The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-05
Financial Troubles Ahead.

Peabody 4 Co., of London, rather increase than
diminish the mystery of the affair. Here was
an American banking house, which the general
panic and almost unveral suspensions here had
plunged into serious difficulties; without pre-
tending to any particular knowledge of the
business of the house, it may be safely assumed
that the bulk of its assets were American. either
| American paper which had come into its pos
session in return for credits granted to import
err here, or American railway securities, taken
for the purpose of re-sellng them in Europe:
both Of these classes Of assets were known to be
liable to severe depreciation, the one through
probable fall in the value of merchandise, the
other through decline in the price of railway
securities; yet within all probability-no-
thing but this to offer, George Peabody gets ac-
commodation to the enormous amount of five
millions of dollars at once. One is irreslstibly
impelled to the conclusion that the trade of
England and the Bank itself were not in con-
di;ion to allow such house as Peabody to go
down; that Manchester, for instance, would
have suspended bodily if he had broken and
that the government Of England may have been
| inpelled by fears for the consequences upon
tie working classes to give the bank the bene-
fiji OF counsels, which were of course equivalent
| to commands.
| Such a spectacle as this-an American citi-
zen, private merchant and banker, forcing
the Bank of England to forfeit its charter, and
| the government to put five millions at stake,
rather than let him fail, is certainly unprece-
dented in financial history. Ii beggars all the
stories that have ever been written about the
wealth of the middle age merchants who could
buy Kingdoms, or the power of the Rothsehids
who have dictated treaties This American
citizen seems to be the master Of England
hank, government, trade and all.
But of truth, when we come to look into
the condition of the governments, and great
financial institutions of Europe, the power Of a
great banker 10 affect national interests and
the terrible anxiety of governments to suppress
the panic at any cost no longer seem such very
singular and inexrlicable affairs. With very
few exceptions all the States of Europe are
practically bankrupt; the first approach to-
ward liquidation would ruin half Of them. The
enormous sums they owe can never be paid; and
the capital being absolutely lost TO the lender,
his propcrty-namely, the right to q certain
annual interests precarious in proportion to
the instability of political affairs. England for
instance owes in round figures four thousand
millions of dollars; France ssy-in round
hgures-one thousand seven hundred and fifty
millions. OF course these huge sums can never
be paid. 1t is not intended they should be.
The interest is all people want. This Is all
very well; but what is to prevent some political
party efecting a revolution some day and
repudiating these debts? True, the English and
French are honest people, and have never done
such thing: but, after all, reputation of the
national debts was favorite doctrine of the
chartists in England, and the socialists In
France, and who knows when these parties may
not control the governments of their respective
countries? All the debts Of the minor States
are in proportion
Russia owes. goo
Austria. IIsoooooo
span 90, 900
n"lhhd' s $1,000,
Prussia. lsoooo,oV
These debts seem small in comparison with
that Of England; but how enormous in COMPARE
son with ours, say s36,OOO,O00, all told! Take
| 100000, on o poor exhausted country, without
produce, or manufactures to speak of, and with.
out commerce; near $50 head on every Span
lard. man, woman and child-why tits nearly as
much as they would fetch if they were sold in
the slave market on the Barbary coast
II is but too evident that in very many cases.
population will be, not choice. Dat a neces-
sity Some day, how near or nov iar d ,taat 40
man can tell. Revolutionary tide will sweep over
J Z ar aed 'pe ,he1 ' as II wiped out the
IHa.e- ah..h H.,e. aat..n once paid to
L. u.a.4,1l HI ao aue lien villages,
t.afs I'LL p,4 aa. ",d % udal
| iUlGs.
Economistsma thcorize as they please about
systems Of national credit: but no nation-any
more than an individual can run into debt to
such an amount that ii can never hope to pay
the principal, without becoming practically and
radically insolvent. And though forms of dcs-
potism may avail for a time to circumvent the
laws Of trade, aud avert the natural symptoms
Of insolvency, those symptoms can only he
averted for time; they recur again and again
with unccasing force now, brief imperial let
ter may quell the storm, now. rise in the
rate Of discount; but a time must and does
come when no such futile palliatives can be of
the slightest benefit; when no remedy that is not
radical will DC noticed for moment; and when
at last an issue il fatty whether liquida-
ton is possible, and how! Such events as the
suspension of The Bank Of England in order to
save Peabody look like precursors of such
crisis; let US hope that the Bank of England is
better able to carry through the British insol-
vents than the Bank of the United States was
10 carry through those of this country.
TnE ADVERTISEMENT DEnr STuL Duf. Mr.
Ticmann has not as yet sent ~ the money for
advertising his paint mandatory II he does
not forward IA soon wo shall have fo cl4arup in