The Ashland union. [volume] (Ashland, Ashland County, Ohio) 1854-1868, 1857-12-16

citation of bank notes In England, which
1 is to considerable extent paper-money
country, though vastly behind our own in
this respect, it was deemed advisable, an
I terror to the act of Parliament of 1874,
Which wisely separated the issue of notes
from he banking department., for the
Bank of England always to keep on hand
gold and silver equal to one, third of It's
=cornbined circulation and deposits. If this
! proportion was no more than sufficient to
secure the eoRvertibility of its notes, with
the whole OF Great Britain, aud to some
extent the continent of Europe as field
/ for its circulation, rendering it almost i'm
possible that sudden and immediate run
| TO dangerous amount should be made
| upon the same proportion would GER
! tainly be insufficient under our banking
system. Each of our fourteen hundred
banks has but limited circumference for
its circulation, and in the course of a very
/ few days depositors aud note Holders
IN ght demand from such bauk a sufi-
cieat amount in specie to compsl it to sus-
pend, even though it had coinin its vaults
equalt one third of its Immediate liabil-
ities. And yet [ am not aware, with the
exception of the banks of Louisiana, that
any State bank throughout the Union has
been required by its charter to keep this
or any other proportion of gold and silver
lation and deposits. What has been the con-
sequence? In recent report made by tie
Treasury Department on the condition of
the Banks throughout the different States,
according to returns dated nearest to jan
uary, 1857, the aggregate amount of ac-
tua specie in their vaults is SIS, ,349, ,936;
of their circulation, $2l4,778, 1922, aud of
their deposits, $3.50, 351 1852. Thus it
appears that these banks in the aggregate
have considerably less than one dollar in
seven of gold and silver compared with
their circulation and deposits. It was
| palpable, therefore, that the very first
pressure must drive them to suspension,
and deprive the people of convertible
| currency with all its disastrous conse-
| quences. It is truly wonderful that they
! should have so long continued to preserve
| their credit, when a demand for the pay
ment of one seventh of their immediate
| Liabilities. would have driven them into
| insolvency. And this is the condition of
the banks, Notwithstanding that four hum
| dred millions of gold from California have
| flowed in upon US in the last eight years,
and the tide still continues to flow. In.
I-deed, such has been the extravagance of
bank credits that the banks now hold a
considerably less amount of specie, either
IN proportion to their capital or to the
circulation aud deposits combined, than
| they did before the discovery of gold 10
! California Whilst In IS4S their specie
in proportion to their capital was more
than equal to one dollar for every six dol
lars and thirty three cents of their capital
In the year 1848 the specie was equal
within very small fraction to one dollar
in five of their circulation; and deposits
In 1857 it is not equal to one dollar in
seven and half of their circulation and
deposits.
+ From this statemest it is easy to ae,
count for our financial history, for the last
forty years. 1t has been a history of the
| the country, followed by runious con-
best and most enterprizing men have been
tempted to'their ruin by excessive bank
loans of mere paper credit. exciting them
to extarvagebt importations of foreign
goods, wild speculations and ruinous
and demoralizing stock gambling. When
the crisis arrives, as arrive it must, the
bank can extend no relief to the people
In vain struggle to redeem their labil-
tiles in specie they are compelled to con-
tract their loans, and their issues and at
last, in The hour of distress, when their
assistance is most needed, they aud their
debtors sink together into insolvency.
= It is this paper system of extravagant
expansion, raising 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 our own markets with
foreign manufactures Has produced ex-
travagant i'm mportations, and has counter
acted the effect of the large incidental
protection afforded to our domestic man
ufactures by the present revenue tariff =
But for this the branches of our manu-
factures composed of raw materials, the
production of our own country-such IS
cotton, iron and woolen fabrics-would
not only have acquired almost exclusive
possession of the home market, but, would
have created for themsj Ives foreign
market throughout the world.
Dcplorable, however, as may be our
present financial condition, we may yet
indulge in bright hopes for the future. No
other nation has ever existed which could
have endured such violent expansions
and contractions Of paper credits without
lasting injury; yet the buoyancy of youth,
the energies of our population, and the
spirit which never quails before difficult
ties, will enable as soon to recover from
our present financial embarrassments, and
may even occasion US speedily to forget
the lesson they have taught.
In the meantime, it is the duty of the
Government, by all proper means, within
its power, to aid in alternating the suffer-
ings of the people occasioned by the sus-
pension of the banks, and to provide
against the recurrence of the same calam-
ity Unfortunately, in either aspect of
the it case, can do but little.
Thanks to the Independent Treasury,
the Government has not suspended pay
ment, as it was compelled to do by the
failure of the banks in 1887. 1t will con-
tinue to discharge its liabilities to the