they expanded, and at the
end Of the process to employ the language
of very high official authority, "whatever
reduction of the paper circulation was ef.
fected by the Bank of England lin ls25)
was moro than made up BY the issue Of
the country banks"
But a Bank Of the United States would
not, if it could, restrain the issues and
loans of the State banks, because its duty
as regulator of the currency must often
be in direct conflict with the immediate
interest of its stockholders. If we expect
one agent to restrain or control another,
their interests must, at least in some degree,
be antagonistc. But tho directors of
Bank of the United States would feel the
same interest and the same inclination with
the directors of the State banks to expand
the currency, to accommodate their favoites
and friends with loans, and TO declare large
dividends. Such has been onr experience
in regard to the last bank.
After all, we must mainly rely upon
the patriotism and wisdom of the State for
the prevention and redress of the evil. If
they will afford us real specie basis for
our paper circulation by increasing the de-
nominations of bank notes, first to twenty,
and afterwards to fifty dollars; if they vii
require that the banks shall at all times
keep on hand at least one dollar of gold
and silver for every three dollars Of their
circulation and deposits: and if they will
provide by self-cxccuting encampment
which nothing can arrest, that the moment
they suspend they shall 60 into liquidation.
l believe that such provisions, with week
ly publication b. each bank Of statement
of its condition, would go far to secure US
against future suspension of specie pay
ments.
Congress, in my opinion, possesses the
power to pass uniform bankrupt law APP
plicable to all banking institutions through
out the United States, and strongly re-
commend IFS exercise. This would make
it the irrcyersible organic law of each banks
cxistancc, that suspension Of specie pay
ments, shall produce its civil death. The
instinct Of self-rcnervation, would then
compel it. to perform its duties in such q
manner as TO escape the penalty and pre-
serve its life.
The existence of banks, and the crcula-
| ton of bank paper ale so Unidentified with
| the habits Of our habits that they
they cannot at this day, be suddenly abol-
ishcd without much immediate injury to
the country. If we could coninc them TO
their appropriate sphere, and prevent them
from administering TO the spirit Of wild
and reckless speculations by extrgvagant
loans aud issues, they might be continued
with advantage to the public.
But this say, after long and much re-
Election: if experience shall prove it TO be
impossible to enjoy the facilities which well
regulated banks might afford, without at
the same time suffering the calamitics which
the excesscsscs Of the banks have hitherto
inflicted on the country, it would then be
far the loser evil to deprive them altogeth-
or Of the power TO issue paper currency
and copfne them TO the functions Of bank
Of deposit and discount
Our relations with foreign governments
are, upon the whole, in satisfactory con-
dition.
The diplomatic difficulties which existed
between the government and the United
States, and that of Great Britain and the
adjournment Of the last Congress, have
been happily terminated by the appoint
ment of British ministry 10 this country,
who ha, been cordially received.
Whilst it is greatly to the interest, as |
am convinced it is the desire, Of the gov
eminent and people of two countries TO be
on terms Of intimate friendship with each
other, it has been our misfortune almost al
ways to have had some irritating, if not
dangerous, outstanding question with Great
Britain.
Since the origin of the government We
have been employed in negotiating the trea-
ties with that power, and afterwards dis
cussing their true inserest and meaning
In this respect, the convention of April 10
1850, commonly called the Clayton and
Bulwcr treaty, has been the most unfortu.
nate of all; because the two governments
place directly opposite and contradictory
constructions upon its first and most impor
tant article. Whilst, in tho United States
we believed that this treaty would place
both mowers unon an exact equality by the