The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-03

four month"; Freighs were dull and engagements light
without change OF moment in quotations The market
fiat, and the sale held yesterday of heavily
peciay for the lower grades, while several lots were
withdrawn.
The Financial Embarrassments OF Europe
and America-Their Origin and Future In
nuences.
In our paper of to-day will be found curious
and interesting communication on the causes OF
the present financial difficulties in this country
and in Europe, by "A Retired Statesman" of
Virginia. The only Virginians that we know
of who can fairly lay claim to this title are
Charles Fenton Mercer, distinguished member
of Congress in the time Of Adams and Clay. who
recently spent good deal of his leisure abroad
and William G. Rives, for many years Resident
Minister from this country in Paris. Both these
gentlemen have had full opportunity of making
themselves acquainted with the monetary sys-
TENS of Europe: and the views of either in rela-
ton to the present financial troubles of England
and the Continent are always certain to COM
mand attention. Irrespective of its putative au-
thorship, the letter of the Retired Statesman is
entitled to a careful perusal. 1t is a highly in
structive and suggestive document, and gives
us a succinct but clear view of the influences
that led to the late panic in this country, as
well as to the severity of it's reaction abroad.
1t traces the origin of our financial troubles
to causes more remote than railroad specula-
tion and mismanagement, and lays the blame
of them on the reckless cagerness with which
immense amounts of capital have been invested
in real estate in our Western States and Terri
tories. This, the writer contends, produced all
the difficulty here; and by blocking up to Eng
land her Western markets at the same time that
her commerce with the East was cut off it also
constitutes the direct source of al the embar-
easements of the latter.
Interesting as is the Retired Satesmans"
view Of the "origin of our own troubles" the
feature in his letter which will attract most at
tenton is his description of the financial condi-
ton Of Europe and the rottenness of all the
great banks and governments, constitutional as
well as despotc, of the Old World. Had his
pension of the Bank of England, they would have
been considered exaggerated; but when we see
purely commercial revulsion in this country
shaking to its centre the whole framework Of
government and society in the Old World, we are
compelled to acknowledge the force and justice
Of the writer's conclusions. Whether all these
conclusions are likely to be realized. and whether
the credit system as established in Europe has
strength enough to sustain itself, will be deter
mined in very short time. That question,
abroad as well as here, will lead to vast and in
terminable discussions II IL evident from the
tone of the public documents that have been is
sued in relation 10 these difficulties that the ma
jority of public men and writers are of opinion
that to the banking system in this country their
origin il chiefly to be attributed. This view is
in degree correct; but it must not be forgotten
that banking is only part of the credit system,
which embraces within its constituent elements
other and vaster interests, such a. commerce.
government and society itself
Incur opinion, it is not the principle of any
system or systems of banking which mparts to
financial operations the weakness that leads
to these periodical difficulties. Our own system
Is in all essential features the same that il
was twenty years ago. II Is true that
since the great commercial Revision
Of 1887 we have learned good deal, but il is
less in the improvement Of the system itself
than in its practical management As a proof
Of this we have only to cite the fact that at the
present moment the banks of New York, not
outstanding our late revcrscs are in as sound
and healthy position as they ever were at any
former period of our financial history. Their re-
sumption of specie payments l. not question Of
strength as regards their own condition, but
one of prudence in respect to the mercantile
community. The Governors or the different
States are. we see, calling attention to their
banking systems, and inviting suggestions for
improvements in them. We do not recognise
the necessity or policy Of this proceeding; one
banking system, as we said before, is just as
good as another, provided il be conducted on
correct financial principles The same may be
said OF the bank charter in England, and of the
Continental systems Lengthy discussions
VIII probably take place during the
approaching session Of the British Par
lament on the character of the Bank Char.
ter, and its efficiency to meet crises like the
present. They will be mere waste OF words
The Bank act Is just as good system as any
other, II properly managed No system, how
ever, can stand against the immense expansion
which Ia continually in progress in Europe in
financial, commercial and governmental opera.