New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1857-12-17

erto fou1a for their capita in diasounSag moi.
chants notes, became very largo investors in Gov.
ersmens stoels Thess SOCKS were principally
paid for in bank notes, Of which Q largo amour
was kept saoat BY tie extended recuniay trans
sctioss Of the Government. These expenditures
were largely o. the ffonters and, IN the very slow
movements Of trade at that day, bank notes thus
scattered were great deal longer in finding their
way home than at present. For the first two years
Of tie war; TIE banks that went into this business
were enibed to mako handsome dyi lends. Desire
to share in these profits led to the ehArterins Of
many rew banks without any slid capital. Tnus
in the Spring Of 1914, the Legislature Of Pcnusyl'
venia chartered no less than forty now banks By
single act Gov. Snyder pat his veto upon this sot,
but the Legislature passed it over his hes5, ono
Of the arguments urged in favor Of it being the
assistance which the new banks might render to
the Federal Government.
Meanwhile, however, the var expenses ran on ct
q much moro rapid rate than had been anticipated,
and as ore Government loan after another WAS put
upon the market the price Of Federal stocks began
to fall. The proposal for ne loan Of six millions
in the Autumn Of l5l4 drew out bids for less than
half that amount, and tho,e at the rate Of but
eighty per cont. Nor was this the worst OF it.
TIE last preceding lean had been obtained only on
condition that the subscribers to Is should be placed
on as good footing as any subsequent lenders, 90
that to realize two millions and half on the pres
EFT loan, the Treasury was obliged to issue stocks
to the amount of four millions aud quarter and
upward. Mt only were the resources of the
banks greatly crippled by this depreciation In the
value of stocks but ever since the war began they
bad been experiencing q gradual drain of their
specie, which had gone not merely out Of their
vaaIts. but out Of the country. The almost total
stop Of the export trade had made this export OF
specie a principal means Of paying for the British
goods which still continued to find their way into
the country, principally in ships under Swedish
cOloYs.
Such was the state of things Nhen the British
attack upon Washington led to suspension Of .pe-
Gle payments by the banks Of the District Of Co.
lumbia. Ar the news spread to Baltimore, Phil,-
delpbis and New-York, they too suspended specie
payments; an example speedily followed throughout
the country New England alone excepted. The
appropriately Of the war in New-EDgland, even
more perhaps than providentL business conaidsra.
tiop,, had prevented the New England banks from
investing in Government stocks. Instead Of ex'
paDding their loans they had contracted to meet the
contracted condition Of business. The blockade Of
the coast had cut of the coasting commerce OF
New England scarcely less than her foreign trade
60 that she stood isolated from the other States
hardly less in business than in politics. Thus New.
England though she sharod heartily in the distresses
and burdens Of the war, escaped being drawn into
suspension Of specie payments.
The mele statement Of the circumstances under
which this suspension took place, is sufficient to
show that resumption would be no speedy nor easy
matter. OF course, so long ~ tho war lasted
it was out of the question. Tho country had been
drained in q sreat measure Of its specie, which
could only be replaced by imPortations from abroad
Of course, 60 long as foreign commerce continued
suspended by the war, no such importations could
be made. Peace WAS luckily ard unexpectedly ~
established in few MONTHS but it took much
Jorge period TO ell up the void in the Nat!ona
Treasury, and even then the Treasury, instead o
specie, had only bank paper, which was at from
fourteen to sixteen per cent discount This die
count, instead Of gradually dminishing, went on in
cieasiDg. The banks showed no disposition
make any combined effort nor even TO csoperat
with the Government in restoring the currency to
specie basis. The attempts made by the Treasury
Department to induce the banks to associate for
mutual check and regulation did not succeed. Those
of the banks that most needed this check ard regu
lation refused to submit to it, Nor did the banks
come into the policy of resumption till they were
forced into it by the establishment Of nstionai
speciepayiBg bank-as basis for which special
imp ortstion Of specie was made from abroad-and
resolution on the part Of Congress- after provid-
iDg itself with this new currency, not to receive
for national cues any bank notes not redeemed 10
specie.
But as this resumption was forced operation, so
it was not maintained without the greatest diff
Guilty. Even the new National Bank was itself re-
duced to the very verge Of stoppsse, while ac,n-
siderable part Of the country banks did stop never
to resume again. In The Atlantic States, the sus-
pension lasted for two years and half; but in the
INTERIOR especially the West and South West, seven
or eight years elapsed before the deprecated balk
paper was entirely got rid of.
in the bank suspension Of 1887, the Federal Gov.
eminent was hardly less mixed up than in thst of
Io4. This time, however, the Government
Ggured not ss debtor but as a creditor. Many
millions of public money had been placed in certain
" pet banks" as they were called FOX the well I'm.
derstood purpose of being lent out to political f.
vorites, of whom the greater part were not mer
chan but mere spectators, principally in wild