Bradford reporter. [volume] (Towanda, Pa.) 1844-1884, 1857-12-17

paper-mouey country, though vastly behind
our own in this respect, it was deemed alvis.,-
bic, anterior to the act of Parliament of 1874.
| which wisely separated the issue of notes from
the banking department, for the Bank of Eng
land always to keep on hand gold and silver
equal to one third of its combined circulation
and deposits. If this proportion was no more
than sufficient 10 secure the convertibility of its
notes, with the whole of Great Britain, and
! to some extent the continent of Europe as q
field for its circulation, rendering it almost i'm
! possible that sudden and immediate run to o
dangerous amount should be made upon it, the
same proportion wonld certainly be insufficient
under our banking system. Each of our four
teen hundred Banks has but a limited circum-
ference for its circulation aud in the course of
q very few days the depositors and note-hold-
ers might demand from such a bank sufficient
amount in specie to compel it TO suspend, even
although it had coin in its vault equal TO one.
third of its immediate liabilities. And vet
am not aware, with the exception of the banks
Of Louisiana, that any State bank throughout
the Union has been required by its charter to
keep this or any other proportion Of gold and
silver compared with the amount of its COM
bined circulation and deposits What mas
been the consequence In recent report
made by the Treasury Department OH the con.
dtion of the Banks throughout the different
States, according to returns dated nearest TO
January, 1857, the aggregate amount of ac-
tual specie in their vaults is SIS, $40, ,S3S of
/ their circulation. $2l4.IIS .S22: and of their
! deposits, $230, ,35l, 352. Thus it appears that
/ these banks in the aggregate have consdera-
/ bly, less than one dollar in SeTen of gold and
| silver compared with their circulation aud DE-
I poSitS. 1t was palpabie, therefore, that the
! very first pressure must drive them to SuSpen-
/ sion, and deprive the people OF O convertible
| currency with all its disastrous consequences
! 1t is truly wonderful that they should have SO
/ long continued to preserve their credit, when
| q demand for the payment of oueseventh of
| their immediate liabilities would have driven
! them into Insolvency. And this is the con-
dition of the banks, notwithstanding that four
hundred millions of gold from California have
flowed in upon us within the last eight years.
and the tide still continues 10 flow. Indeed
such has been the extravaganza OF bank cred
its that the banks now hold considerably less
amount of specie, either in proportion to their
capital or to the circulation and depoS IS COM
bined, than they did before the discovery Of
gold in California. Whilst in the year of
ls4S their specie in proportion 10 their capital
was more than equal to one dollar for every
six dollars aad thirty three cents Of their capt
tai. In the year 1913 the specie was equal
within very small fraction to one dollar in
fiSe Of their circulation and deposi;es in 1857
it is not equal to one dollar in seven and half
of their circulation anl deposits.
From this statement ii is easy to oaccount for
oar financial history tor the last forty wears
II has been a history of eXtrayagdnt eXpau-
sionS in the business OF the country, followed
by ruinouS contractonS. At successive inter
vas the best and most cntcTpFIsihg men have
been tempted TO theft ruin by excessive bank
loans Of mere paper credit, exciting them 10
extraTagant mportatioas OF foreign goods
wild SpeculatiOnS, and ruinouS and demoraliz-
ing stock gambling. Wien the crisis arrives
as arrive it must, the banks can extend no re-
lief TO the people. In 4 vain struggle TO re-
deem their liabilities in specie they compelled
TO contract their loans and their issues aud
at last in the hour of distress, wheG their as
si>tance is most needed. ihey aud their debtors
together sink into insolvency.
1t is this paper system of extravagant ey-
panSion, raising the nominal price of every
article far beyond lis real value, when COM
pared with the cost OF similar articles in coun-
3
which has prevented US from competing in our
own markets with foreign manufacturers has
produced extravagant irnportations, and has
coluteracted the effect OF the large incidental
protection afforded 10 our domestic mauutac-
F tlreS hy the present revenue tariff. Bat for
this the branches Of eur manufactures compoS-
ei of raw materials the production OF oar own
coumtry-such as cotton. iron and wollen IA
P H. only nor .r.t ali
exclusive possession Of ,tbe home market, but
I would have created for themselves 4 foreign
market throughout the world.
DeplOrahie. however. as may cur present
! financial condition, We may yet indulge in
bright hopes for the future. No other nation
has ever existed which coHld have endured
such violent expansions and coRtractionS of
paper credits without lasting injury yet the
buoyancy of youth, the energies of our popu
lation. aud the spirit which never quails before
difficulties, will enable Us soon TO recover from
our present financial embarrassment. and may
even occasion US 10 speedily 10 forget the les
son which they have taught.
In the meantime il is the duty Of the Gov
ernmeat. by all proper means within its power,
20 aid in alternating tue sutferiugs OF the peo
pie occaSioned by the suspension OF the banks,
and to provide against a recurrence Of the
same calamity. Unfortunately. al either as
poet Of the case, it can do but little. Thanks
to the independent Treasury, the Government
| has not suspended payment, IS II was compel
/ ed to do by the fai!are of the banks in 1887.
/ IL will c0ntinae TO discharge lis liabilities 10
| the people in gold and silver. It's disburse-
/ uents in coin viii pass into circulation. and
/ materially assist in restoring a sound currency
/ From its high credit should We be compelled
| TO make temporary loan. it can be effected
on advantageous terms This however, shall,
| If possible be avoided but, If not, then the
3 L.