The Council Bluffs nonpareil. [volume] (Council Bluffs [Iowa]) 1857-1867, 1857-12-26

Il ~
lat e;rht wears, and the tide still continue
IN Aov. Indeed, such has been the extrav
aesnce Of bank credits that the banks NOV
hold considerably less amount Of specie
either in proportion to their capital, OF Z
| their circulation and deposits combined, tha,
they did before the discovery Of gold in Cal
ifornis. While in the year l848 their spe
Gle, in proportion to their capital, was NOR,
than equal to one dollar for four and half
in 1857 it does not amount to one dollar to
every six dollars snd thirty y-three cents .
their capital. In the year 1848 the speci
was equal, within very small fraction, Y
one dollar in Eve Of their circulation and Dc
posts; in 1857 It was not equal to one dol
lsr in seven and . half Of their circulation
and deposits.
From this statement it is easy to accoun
for our financial history for the last fortyy
years. 1t has been history Of extravagan
expansions in the business OF tho country
followed BY ruinous contractions. At sue
cessive intervals the best and most enter
prising men have been tempted to their ruiz
BY excessive bank loans OF mere paper credit
exciting them to extravagant Importation
of foreign goods, wild speculations, and ru'
inous and demoralixing stock gambling
When the crisis arrives, a. 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, il
the hour Of distress, when their assistance
is most needed, they and their debtors to-
gether sink into insolvency.
crvvrxcv Avn rur rAprrr
It is this paper system Of extrayagant ex.
pansion, raising the nominal price Of every
article far beyond its real value when COM
pared with the cost of similar articles In
countries whose circulation is wisely regula-
ted, which has prevented US from competing
in our own markets with foreign manufac-
turers, has produced extravagant importa-
tions, and has counteracted the effect OF the
large incidental protection afforded to our
domestic manufacturers by the present rev.
enue tariff. But for this, the branches Of
our manufactures composed of raw materi-
ais, the production of our own country, such
rs cotton, iron and woollen fabries-would
not only have acquired almost exclusive
possession of the home market, but would
have created for themselves q foreign market
throughout the world.
Deplorable, however, as may be our pres
ent financial condition, we may yet indulge
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 injury;
yet the buoyancy Of youth, the energies of
our population, and the spirit which never
quails before difficulties, will enable us soon
to recover from our present financial en-
barrassment, and may even occasion US
speedily to forget the lesson, which they have
taught.
In the meantime it is the duty Of the gov
ernment, by all proper means within its
power, to aid in alleviating tho suffering of
the people occasioned by the SUSPENSION Of
the banks ,and to provide against recurrence
of the same calamity. Unfortunately, in Ell
ther aspect of the case, it can do but little.
Thanks to the independent treasury, the gov
ernmcnt has not suspended payment, as it
was compelled to do by the failure Of the
banks in 1887. twill continue to discharge
its liabilities to the people in gold and silver.
Its disbursements in coin will pass into cir
sound currency. Fromits high credit, should
We be compelled to make temporary loan,
it can be effected on advantageous TERMS
This, however, shall, if possible, be avoided;
but, if not, then the amount shall be limited
to the lowest practicable SUN. Ihave there
fore determined that whilst NO useful gov
crnment works in progress shall be be sus-
pended, new works not already 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 monetary affairs.
NO LEGISLATION on THE CURRENCY.
But the federal government cannot do
much to provide against recurrence Of ex-
isting evils. Even If insurmountable Con-
stitutional objections did not exist against
the creation Of a National Bank, this would
furnish no adequate security. The history
of the last Bank of the United States abun-
dainty proves the truth of this assertion.-
Such Bank could not, if it would regulate
the issues and credits of fourteen hundred
State Banks in such manner as to prevent
the ruinous expansions and contraotions in
our currency which afflicted the country
the existence of the late Bank,
or secure US against future Suspensions.
In 1925 an effort was made by the Bank
OF England to curta'i the issues OF the coun-
try Banks under the most favorable clrcum-
stances. The paper currency nao oeen ex-
panded TO a rulnous extent, ana 1ne % BANK
put forth all ITS power TO contract IN order
to reduce prices and restore the equilibrium
OF the 1oreisn exchanges. IL accoroingiy
commenced system OF curtaiiment OF its
!oans ana issues, IN tne VAN nope .na' tne
loint STOCK ana private osnKs OF .ne kInsoom
*oaid ne comPeleo 70 ioiio" i.s example,
IL found, however, rs 1t contracted they e1-
Panded, ana ut the end OF the process, TO
employ the language OF very nign ohcial
'wnatever reduction OF the paper
currency IN circulation oS was enec'eo oy 'ne
'ank OF England IN ioIo was more tnan
mace up ~ the issues OF tne country oanxs;
bu. bank OF the United states would
ae., II :. cou,a, restrain 'ne issues anu ioans
,, .he o.ate banks, because us da'y u reg
alA.or VI 'ae culfsncy must oiter oe IN u
,eGs connlcs WIN tne interests o. 1s s.oc.-
io'ucrs' "eeApect c"e agent 70 reS'I"ln
u con'rol ano.nel, tnelr inIeres!s must AZ
. c"s. 10 some uesrse' 1e sntagonistlc' nut
ns ala IrecsSf. e .t ot pan. .. sne Un,sa o.s.es
,oi;n..;na .:.h ~" i;".a.a" ss u se -" se CO.
:. ~.'a .lo .l u'loosols y. zig o'ss'
aats ,hs;, % farnr;,s. s.O .nd f.".l. ~ lan.
V ,"d )" e daa.' ia anG S;dJ t'eSs "sn ,oIu
,asn " onr - a4nsr;aas. ~ .s~..d % tI. -. i.., Z
,ant. 80