Republican vindicator. [volume] (Staunton, Va.) 1849-1857, 1857-12-12


From this statement it is easy te account for
our financial history for the lastforty years. 1t
has been a history OF extravaganza expansions in
the business of the country, followed by ruinous
contractions At successive intervals the best
and most cnterprsipg snen have been tempted to
their ruin by excessive bank loans of mere paper
credit eXcitAG q tlfen to extravaganza importaions
of foreign goods, wild specnlations, aid ruinous
and 'demoralizng stock gambling. When the
crisis arrives, as arrive it must, the banks can
extend no relief to the people. 10 vain strug-
gle to redeem their liabilities in specie they are
compelled to contract their loans and their is
sues; and at last, in the hour Of Distress when
their assistance is most needed, they and their
debtors together silk into insolvency.
1t is this paper system OF extravagant expan
sion, raising the nominal price Of every errtfte
far beyond its real value, when compared with
the cost of similar articles in countries whose cir
cnlationis wisely regulated which has prevented
us from colnpetingr.sl calr own markets with for
eign manufactures, has produced extravagant
lmpoftaNons, and has counteracted the effect of
the large incidental protection afforded to our
domestic manufactures by the present revenue
tariff. But for this the branches of-our manu-
features composed of raw materials, the. produc
ton oil our own eountry-suct as cotton iron,
and wooen tabrcs-would not only have ac
fiGire,i almost exclusive possession OF the home
tidrket, out WculG nave created, Tor themselves
foreign market Throughout the world.
s9eplorable, however, as may be our present
financial condition, we may yet indulge in bright
hopes Ter the future. No other nation has ever
existed which could have endured such violent
expansions and eontractions of paper credits
without lasting injury; yet the buoyancy of
youth, the energies of our population, and the
spirit which never qnas before difficulties will
enable US soon to recover from our present fnan-
i.isl nm
speedily to forget the lesson which they have
Taught.
In the meantime, it's the duty Of the'govern-
inent, by al, proper means within its power, to
aid in alleviating the sutterngs Of the people oe-
teasione6'5y the suspension of the banks and to
provide against recurrence of the same oalam-
ity Unfortunately, in either aspect of the case
= it can DO but little. Thanks to the independent
treasury, the government has not suspended pay
tnent, as it was compelled to dc By the failure cf
the banks in 937. 1t will continue to discharge
its liabilities to the people in gold and silver
Its disbursements in coin will pass into eireuia-
ton, and materially assist in restoring sound
currency. From its high credit, should we be
compelled to make temporary loan, it car he
effected on advantageous terms. This, however,
shall, If pess.Ne, be avoided; but, if not, then
the amount shall be limited to the lowest prac-
ticable sum.
] have, therefore determined that whilst no
Hseful governmental works already in progress
shall be suspended, new works, not already com
menced, viii be.pos.pened 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 monetary affairs.
But the federal government cannot do much
to provide against recurrence of existing evils.
Even II insunnountable constitutional objections
did not exist against the creation of q National
Bank, this would furnishno adequate preventive
security. The history of the last Bank of the
United States abundantly proves the truth Of
this assertion. Such bank could net, if it
wonld, regulate the issues and credits of four
teen hundred State banks in sueh a manner as to
prevent the ruineHs expansions and eontraetions
liz our currency which afflicted the country
throughout the existence CT the late bank, CIR se-
!.cure US against future suspensions. IN 1896 en-
effort was made by the Bank of England to cur
tail the issues of the country banks under the
most favorable circumstances The paper cur
rency had been expanded to ruinous extent
and the Bank put forth all its power to oontrac.
IT in order to reduce prices and restore the equi
librium Of the foreign exchanges. Il according
\ Is commenced g system Of cnrtai,nent of its
loans ano Issues, in the vain hope that the ioirt
stock aud private banks OF the Kingdom wonla
he compelled TO follow its example. 1t found,
however, that as It contracted they expanded,
and at the end ef the process to employ the 4sn-
F. - =
ever reduction of fine paper circulation was ef-
fected by the Bank of England Gin 1929 was
more than made up By the issues eff the country
banks"
J But Bank Of the United States would not, if
it could restrain the issues and leans of the State
banks, because its duty as regulator of the cur
trency must often be in direct conflict with the
immediate interest of its stockholders. II We
expect one agent to restrain or control another
THAR 10 uuct Of i'm "a
antagonst;c. But the directors of a Bank OF the
United States would feel the same interest and
hthe-same inclination with the directors of the
state banks to expand the currency, to accom-
MEDIATE their favorites and friends with loans,
and to declare large dividends. SUCH has been
our experience infesara to the last bank.
After all We must mainly rely upon the pa
/ triotisin and wisdom of the States for the pre-
ventiou and redress OF the evil. If they will af-
ford Us real specie basis for our paper circula-
+ ton by Increasing the denomination of bank
notes FIRST to twenty ana afterwards to fitty dol
lars if they viii reqare that the banks shall at
I times keep on h@ad at least one dollar Of gold
and silver for every three collars Of their eirel!-
lation and deposits; anG If they will provide by
a self-executing enactment, which nothing can
arrest, that the moment they suspend they shall
go into liquidation, a@oeieTe that such provs-
ions, with weekly publication by each bank of
a statement of its condition, would go far to Sc
cure rs against future suspensions of specie pay
ments.
Congress, in raF opinion, possesses the power
to pass uniform bankrupt law applicable to MI
banking institutions t, ghout the United States,
rand ! strongly recommend it's exercise. This
would make 1t the irreversibie organic law of
esch banks existence, that suspension ofspecie
payments shall produee its civil death. The in
stinet Of self preservation would then compel 1t
to perforEl its duties in sacl manner as to 'es-
cape the penalty and preserve its life.
/ The existence of banks and the circulation Of
bank paper are SO identical with the habits of
our people, that they cannot at this day be sud-
I denly abolished without much immediate injury
/ to the country. If we could contne them to
! their appropriate sphere, and prevent them from
administering to the spirit of wild and reckless
speculation by extravagant loans and losses, they
might be continued with advantage to the pub
+ lie.
But this, say. after long and much reflection;
( if experience shall prove il to be impos,ibe to
enjoy the facilities which well regulated banks
might afford, without at the same time suffering
+ I'll a calamitieS which the pyresses of the banks