The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-09

proposition would be more startling but not more unrea
sonabe than when applied to our Intercourse with those
countries between whom aud ourselves a commerce has
grown up from small beginnings present large di.
mensions This has been accomplished through a policy
inaugurated by own government and which has
handed the approval Of minds throughout the
world Other countries have In their legislation Of late
years manifested by reducing their duties upon imports
desire operate in the work OF throwing those
shackles upon the freedom OF commerce which false
theories have placed upon it, II would present strange
spectacle the United States should be the first to
meDce a retrograde movement
The sentiment among our people in favor OF free com
merca intercourse manifested In their domestic az well
fsreign policy The strong feeling in the public mind
for the extension Of territorial limits generally at
tributed TO the desire for more land That 1t
operates extent is freely admitted but such
cause fails in application to those where the
QUESTION Of territory brings with 1t no proprietary
title 10 the land And yet the public sentiment for &C
quiring territory, where every foot of il held by pr
vate titles, is decided as in any other case rs &C
counted for satisfactorily only upon the theory that,
our territorial limits extended enlarge the II
free trade opening markets for the productions of
industry untfammelled with those restraints which
restrictive international policy has imposed ,.....
which have seriously affected manufacturing inter
est attributable TO the want Of high protective system
In the policy which the cover nment has adopted Of allow
ing many OF the raw materials used by them 10 in,
either free of duty at low duties in the ncd entail pro-
lection which tariff laid for the purpose Of revenue gives
hemn the increasing consumption of their productions
brought about by the general prosperity Of the country
they will find the most ample encouragement that could
reasonably be expected Or desired like all other inter
changes Of the tariff, and from those fluctuations IN bust
which flow from causes wholly distinct and separate
from the tariff question What they need is steady prices
sound CURRENCY and protection against the runous effects
Of expansions in the credit system From free and un
restricted commerce with the world interest in our
country would derive more certain and permanent bene
ft than the manufacturers.
Rejecting the proposition TO raise the tariff measure
Of relief looking to the probable receipts and expen
dures for the present and next years. change Is
commended in the act Of March 1857 at this time The
present tariff not regarded as perfect-far from It, 1t
has, however been in operation less than six monthsa
length OF time too short to judge OF its workings even I'M
der the most favorable circumstances. This fact in
nection with the revuson in business, makes il wholly
mpracticabe to form correct judgment upon its merits
There changes which should be made soon as
be done with proprety return to the decimal division
in the rates Of duties, more accurate classified
ton of various articles, and other amendments, would
greatly improve the law, even should be found by
experience unnecessary make any radical change 10 s
general provisions The proprety OF posponng any
ton upon the subject until an opportunity has offered
Of testing its general mers seems to admit OF no serious
doubt
Returning the question Of relief which is expected
rom the government it becomes necessary to inquire
INTO the cause of the present revuson as preliminary to
the consideration OF proper remedy for it, Public OPT
Mon generally holds the banks responsible Tor all our EN-
barrassments. The true 70 be found in the undue
expansion of the credit system The banks constitute an
important part of that system; but there other ee
entering into IL, which, equally with the question
Of the banks, demand public consideration.
Credit, confined to its legitimate functions, is the repre-
sentative Of capital and when used with in that limit may
extend and nvgorate trade and business when ceases
ell
speculation and introduces ali sound state OF things IN
the business OF the country II this undue expansion OF
credit which has brought The country to its present embar
easements The extension Of bank credits and the
issue Of bank notes. s part and livery important part
of this undue expansion spirit Of speculation being
created demand is made upon the banks for the Of
their credit and yielding to the pressure they respond by
the increased issue OF their notes and by engng their
discounts The extent to which the banks have arged
their credit beyond its proper limits is not TO be measure
alone by the of their circulation AT the time the
New York city banks suspended specie payments in Octo
ber they reported larger amount OF specie IN their vaults
than their notes In circulation and Notwithstanding this
fact they unable TO meet the demands of their
dors promptly with specie owing TO their credit opera
tons under their deposit system Having extended their
credit and enabled their customers TO do the
they unprepared for the revuson which upon
them II be that embar have been
caoned by the here assigned look ond
the action Of the banks TO the operations Of other corpora
tons well as Individuals, TO fahon the entire Of
our difficulties. The limits Of this report will not
admit OF detailed examination of this subject but soil
tary illustration will present the subject in its proper
light In answer TO circular letter addressed to the va
rious railroad corporations Of the country the nomaon
contained in table No. has been obtained II appears
from this statement that the capital OF these companies
$49l 435 661 their indebtedness to SAT- 243,
Goa The annual interest upon the latter Is S25 093
203 their annual income was $4S ,406 ass.
