The North-Carolinian. [volume] (Fayetteville [N.C.]) 1839-1861, 1857-12-17


moment ofpressure,saso our experience teach
es, in suff cient time to prevent bank susren-
isions and tho depreciation 12of bank notes.
In England, which is to a considerable extent
"a paper money coun ~, though vastly behind
i our own in this re- gect, it WAS deemed ad-
J, visable, anterior to the act of Tal lament of
i 1874 which wisely separated the issue OF
slnotes from the banking department., sor the
fBaIlk Of England always to keep en- hand
gold and silver equal to .one-third Gifts CONF
s binsd Circulation and deposites. Iftmspp
/ portion was no more than sufficient TO seell1
+ ih litl1 ieal;: ;aft; {1i1
1 8 I ;;ri7als g. ..sae sosl !.
t f;i.s1it 8 af 8Eufopes rsreulatis,,
.':.fi z :. It almost <*,ossibfe tii;,t !. Scs q
den and ,imme diatelv- run to a ,lanaerous
amount Should be made upon it, the same
proportion would certainly be insufficient ln-
der our banking system. Each of Gu, four
teen hundred banks has but Il limited cir
cumference for its circulation, and III the
course of very few days the dcrositors and
note-holders might demand from such banl,
a sufficient amount in specie to colnpel it to
suspend, even although it had coin in it's
vaults equal to one-tliifd of It's immesIiate
liabilities. And vet ] am not aware, with
the exception Of the banks Of Lotis;ana that
any State bank throughout the Union has
been required by its charter to keep this
OF any other proportion Of gold and silver
compared with the amount of its combined
circulation and dcpostcs. What has been
the consequence? IN a recent report made
by the Treasury department on the cond
ton OF the banks throughout the different
States, according to returns dated nearest
to January, 1897, the aggregate amount of
actual specie III their waits is $3S, ,}49,S3S.
of their circulation $25l,77S, ,S22, and Of
! their dcposltes $780, 1852. Thus it al,-
pears that these banks In the aonrcratc
have considerably less than one dollar in
seven of gold and silver ctmral ed With then.
circulation and deposits. II was palpablc.
therefore, that the very first pressure must
drive them to suspensions, and deprive the
people Of a convertible currency ith all It's
disastrous consequences. il is truly wo,idc.
full that they should have SO one 20 tinucd
to preserve their crecit, when /. d<.ncnd for
the payment OF one-sevcnth OF their nmc-
dl;atc liabilities would have driven tl.e,n ;,.4o-
lnsolvcncy.-And this IS tie eo2difiop oftha
banks, Notwithstanding that faur h,ndr.d
millions OF gold from California have fowe,
i'll upon within the last eight wears and
the tide still continues to flow iuJanl e,.l,
has been the extravaganza of bank credits
that the banks now hold a considerable loss
amount OF specie, either in proportion to
their capital or to their circulation and dc
Posltes combined, than they did before the
discovery OF gold in California. While !,
the year 1918 their specie in proportion 10
their capital was more than eoual to ono
dollar for four and a half, in 1897 # does
not amount to one dollar for every six dol
lars and thirty three cents of their canita1
In the year 1S4S the specie was eoua1 With
III a very small fraction to one dollar in five
TO their circulation ard deposits in 1897 it
Is not equal to one dollar in seven and a half
OF their circulation and deposits.
rom ali this statement it is easy to ac-
count tor our financial history for The last
forty years. 1t has been history OF cxt,o-
VACANT expansions in the business q
the country, followed by ruinous contrac4-
lons.-At successive intervals t!,c hns+
and most entcrprising men have. been
tempted to their ruin by excessive bank
loans OF mere paper credit, exciting them to
extravaganza lmportatlons of foreign goods,
Wild speculatlons, and runous and demoral-
lzlng stock gambling. When the crisis ar
rlves, as arrive it must, the banks can ex-
tend no relief to the people. In vain struo-
gle to redeem thcir liabilities in spccie
they are compelled to contract their loans
and their issues and at last, in the hour Of
distress, when their assistance is most need
ed, they and their debtors together sink into
Insolvency.
1t IS tnls paper system Of cxtrayaeant OK
pansion, raising the nominal price of ever.
article far beyond It's real value, when com
pared with the cost of similar articles in coun-
tries whose circulation is wisely regulated,
which has prevented Us from CONF eth @ in
our markets with foreign manufacturers, has
produced extravagant importations, and has
counteracteG the effect Of the large iEcideI-
tai protection afforded to our domestic manu-
factures by the present revenue tarl!i.-i}ut
for this the branches of manufactures;
! composed of raw materials, the production or
our own country-such cotton, iron and
WOODEN fabrics-would not only have acqnIr-
ed almost exclusive possession OF the home
market, but would have created for them
selves foreign market throughout tho
world.
Deplora BILE. however, as may DC our pres
emf financial condition, we may yet indulge
in bright hopes for the future. no other
,,at;on has ever existed which could have en-
OWED such violent expansions and contradic-
- of nanar credits without lasting injury;
oioh = of youth tho prpro:e. or