The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1857-12-24


than one dollar in seven of gold and
silver compared with their circula.
ton and deposits. II was palpable
therefore, that the very first pressure
must drive them to suspension, and
deprive the people of a convertible
currency with all its disastrous con.
sequences. 1t is truly wonderful
that they should have so long contin-
ued to preserve their credit, when q
demand for the payment of onc.sev-
enth Of their immediate liabilities
would have driven them into insol-
vency. And this is the condition Of
tho banks, Notwithstanding that four
hundred millions Of gold from Cali.
fornia have flowed in upon us within
the last eight years, and the tide
still continues to flow. Indeed. such
has been the extravaganza Of bank
credits, that the banks now hold a
considerably less amount Of specie
either in proportion to their capital
or to their circulation AID deposits
combined, than they did before the
discovery of gold in California
Whilst in the year ls4s, their spe-
Gle in proportion to their capital was
more than equal to ono dollar for
four and half, in 1857 it does not
amount to one dollar for every six
dollars and thirty-threc cents Of their
capital. In the year ls4s, the spc.
Gle was equal within very small
fraction of one dollar in five of their
circulation and deposits; in 1857, it
is not equal TO one dollar in seven
and half of their circulation and
deposits.
From this statement il il easy to
account for our financial history for
the last forty years. II has been u
history Of extravagant expansion in
the business Of the country, followed
by ruinous contractions. At success
sivc intervals the best and most en-
tcrprising men have been tempted to
their ruin by excessive bank loans
Of mere paper credit. exciting them
to extravagant importations OF for
cign goods, wild spcculations, and
rlnous and dcmoraIizing stock gam
bling. When the crisis arrives, m
arrive il must, the banks can extend
no relief 70 the people In a vain
struggle to redeem their liabilities
in specie, they are compelled to con
tract their loans and their issues;
and at last, in the hour Of distress,
when their assistance liz most need
ed, they and their debtors sink to-
gcthcr into insolvency
Ii il this paper system Of cxtraya-
giant expansion, raising the nominal
price Of every article far beyond its
real value, when compared with the
cost Of similar articles in countries
whose circulation il wisely rcgula-
ted, which has prevented Ms from
competing in our own market with
foreign manufactures, has produced
importations, and has
coun,eracted the effect Of the large
incidental protection afforded 10 our
domestic manufactures by the pre-
sent revenue tariff. Bot for this the
branches of our manufactures com
posed Of raw materials, the produc-
ton Of our own c0untry-such AZ
cotton. IRON and wooden fabrics
would not only have acquired almost
exclusive possession Of the home
market, but would have created for
themselves foreign market through
out the world.
Dcplorablc, however, rs may be
our present financial condition, we
may yet indulge in bright hopes for
the future No other nation has
ever existed which could have en-
durcd such violent expansions and
contraction. Of paper credits with
out lasting injury yet, the buoyah-
cy Of youth, the energies Of our pop
nlation, and the spirit which never
quaiIs before difficulties. will enable
US soon % recover from our present
financial embarrassment, and may
even occasion US speedily TO forget
the lesson which they have taught
In the meantime, it j. the duty Of
the Government, by all proper mean.
within IT. power. to aid ia alleviaiibg
the suffering Of the people cccasioned
by the suspension II banks, and Ia
provide against the recurrence 81 the
sans calamity Unfortunately, in
either aspect 81 tin case, i, can Do
but little Thanks to the indcpcId.
cnt treasury, the Government, has not
suspended payment, a. il was co..-