proper here u remark that this statement Is not
entirely OF the companies failed respond
" the circular OF the department. and IN such the
returns made by them during the preceding year. and
contained in the last report OF predecessor have been
used in the preparation Of the table Whilst cannot
therefore he considered perfectly approx.
mates IL sufficiently the illustration
ment texhibs the extent to which this class Of corpo
raons has contributed that Of expansion Of
dit which Is properly chargcable with the recent revul.
sion. II is due to large class OF railroad companies
state that this excessive Indebtedness Il equally ds
trbued among them. Some have conducted Their
with the propriety and whilst others
have far exceeded these limits present the fore
going aggregate result of railroad operations in the United
States
The undue expansion Of credit which stimulated some
eager desire borrow and in others "A willing DISPOSE.
ton ~ lend which engendercd schemes Of mprovident
speculation, leading TO rapid fluctuations in prices and
habits OF extravaganza regard the principal for
the embarrassment existing the commerce of the
try. The only efficient remedy for such evils Is be
found in return to the prudent courses and steady hab
ts which, for a time, unhappily laid aside This
government could do but little toward extrcang ndvid
ais corporations or communities from the pernc'ous con-
sequences Of their extravagant expenditures Ill
ceved enterprises. When credit has been extended
far beyond the bounds of legitimate confidence
ate rcvuson in trade, occasonng fall OF prices and
destruction Of private credit speedy adjustment of the
relations between creditor and debtor by liquidation and
settlement Is the surest mode for the restoration OF the
equilibrium.
Wild and chimerical speculaons will thus have their
termination industry will be better enabled realize its
sober expectations and the substantial society
being relieved from the noxious influence of excitement
overacon and disorder will resume their accustomed
crgy communicating healtbiu and vigorous activity
government in such Is 70 whatever impei
mcnt may exist 10 the exerton Of the force soc
ety. and 10 extract from the experience they have gained
lessons be embodied Id wholesome and well
laws 10 prevent the recurrence Of the evil.
u Is evident that the great moneycd corpo.
raiions created under the laws of the States
have had a controlling influence in the undue
expansion of private credit In many o. the States the lc
gislaon in respect 20 these Is stringent and cmboiies
many Of the safeguards that experience has suggested for
their regulation.
Bu, will not be denied that this legislation has been
nugaory. The State authorities have already manifested
eager disposition 10 relieve them from the penalties
they have incurred and to dispense as far as they
able with the performance 81 the obligations they had
acted from them when they were organized. This has
been done, in some cases without an inquiry into their
condition management their capacity 10 their
position solvent Institutions ~ protect the
munity from a deprecated paper currency.
IN my judgment the period has arrived for Congress 10
employ the powers conferred by the Constitution upon
70 mitigate the present evil and 20 prevent catastrophe
~ similar kind IN future and for this purpose compul
sorry bankrupt law 10 include two classes " corporations
and companies, necessary II should be law for the
protection of creditors not the relief uf debtors pre-
vent improper credit not to pay improyiden debts;
pulsofy not voluntary The effect Of such law would be
felt ia its restraining influence than in ts practical
execution.
do not recommend a law similar 20 either
q those which have heretofore existed, aud were