Sunbury American. [volume] (Sunbury, Pa.) 1848-1879, 1857-12-12

sure must drive them TO suspension, and de-
prive the people OF a convertible currency
with all its disastrsus consequences.
II is truly wonderful that they should have
so long continued to preserve their credit,
when a demand for the payment OF one.se-
yentb of theE Immediate liabilities would
have driven them into insolvency. And this
is the condition Of the banks, Notwithstanding
that four hundred millions Of gold from Cali
fornia have flowed In upon us within the last
eight years, apd the tide continues to How
Indeed such has been the extravagance OF
bank credits that the banks now hold con-
siderably less amount Of specie either in pro-
portion to their capital or TO their circulation
aud deposits combined, than they did before
the discovery Of gold in California.
Whilst in the year 1913 their specie in pro-
portion TO their capital was more than equal
to one dollar for four and half, in 1857 it
does not amount to one dollar for every Six
dollars and thirty three cents Of their capital.
In the year l648 the specie was equal within
very small fraction to one dollar in seven
aud half to their circulation and deposits.
a From this statement it is easy to account
for our financial history for the last forty years
II has been history Of extravagant expan-
sipns ir the business Of the country, followed
byrunons contractions. Atsuccessve inter-
been,tempted TO their ruin by excessive bank
loansof mere paper credit, exciting them to
extravogant importations Of foreign goods,
wild speculations, and ruinous and demoral-
zing stock gambling. Whentbe crisis arrives
as arriveAit must the banks can extend no
relief TO The people. In vain struggle to
lsredeem their liabilities in specie, they are
compeiedto contract their loans and their
issues; end at last in the hour Of distress,
when their assistance is most needed, they
and their debtors together sink into insol-
vency. ~
1t is this paper system Of extravagant ex-
! pansion raising the nominal price Of every
| article FAR beyond its real value when compar-
ed with the cost Of similar nrticles in conn
tries whose circulation is wisely regulated,
which hus prevented us from competingin our
own markets with foreign manufacturers, has
\ produced extravngaDt importations, and has
4 counteracted the effect Of The large incidental
/ protection afforded to our domestic manulac-
| lures by the present revenue tariff, But Tor
| this the branches of our manufactures COM
| posed of raw materials, the production OF our
| own country-such as cotton,iron and wool
en- fabrics-would not only have acquired al
most exclusive possession of the home market
| but would have created for themselves for
| egn market through the world.
| Deplorable, however, as may be our pre-
sent financial condition, we may yet indulge
| in bright hopes for the future. No other ma
| ton has ever existed which could have endur.
ed 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 difficulties, will enable US soon to re
cover from our present financial embarrass
ment, and may even occasion US speedily tt
forget the lesson which they have taught.
j In the mean time it is the duty OF the gov
1 ernment, by proper means within its power
to aid in alleviating the sufIerings Of the peo
pie occasioned by the suspension Of the banks
: aud TO provide against recurrence Of th'
same calamity. Unfortunately in either as
pect of the case it can do but little. Thank
to the independent treasury, the government
has not suspended payment, as it was com
PEELED to do by the failure Of the banks il
1887, 1t will continue to discharge its liza
biities to the people in gold and silver.
It's disbursements in coin will pass into cir
culation, and materially assist in restoring
sound currency. From its high credit, sboul
we be con, 1elled to make temporary loan
it can be effected on advantageous terms
This however, shall, if possible, be avoided
but, if not, then the amoaut limited to the
lowest practicable sum.
/ have therefore, determined that whilst
useful government works already in progres
shall be suspended, new works, not alread
commenced, will be postponed, if this can b
done without injury to the country. Thos
necessary for its defence stall proceed a
though there had been no crisis in our none
tary affairs.
But the federal government cannot d
much to provide against recurrence OF exi'
!, ting evils Even if nsurmountable const
: tutional objections did not exist against th
creation ofa National Bank, this would ful
r nish no adequate preventive security. Th
: history of the last Bank OF the United State
u abundantly proves the truth Of this assertion
h Such Bank could not, if it would, regulat
n the issues and credits Of fourteen hundre
State banks in such manner as to prever
r the runous expansions and contractions
: our currency which afflicted the countr
throughout the existence Of the late bank, {
l. secure us against future suspensions.
J. In 1926 an effort was made by the Bank {
e England to curtail the issues OF the countT
e banks undor the most favorable circuu
stances. The paper currency had been e.
q panded to ruiDous extent, aud the Bank pi
4 forth all its power to contract it in order
II reduce prices and restore the equilibrium
8 the foreign exchanges. 1t accordingly cor
q menced system Of curtailment of its LOAF
!. and issues, in the vain hope that the join
d stock and private banks of the kingdom wou
n be compelled TO follow its example. 1t foun
however, that as it contracted they expande
and at the end Of the process, to employ Il
o language Of very high official authorit
% "whatever reduction of paper circulation vi
c effected by the Bank of England lin lS2
% was more than made up by the issues OF 4
Ie country banks"
" But Bank Of the United States would M
Il if it could restrain tue issues and loans OF q
% State banks, because its duty as o regulat
* of the currency must often be in direct CO
X het with the immediate interest Of its stoc
holders. IT We expect one agent to restra
Y. or control another, their interests must,
ly least III some degree. be antagonistic. b
ed the directors Of Bank Of the United Stat
nt would feel the saI.e interest and the sat
of inclination with the directors Of the Sta
be banks to expand the currency, to acco
Id modate their fsYortes and friends with LOAF
ed and TO declare large dividends. Such b
On been our experience in regard TO the ID
IN bank
of After all, we must mainly rely upon /
Ii. patriotism and wisdom Of the States for /
N, prevention and redress of the evil. IL tn
en- will afford us a real specie basis for our paJ
rt | circulntian nv ineraaainp tho dannmina Al