Orleans independent standard. [volume] (Irasburgh, Vt.) 1856-1871, 1857-12-18

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convert all the debts of the United States
and State governments into bank notes,
without reference to the specie required
to redeem them.
However valuable these securities may
be in themselves, they cannot be con-
verted into gold and silver at the mo-
ment Of pressure, as our experience
teaches, in sufficient time to prevent bank
suspensions and the depreciation of bank
notes. In England, which is to con-
siderable extent paper money country,
though vastly behind our own in this re-
spect, it was deemed advisable, anterior
to the act of Parliament of 1874, which
wisely separated the issue of notes from
the banking department, for the Bank of
England always to keep on hand gold
and silver equal to one-third of its com
bined circulation and deposits. If this
proportion was no more than sufficient to
secure the convertibility of its notes, with
the whole of Great Britain, and to some
extent the continent of Europe, as field
for its circulation, rendering it almost
impossible that a sudden and immediate
run to a dangerous amount should be
made upon it, the same proportion would
certainly be insufficient under our bank
ing system. Each of our fourteen hun
dred banks has but limited circumfer-
ence for its circulation, and in the course
of very few days the depositors and
noteholders might demand from such a
bank a sufficient amount of specie to
compel it to suspend, even although it
had coin in its vaults equal to one-third
of its immediate liabilities. And yet |
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 combined circula-
ton and deposits. What has been the
consequence In recent report made
by the Treasury Department on the con-
dition of the banks throughout the diff
ferent States, according to returns dated
nearest to January, 1857, the aggregate
amount of actual specie in their vaults is
S58,349, 1873, of their circulation S2l4,-
1882, and Of their deposites $780,
351,352.
Thus it appears that these banks il
the aggregate have considerably less thar
one dollar in seven Of gold and silver
compared with their circulation and de-
posits. 1t was palpable, therefore, tha
the very first pressure must drive then
to suspension, and deprive the people o
a convertible currency with all its disas
trous consequences. 1t is truly wonder
full that they should have SO long continu
ed to preserve their credit, when a de
mand for the payment of one-seyenth o
their immediate liabilities would hav
driven them into insolvency. And thi
is the condition of the banks, notwith
standing that four hundred millions Q
gold from California have flowed in upol
= US within the last eight years, and tn
tide still continues to flow. Indeed, sue
has been the extravaganza of bank credit
that the banks now hold considerabl
less amount of specie, either in propoI
0 ton to their capital or to their circulatio
e or deposits combined, than they did be
fore the discovery of gold in Californi;
I, Whilst in the year 194S their specie i
T proportion to their capital was more tha
= equal to one dollar for four and a hal
e in 1857 it does not amount to one dolla
: for every six dollars and thirty-thre
e cents of their capital. In the year 1S4
y the specie was equal within very sma
= fraction to one dollar in five of their ci
d culation and deposits in 1857 it is nj
e equal to one dollar in seven and ha
g of their circulation and deposits.
g From this statement it is easy to a
A. count for our financial history for II
ID last forty years. 1t has been history
extravagant expansions in the busine
E. of the country, followed by ruinous CO.
re fractions. At successive intervals Il
IL best and most enterprising men ha'
De been tempted to their ruin by excessi'
m bank loans Of mere credit, exciting the
le to extravagant importations of forei|
er goods, wild speculations, and ruinous al
o. demoralizing stock gambling. When Il
OF crisis arrives, arrive it must, the ban
IL can extend no relief to the people.
n a vain struggle to redeem their Iiabiliti
IL in specie they are compelled to contra
n their loans and their issues, and at la
in the hour of distress, when their Z
on sistance is most needed, they and th'
as debtors together sink into insolvency.
ID, 1t is this paper system of extravaga
en- expansion, raising the nominal price
nd every article far beyond its real vail
IT. when compared with the cost of SINH
le- articles in countries whose circulation
ng wisely regulated, which has prevent
7 a US from competing in our own mark
cir with foreign manufacturers, has produC
On extravagant importations, and has col
cy, teracted the effect of the large inciden
rst protection afforded to our domestic I
lb- nufactures by the present revenue tar
ent But for this the branches of our maj
the factures composed of raw materials,
at production of our own eountry-such
- cotton, iron, and wooden fabrics-wo
red not only have acquired almost exclus
ess possession of the home market throu
re- out the world.
his Deplorable, however, as may be
fl present financial condition, we may
- indulge in bright hopes for the future
bic No other nation has ever existed wh
ms. could have endured such violent exp