New-York daily tribune., 1857-09-25
PROM PHILADELPHIA.
eONVULSIONS PAST AND PRESENT.
OsrSepo~Hunes Of The n. Y. Yy5esus


nayls In history. When similar events occur N
Ne progress Of human affairs, pothlng is moro ma
tsYal for us thaa to refer to aacient preeedenss.
Twenty years have eispsed since the occurrence OF
any financial pressure equal in nteosi y to that un-
aeY which the nation is now suffering. A new
sepeYation has arisen in the interval, who are the
living Witnesses Of what 10 passing around us, as
veil as the sharers in its unexpected vc,sslsades.
The majority Of those who figured IN the causes
which produced tho reyulsion of 1887, a. well as
tAs.e who became its victims, have passed away,
and their places are now filed BY Dew men, most
ef whom have personal knowledge vi eVens
mat teok place twenty years ago. IL may Do In
structive to suggest some "reminiscences vi that
DeriO6 and to connect with them some belonging 10
The revulsion Of 1910. Although the business OF
cur country has been subject to monetary structures
Of more or less teyerity, occurring spasmodcdlg,
10 il were, yet from present Indications 1t would
seem that we are destined, once in twenty years,
10 .ufer revulsion Of character general as to
pervsde tie length and breadth Of the country,
each, however, produced by totally diiiereat
causes.
The charter OF the first Bank Of the United
States expired in lell, the whole number OF banks
IN the Union being at that time only -. But by
JANUARY 1915 the number had suddenly increased "
2OS, and In January 1870 the number STOOD 3Oc.
This mania for new banks originated in the refusal
N rseharter the National Bank, in the speculative
spirit epeendered by the War Of 1872, and in the
suso of specie payments by the banks ia 1Sl4.
In the ten years from 1920 TO $780, the increase of
banks was confined to the legitimate demands OF
business, and did not exceed the moderate number
sf twelve being but little more than one bank per
anpum. In the latter end Of May 1914, Intelligence
WAS rec lived at Philadelphia that the three baLks at
New Orleans had, on the 9th Of April, suspended
specie payments This news produced LO sensation
either IN Philadelphia or New-York The suspen-
sion wss ascribed, by a meeting OF the citizens OF
New Orb ans to Causes exclusively local. partly TO
want Of harmony among the banks themselves
partly TO the restrictive laws Of the Government,
which had destroyed their foreign commerce, but
chiefly to the circumstance that those who brought
produce down the Mississippi for sale, took nothing
but specie back In return.
In this posture things remained until August OF
the same year. On the Oath of that month the bat
te Of Bladensburg vas fought, aud Washington was
entered by the British This intelligence produced
. general cOnsternstion more esp cially IN Balt-
more and Philadelphia, both of which cities 1t was
at once feared would also be captured by the enemy
InmedI and energetic measures were adOped Ia
both cities to erect deenses. In Philadelphia, the
whole population turned out, each trade in success
zion, and threw up numerous defenscs around the
city, and camp was established lower down To pre-
vent a landing by the British But people of all
classes " hO had bank notes and deppss, ran TO Sc
cure their amounts in spece general run on the
banAs TOOK place; those of Baltimore immediately
Suspended, those of Philadelphia on the }9th, and
those of New York two days afferward. The banks
south OF Connecticut also suspended those north OF
it did not. Those Of Ohio and Kentucky held out
until the lstter end Of the year. while the bank OF
Nashville continued paying until August, lolo.
1t is remarkable that this suspension by the New
York banks was wholly unexpected to them; for as
lste as the 25th of August, they resolved Ill general
conference that, "in the opinion of this meeting,
there does not exist any necessity for suspension
"of specie payments." II was exclusively the con-
sequence Of the panic produced by successful
f.Ieign invasiOn-a cause which may now be con-
sidered entirely obsolete. These suspensions were
eyt rywhere sustained by the public opinion of the
country. 1t was understood and agreed that the
suspension was to continue only 50 long as the war
might last; and the banks acting in accordance with
this understanding, immediately began to contract
their discounts, as the only means OF accomplishing
The desired result But the public made no demand
for the redemption OF the pledge after the receipt o
news in February, lcl5 that peace had been con
cuded with England; and the banks, finding
a profitable trade to continue TO exchange their note
for those Of individuals aud for Government stocks,
upon which they received interest while paying
none, gave themselves no concern about resumlDg
specie pay ments. The volume of currency was so
abundant aso that the people seemed entirely sat
isfed ~ enjoy its abundance. Bank notes had sunk
TO twenty thirty, and 10 some places to even forty
per cent below specie Money almost lost its value.
specie entirely disappeared from circulation that
notes for even two and three cents were issued III
nyriads by banks, corporations, and individuals.
Finally, the depreciation Of money, enhancing the
prices Of every species property and commodity,
appeared lke real Tise IN yslue and led to all toe
consequences which are ever attendant upon grad
ual advance Of prices. The deluson of artificial
wealth increased the demand Of the farmer for for
s,pp productions which flooded the country in uuex.
ampled profusion 90 as intercourse with England
vas resumed, and led him to consume 10 ant tcpat on
Of his crops. The country trader, seduced by an
extraordinary demand for bis merchandise, extended
his credit and filed his store at the most extrava
CANT prices with goods vastly beyond the actual
ability ofhis customers to pay for, while the mporr
ers having guide to ascertain the real wants OF
the community but the eagerness of retailers to pur
chase their commodities sent orders abroad for sup
ply of manufactures wholly disproporti,ned to the
effective and wholesome demand of the country.
individuals of every profession were tempted to em-
barb in speculation, and the whole community be-
came literally plunged into debt
During the continuance Of this suspension OF spe-
cie payment, the eovernment, like other dealers,
pad It's debts and collected its revenues in the notes
Of suspended banks. Nay, its poverty was SO great,
owing to the expenses of the war, that 1t was Obliged
TO borrow large sums Of money in the same car
rency, at a sacrifice Of twenty per cent, thus giving
10 the lenders for -5 in bank notes, worth not over
$6O in specie certificate of stock for 500, bear
ing six per cent interest, payable at hturo day,
and snce actually paid in coin. lis poverty rendered
it comparatively helpless. 1t possessed no power
the currency and the regulation OF It's value IN
each State city and town was left to the sole dis
creti0n Of the banks, which, resulting IN different
degrees Of depreciation brought about an inequality
in the duties PAYABLE at the custom. houses which,