New-York daily tribune., 1857-10-21
Rtmarks.


entire fairness, but not exhaustivey. AS he seems
to seriously entertain the notion Of making our
Paper Currency secure and stable BY decreeDg that
each Bank shall keep in its vaults one dollar in spe-
Gle for every three of its liabilities we will treat
that suggestion more gravey than on former oc-
casion.
We premise, then. that such an exactiOn is, in
the nature Of things, ilusOry. The specie is of no
use in the Bank unless it is there to be paid out on
demand in satisfaction of the Banks liabilities so
that it is liable to be absorbed any hour by onehrd
of ihe Banks debts, leaving the residue utterly
worthless 90 far a. the Specie resource is to be
regarded. The Specie would make brave show
80 long as il was not wanted but beirg called for,
it would almost instantly disappear, leaving the
bulk Of the Banks liabilities unsatisfed and un
secured In ordinary times, this Specie might
subserve good purpose at an enormous costs but
in such crisis as We have just experienced, it
would prove q broken reed. No; if you are to
secure Banks liabilities by specie in its vaults,
you must require dollar for dollar, and then set
reliable public officer to watch the vault, and take
care that no dollar of specie is withdrawn till
dollar of the Banks Obligations shall have been can
celed and deposited in its stead.
Wewish our readers coud be cured ofths lingering
superstition of Bank omnipotence. The notion that
the Bonks might have expanded two or three weeks
ago, and might thereby have averted the catas-
trophe Of Suspension, is absurd. Banks, like indi.
viduals are creatures of circumstances. There
are seasons wherein they can eIpand-aud they
40. han in mi ar
contract or rush into hopeless insolvency. We are
this day owing, through our importers and jobber',
at lent One Hundred Millions of Dollarsto Europe,
in addition to our Railroad and other funded debts
This Hundred Millions was mainly due, and was
urgently demanded. But the importers had trustcd
the goods for which it was contracted to the job
beIs the obbers to the retailers, the retailers to
the consumers; and the latter were utterly unpre-
pared to pay. Hence the retailers could not pay
the jobbers, the jOboers could not pay the import
ers, and the importers could not pay the foreign
manufacturers and capitalists to whom they owed
the money: so all collapsed together. Had there
never been paper. circulating Bank in America,
our foreign debt might have been less, but the
consequences Of attempting to collect it would
have been the same. If our foreign creditors
could have waited for their dues till mid winter,
We might have paid them with lees difficulty, though
Eot without great sacrifices and reductions in
the nominal value of property but they
drew upon US just when We had no
Cotton, Tobacco, Wheat or other staple ready to
70 forward in large quantities; 60 we sent Specie
so long as We could, and then stopped. Every
dollar Of it exported inevitably contracted our
paper circulation by many times its amount, re-
duciDg proportionally all Property values; aud,
when at length the Specie ceased to flow outward,
this contraction Of values had obtained such mo.
mentum that it could not be stopped till it hsi run
its full course. The unsoundness of our general
system OF Mercantile Credits had by this time been
made palpable; and, while everybody was expecting
everybody to have confidence everybody was rap
idly io,iDg confidence from increasing knowledge Of
our all pervsdng bankruptcy. To blame the Banks
for contracting under such circumstances is as
ssnseess as to blame ship for shortening sail on
the visible approach Of 4 hurricane.
Hit be necessary that we show more clearly that
the proportion Of specie in a Banks vaults-so
long as that specie is not equal in amount to the
whole Of that Banks current habilites-is one of
the least reliable indications Of its solyency or nso
vency, and that one Bank may have specie in
vault equal to fifty per cent Of its current lisbli.
ties yet be insolyent while another with less than
ten per cent of specie compared with its liabilities,
ia perfectly sound. we will do it; but really this
seems TO US sufficiently demonstrated BY the event.
7 Of the present year. Ed.
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