Preble County Democrat. [volume] (Eaton, Ohio) 1857-1859, 1857-12-17
EATON, PREBLE COUNTY, o. DEC, II, 1857.

: mestlc manufactures by the present n
d venue tariff But for this the branche
k of our manufactures composed of RAJ
: materials, the production of our ow
n country-such as cotton, iron and wool
t en- fabrics-would not only have acquir
! ed almost exclusive possession of tn
r home market, but would have create
r for themselves a foreign market thro'
: out the world.
Deplorable, however, as may be on
e present financial condition, we may ye
: indulge in bright hopes for the future
, No other nation has ever existed which
could shaEep0ndurel sue ehEiolent expaN
sions aud contractions of paper credi
, without lasting injury; yet the buoyan
cy of youth, the energies of our popula
J ton, and the spirit which never quails
) before difficulties. will enable us soon
to recover from our present financial
mbarrassment-andm may even occasion
us speedily to forget the lesson which
they have taught.
In the mean time it is the duty of the
government by all proper means with
in its power, to aid in alleviating the
sufferings of the people occasioned by
the suspension of banks, and to provide
against recurrence of the same calam-
ity. Unfortunately, in either aspect of
the case, it can do but little. Thanks
to the independent treasury, the gov
crnment has not suspended payment as
it was compelled to do by the failure Of
the banks in 1887. 1t will continue to
discharge its liabilities to the people in
gold and silver. Its disbursements in
coin will pass into circulation, and ma
terially assist in restoring a sound cur
rency. From it's high credit, should
we be compelled to make n temporary
loan, it can be effected on advantageous
terms. This, however, shall, if possi-
BILE, be avoided; but, if not, then the
amount shall be limited to the lowest
practicable sum.
I have, therefore, determined that
whilst no useful government works al
ready in progress shall be suspended,
be postponed, if this can be done with
out injury to the country. Those nee
essary for its defence shall proceed as
though there had been no crisis in our
monetary affairs.
But the Federal Government cannot
do much to provide against recurrence
of existing evils Even if insufmoun-
table constitutional objections did not
exist against the creation of National
Bank. this would furnish no adequate
preventive security. The history Of the
last Bank of the United States abun-
dantly proves the truth of this assertion.
Such bank could not, if it would, reg
ulate the issues and credits of fourteen
hundred State banks in such manner
as to prevent the ruinous expansions
and contraction in our currency which
afflicted throughout the existence of the
late bank, or secure us against future
suspensions. In 1925 an effort Was
made by the Bank of England to cur
tail the issues of the country Banks
under the most favorable circumstan-
ces.
The paper currency has been expand
ed to a ruinous extent, and the Bank
put forth all its power to contract it i'll
order to reduce prices and restore the
equilibrium of foreign exchanges. 1t
accordingly commenced system of cur
taiIment of its loans and issues. in the
vain hope that the joint stock and pri-
vate banks of the kingdom would be
compelled to follow it's example. 1t
found, however, that as it contracted
they expanded, and at the end of the
process, to employ the language of a
very high official authority, whatever
reduction of the paper circulation was
effected by the Bank of England Gin
1920 was more than made up by issues
of the country bank.
But the Bank of the United States
and loans of the State banks, because
its duty as a regulator of the currency
must often be in direct conflict with the |
immediate interests of its stockholders. |
If we expect one agent to restrain or
control another, then interests must, at
least in some degree, be antagonistic.-
But the directors of Bank of the Uni |
ted States would feel the same interest
and the same inclination with the direc-
tors of the State banks to ~expend the
currency, to accom- modate their favor
ties and friends with loans, and to de- |
clare large dividends. Such has been
our experience in regard to the last
bank.
After all, We must rel mainly on the
patriotism and wisdom of the State for
the prevention and redress of the evil
If they will afford us a real specie basis
for our paper circulation by increasing
the denomination Of bank notes, first to
twenty, and afterwards to fifty dollars |
if they require that the banks shall at
all times keep on hand at least one dol
lar of gold and silver for every three dol
lars of their circulation and deposites
and if they will provide by a selfexecu-
ting enactment, which nothing can ar
rest, that the moment they suspend they
shall go into liquidation, believe that
such provisions, with weekly publica-
ton by each bank of a statement of its
condition, would go far to secure US
against future suspensions of specie pay
ment.
Congress, in my opinion, possesses
the power to pass a uniform bankrupt
law applicable to all banking institutions
throughout the United States, and 1
strongly recommend its exercise. This
would make it the irreversible organic
law of each banks existence, that sus-
pension of specie payments shall pro