Columbia Democrat and Bloomsburg general advertiser. [volume] (Bloomsburg, Pa.) 1850-1866, 1857-12-12

always 10 keep on mana golu ana Silver
equal to one third of its combined circula.
ton and deposits. If this proportion was
no more than sufficient TO secure the con-
vertibility of its notes, with the whole Of
Great Britain, and to some extent the
continent OF Europe, as field for its cir.
culation, rendering it almost impossible
that q sudden and immediate run to a
dangerous amount should be made upon it,
the same proportion would certainly be
insufficient under our banking sys en-
Each of our fourteen hundred banks has
but limited circumference for its circula.
ton, and in the cours5 of very few days
the deposi ors and note holders might
demand from such bank a sufficient
amount in specie to compel it to suspend,
even although it had coin in its vaults
equal to one third of its immediate liabili-
ties. And yet 1 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 proportion of gold and silver com.
pared with the amount of its combined
circulation and deposits. What has been
the consequence In recent report made
by tho Treasury Department on the con-
dition of the banks throughout the different
States, according to returns dated nearest
to January, 1857, the aggregate amount
of actual specie in their vaults is S5S, ,3i0,-
s3S, of their circulation S2l377S ,S22, and
of their deposits 1896, ,35l ,3l2, 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. 1t was
palpablc, therefore, that the very first
pressure must drive them to suspension,
and deprive the people of convertible
currency with all its disastrous consequen-
ces. 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 solvcDcy.-
And this is the condition of the banks,
notwithstanding 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 extravagancc Of bank
credits that the banks now hold a consid-
cradle less amount of specie, either in
proportion to their capital or to their cir
culation and deposits combined, than they
did before the discovery of gold in C,lifor.
mia. Whilst in the year ls4s their specie
in proportion to their capital was m re than
equal to one dollar for four and hall, in
1857 it does not amount to one dollar for
every six dollars and thirty-.hrec cents of
their capital. In the year S4s the specie
was equal within very small fraction to
one dollar in FIVE Of their circulation and
deposites; in 1857 it is not equal to one
dollar in seven and half OF their circuli-
tion and deposites.
From this statement it is easy to account
for our financial hist ry for the last forty
years. 1t has been a history of extrava.
CANT exp nsion in the business Of the
country, followed by runous contractions,
At successive intervals the best and M st
cutcrprisiing men have been tempted to
their ruin b. excessive b,nk loans .Sf e incrc
paper credit exciting them TO extravagant
importalions Of foreign goods, wild spccu-
latons, aDd ruinous and demoralizing stock
gambling. When the crisis arrives, as
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 contact 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 iuto insol-
vency.
1t 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
manufacturers, has produced extravagant
importations, and has counteracted the eff
feet of the large incidental protection az
fordcd to our domestic manufactures BY
the present revenue tariff. But for this
the branches Of our manufactures composed
Of raw materials, the production of our
own country-such as cotton iron, and wool
en- fabrics would not only have acquired
almost exclusive possession of the home
market, but would have created for them
selves foreign market throughout thC
world.
Doplorable, however, as may be our
present fnanci ! condition, we may yet in
dulgo in bright hopes for the future. Nc
other nation has ever existed, which coulC
have endured such violent expansions and
contractions of paper credits without last
ing injury; yet the buoyancy Of youth, thu
energies of our population, and the spiri
which never quails before difficulties, will
enable us soon to recover from our presen
financial embarrassment, aud may evel
occasion us speedily to forget the lessor
which they have taught,
In the meantime it is the duty OF til
Government, by all proper means within il
power, to aid in allcviating the suffering
of the people occasioned by the suspension
Of the banks, and to provide against re
currence of the same calamity. Unlortu
nately, in either respect of the case, it ca
do but little. Thanks to the indcpendeI
J treasury, the Government has not suspend
, ed payment, as it was compelled to do b