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

s truly wonderful that they should have long
payment Of one seventh Of their immediate liabilities
would have driven them into insolvency. And this
the condition Of the banks, Notwithstanding that four
hundred millions OF gold from California have flowed in
upon within the last eight years and the tide still
continues to dow Indeed such has been the extrava-
deraby less amount Of SPECIE either in proportion TO their
capital TO their circulation deposits combined
Whilst in the year 1s4s their specie proportion to
their capital more than equal TO one dollar for four
and half in 1857 does not amount 70 one dollar for
every six dollars and thirty three cents q their capital
In the year l848 the specie was equal within very email
fraction to dollar in FIVE Of their circulation and
deposits in 1867 s not equal TO one dollar in seven and
a half Of their circulation and deposits.
From this statement II s easy to account for our imam
ca history for the last forty years It has been history
OF exravagant expansions the business Of the country
followed by runous contractons At successive intervals
the best and most enterprng men have been tempted to
their ruin excessive bank loans Of paper credit
citing them extravagant mporatons OF foreign goods
wild speculaons and ruinous and demorang stock gam
extend relief TO the people In vain struggle TO
deem their liabilities in specie they compelled 70
tract their loans and their issues and at last in the hour
distress when their assistance most needed they and
their debtors together sink into insolvency.
is this paper system Of extravagant expansion raising
the nominal price Of every article far beyond It's real
value when compared with the cost Of similar articles in
countries whose circulation is wisely regulated which has
prevented from competing in own markets with
taons and has counteracted the effect of the large Incl
dental protection afforded to our domestic manufactures
OF manufactures composed of Materials the pro
ducton of own countrysuch as cotton, iron. and
woolen fabrics-would not only have acquired almost
elusive possession of the home market would have
created for themselves foreign market throughout the
world.
Deplorable however, as may be present financial
condition. may yet indulge in bright hopes for the fu
tre No other nation has ever existed which could have
endured such violent expansions and conracons paper
credits without lasting injury yet the buoyancy Of YOUTH
the energies Of population and the spirit which never
auas before difficulties will enable us soon to recover
frnpn m
occasion speedily TO forget the lesson which they have
taught.
In the meantime IL is the duty OF the government, by
all proper within lis power to aid in aleviatng
Of the SanE and to provide against the Of the
same calamity Unfortunately, IN either aspect OF the
case, can do but little. Thanks 70 the Independent
Treasury the government has not suspended payment
compelled to do by the failure Of the banks in 1887
will continue TO discharge s liabilities To the people in
gold and silver It's disbursements in coin will pass into
circulation and materially assist restoring sound cur
rency From its high credit, should be compelled
make temporary loan, can be effected on advantageous
terms This however shall II possible be avoided; but
not then the amount shall be limited TO the lowest prac
ticable sum.
/ have therefore, determined that whilst useful 60
vernment works already progress shall be suspended
works, not already commenced will be postponed,
this can be done without injury TO the country Those
necessary for its defence shall proceed though there
had been crisis in monetary affairs
But the federal government cannot do much to provide
against OF existing evils. Even If insur
mountabe constitutional objections did exist against
the creation Of a national bank this would furnish
adequate preventive security The history Of the last
Bank Of the United States abundanty proves the truth Of
this assertion Such bank could not If would, regu-
late the and credits Of fourteen hundred State banks
in such 10 prevent the ruinous expansions
and contractons in currency which afflicted
try throughout the existence OF the late bank
made by the Bank Of England to cura the issues Of the
country banks under the most favorable circumstances
The paper currency had been expanded to ruinous
extent and the bank put forth all ts to contract IL
the foreign exchanges. II accordingly commenced sys
tenn ofcuralmen OF its loans and issues, in the vain hope
that the Joint stock private banks OF the Kingdom
would be compelled 10 follow It's example. II found,
however, that as contracted they expanded and at the
end Of the process 10 employ the language OF very high
Official authority "wbatever reduction OF the paper cir
oulaon effected by the Bank Of England (n 1929
banks"
POWER or NATIONAL sASK-srccEsrIoSs 10 THE STATE
But bank Of the United States would not II could,
the issues and loans OF the State banks because
ns duty as regulator Of the currency must often be IN
direct conflict with the immediate interest of its stock
holders We expect ono agent 10 restrain control
other their interests must at least in some degree be
antagonistic Bet the directors OF Bank Of the United
states would feel the interest and the ncna
with the directors Of the State banks TO expand the
currency 10 accommodate their favortes friends with
loans and declare large dividends Such has
experience in regard 10 the last bank.
After all, must mainly rely upon the patriotism and
wisdom Of the States for the prevention and redress Of the
evil. II they will afford us real specie basis for our
paper circulation by increasing the denomination Of bank
10 II
they will require that the banks shall all keep
hand least dollar Of gold and silver for every three
dollars Of their circulation and deposes and they will
provide by sefexecutng enactment, which nothing
arrest that the moment they suspend they shall into
liquidation, believe that such provisions, with weekly
publication by each bank OF statement Of s condition,
would 20 far to against future suspensions Of
BlSKRrpT LAW ron TIE RANKS.
Congress. in my opinion, possess the power 10 pass
uniform bankrupt law applicable to all banking nstitu-
tons throughout the United States and strongly
organic law of each banks existence that suspension Of
specie payments shall produce is civil death. The in
stnct OF sefpreseryaon would then compel II 20 per-
form IL duties In such manner as 10 escape the penalty
and preserve It's life
The existence Of banks and the circulation of bank "a
per are identified with the habits Of people, that
they this day be suddenly abolished without much
immediate injury the country n could conhne them
TO their appropriate sphere and prevent them from admin
istering the spirit OF Wild and reckless speculation by
sxravagant loans and issues they might be continued
with advantage 10 the public.
But this say after long and much reflection II expe
rence shall prove 20 be impossible 70 enjoy the facil
ties which well regulated banks might afford without at
the time suffering the calamtes which the excesses
Of the banks have hitherto inflicted upon the country
would then be Ear the lesser evto deprive them sogeth
c e. d " bS uncons ~ n Spc and iaa scoun
Our relations with foreign governments are, upon the
whole, in a satisfactory condition,
The diplomatic difficulties which exsted between the 60
Of the United States and that of Great Britain at
The adjournment of the last Congress have been happily
terminated by the appoint of British Minister this
country, who has been cordially received.
Whilst greatly 10 the interest as am convinced u
h the desire Of the and people o the
countries " be terms of intimate friendship with
each other has been misfortune almost always 70
have had some irritating II not dangerous, outstanding
question with Great Britain.
TIM CayruN BrtwrR TREATY.
Since the origin Of the government have been employ
ed negotiating treaties with that Power and Afterwards
discussing their true intent and meaning In this
poet tho convention OF April 10, 1880 commonly called
the Clayton and Buiwer treaty has been the most unor
OF all because the two governments place directly
opposite and contradictory constructions upon II, first and
mosi important article Whilst In the United states
believed that this treaty would place both Pers upon
exact equality by the stipulation that neither will ever oc
cupy, fortify, or coonzc, or assume or exercise
any dominion" over, any part Of Central America,
Il is contended by the British government that
the true construction of this language has left
them in the rightful possession a all that portion
of Central America which In their occupancy at the
date Of the treaty IN fact, that the treaty virtual
cognon on the part of the United States Of the right Of
Great Britain either protector, 10 the whole
extensive coast Of Central America sweeping round from
the Rio ondo the port and harbOr ~ san Juan dc Nea
ragua together with the adjacent Bay Islands except the
cornpa avey small portion Of this between the Sarsoon
and Cape Honduras According their construction the