The Athens post. [volume] (Athens, Tenn.) 1848-1917, 1857-12-18
VOL. X.---N0. 4S2.

/ tACtpUOu VI tuo OauhS VI AVu'S'"he1
State bank throughout the Union has been
required by its charter to keep this or any
other proportion Of gold and silver compared
with the amount Of its combined circulation
and deposites. What has been the conse-
Quence! In a recent report made by the
Treasury Department on the condition OF the
banks throughout the different States, ac-
cording 10 returns dated nearest to January,
1857, the aggregate amount Of actual specie
in their vaults is S5S, S,349,s3s Of their circu-
lation S2l4,77S,S22 and Of their deposites
$230,35l 1852. Thus it appears that these
banks, in the aggregate, have considerably
less than one dollar in seven Of gold and sill
yer compared with their circulation and de-
postes. 1t was palpabe, therefore, that tho
very first pressure must drive them 10 sus-
pension, and deprive the people of convert.
bic currency, with all its disastrous conse-
quences. 1t is truly wonderful that they
should have so long continued TO preserve
their credit, when demand for the payment
of one seventh of their immediate liabilities
would have driven them into insolvency.
And this is the condition of the banks, not
wthstanding that -four hundred millions of
gold from California have flowed in upon US
within the last eight years, and the tide still
continues TO flow. Indeed, such has been the
extravaganza of bank credits that the banks
now hold considerably less amount Of spe-
Gle, either in proportion to their capital or to
their circulation and dcposites combined, than
they did before tho discovery of gold in Cali
fornia. Whilst in the year l64S the spece
in proportion 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 l84S the specie
was equal, within very small fraction, TO
one dollar in FIVE of their circulation and de-
posites in 1857 1t is not equal TO one dollar
in seven aud half of their circulation and
depostes.
From this statement it is easy to account
for our financial history for the last forty
years 1t has been history of extravagant
expansions in the business of the country, fol-
lowed by ruinous contractions. At shcces-
sive intervals the best and most enterprising
men have been tempted to their ruin by ex-
cessive bank loans of mere paper credit, ex.
citing them to extravagant importations OF
foreign goods, wild specul.tions, and ruinous
and demoralzing stock gambling. When the
crisis arrives arrive it must, the banks can
extend no relief to the people. In vain
struggle to redeem their liabilities in specie,
they are compelled to contract their loans
and their issues and at last, in the hour OF
distress, when their assistance is most needed,
they and their debtors together sink into in
solvency. 1t is this paper system Of extrava-
CANT 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 regulat-
ed which has prevented us from competing
in our own markets, with foreign mannfac-
turers has produced extravagant importa'
tions, and has counteracted the effect OF the
large incidental protection afforded to our do
nestle manufactures by the present revenue
tariff But for this the branches Of our manu-
features composed OF raw materials, the pro-
ducetion Of our own country-such as cotton,
irou and woollen fabrics-would not only
have acquired almost exclusive possession OF
the home market, but would have created for
themselves foreign market throughout the
world. Deplorabe however, as may be our
present financial condition, We may yet in
dulge in bright hopes for the future. No other
nation has ever existed which could have en-
dured such violent expansions and contrac-
tions of paper credits without lasting injury3
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-
ments, and may even occasion us speedily to
forget the lesson which they have taught.
In the mem time it is the duty of the Gov.
ernment, by all proper means within its pow
er, TO aid in alleviating the suffering Of the
people occasioned by the suspension OF the
banks, and to provide against recurrence OF
the same calamity. Unfortunately, in either
aspect of the case il can do but little Thanks
to the Independent treasury, the Government
has not Suspended payment, as it was COM
PEELED to do by the failure Of the banks in
1887. 1t will continue to discharge its liza
bilities to the people in gold and silver. Its
disbursements in coin will pass into circula.
tion, and materially assist in restoring sound
currency. From its high credit, should we De
compelled to make a temporary loan, 1t can
be effected on advantageous terms. This.
however, shall, if be avoided; but, II not, then
the amount shall be limited to the lowest
practicable sum.
| have, therefore determined that, whilst
no useful Government works already in pro-
gress shall be suspended, new works. not al
ready commenced, will be postponed, If this
can be done without injury to the country
Those necessary for its defence shall proceed
as though there had been no crisis in our mo-
netary affairs.
But the FeueThl pOFeruntHb chHhVt wv
much to provide against recurrence OF ex.
isting evils Even IL insurmountable consti-
tutional objections did not exist against the
creation Of q National Bank, this would fur
nish no adequate preventive security. The
history of the last Bank of the United States
abupdantly proves the truth Of this assertion.
Such bank could not, if it would, regulate
the issues and credits ef fourteen hundred
State banks in such q manner as TO prevent
the ruinous expansions and contractions in
our currency which afflicted the country
throughout the existence of the late bank, or
secure us against future suspensions. In 1928
an effort was made by the Bank Of England
TO curtai the Issues of the country banks un-
der the most favorable circumstances The
paper currency had been expanded to ruin
Gus extent, and the bank put forth all its
mower to contract it in order to reduce pricos
and restore the equilibrium OF the foreign
exchanges II accordingly commenced sys-
fem If curtailment Of its loans and issues, in
the vain hope that the jont.siock aud private
banks of the kingdom would be compelledto
follow 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 effect
ed by the Bank Of England lin ls25) was
more than made up by the issues OF the coun-
try banks" =,
But Bank Of the United States would
not. if IL could, restrain the issues and loans
of the State banks, because its duty rs reg
ulator of the currency must often be ~ direct
- a.., ..;,L ,ha ;,,m.diate interest OF its