Arkansas true Democrat., 1857-12-22

vented us from competing in our own markets with foreign manufactures, has produced ex- travagant importations, and has contracted the effect of the large incidental protection afforded in onr domestic manufactures by the present revenue tariff. But for this the branches of our manufactures composed of raw material, the production of our own country-such as cotton, iron and woolen fabrics-would not only have acquired almost exclusive possession ot the home market, but would have created for them. selves a foreign market throughout the world.
 Deplorable however, as may be our present financial condition, we may etlndulge Tn bright hopes for the future. No other nation has ever existed which could have endured so violent expansions and contractions of paper credits without lasting injury; yet the buoyancy of youth, the energies of our population. and the spirit which never auails before difficulties, will enable Us soon to recover from our present tinan- cal embarrassment and may even occasion us speedily to forget the lesson which they have taught.
 In the meantime it is the duty of the govern ment, by all proper means within its power, to aid in alleviatng the sufferings Of the people, occasioned by the suspension of the banks, and to provide against recurrence of the same ca- lamity. Unfortunately in either aspect of the case it can do but little. Thanks to the inde- pendent treasury, the government has not sus- pended payment as it was compelled to do by the failure of the banks in 1887. It will con- tinue to discharge its liabilities to the people in gold and silver Its disbursements in coin will pass into circulation, and materially assist in re- storing sound currency. From its high credit, should we be compelled to make a temporary loan, it can be effected on advantageous terms This, however, should if possible, be avoided; but if not, then the amount should be limited to the lowest practicable sum.
 I have. therefore, determined that whilst no useful government works already Tn progress shall be suspended, new works, not already commenced, will be postponed, Ii thls can be done without injury to the country. ihose necessary 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 a recurrence of existing evils. Even if insurmountable 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 abundantly proves the truth oi this assertion. Such bank could not, II It would, regulate the issues and credits of four teen hundred State banks in such manner as to prevent the ruinous expansions and contrac- tions in our currency which afflicted the country throughout the existence of the late bank, or secure us against future suspensions. In 1925, an effort was made by the Bank of Eng and to curtal the issues of the country banks under the most favorable circumstances.
 The paper currency had been expanded to a most ruinous extent, and the bank put forth all its power to contract it in order to reduce prices and restore the equilibrium of the foreign ex- changes It accordingly commenced system of curtailment of its loans and issues, Tn the vain 1 hope that the joint stock and private banks of | the kingdom would be compelled to follow Its example It found, however, that as 1t con- tractcd they expanded, and at the end of the l process. to employ the language of a very high | official authority, "whatever reduction of the paper circulation was effected by the Bank of 1 England.Gn l825) was more than made up by the issues of the country banks.'
 But bank of the United States would not, 1 if it could, restrain the issues and loans of the State banks because its duty as aregulator oi the currency must often be in direct conflict with the immediate interest of the stockholders. l If we expect one agent to restrain or control an | other, their interests must, at least Tn some de- gree, be antagonistic But the directors of a bank of the United States would feel the same interest and the same inclination with the direc- tors of the State banks to expand the currency. to accommodate their favorites and friends with loans, and to declare large dividends. Such has been our experience in regard to the last bank.
 After all we must mainly rely upon the pa- l triotism and wisdom of the States, for the pre- vention and redress of the evil. It they will afford us real specie basis for our paper clrcu- latiou by increasing the denomination of bank notes, first to twenty, and afterwards to htty dollars; if they will require that the banks shall at times keep on hand, at least one dollar of gold and silver for every three dollars of their circulation and deposits; and if they will provide by self-executing enactment, which nothing can arrest, that the moment they suspend they shall go into liquidation, believe that such pro- visions, with weekly publication by each bank l of statement of its condition; would go far to secure us against future suspensions of specie | payments.
 Congress, in my opinion, possesses the power to pass uniform bankrupt law, applicable to all banking institutions throughout the United States; and strongly recommend its exercise. l This would make it the irreverslble organic law of each banks existence, that a suspension of specie payments shall produce its civil death.- The instinct of self preservation would then compel it to perform its duties in such man. her as to escape the penalty and preserve its life.
 The existence of banks and the circulation of bank paper are so identified with the habits of our people, that they cannot at this day be sud denly abolished without much immediate injury to the country. If we could conhne them to their appropriate sphere, and prevent them from administering to the spirit of wild and reckless speculation by cxtravagant loans and issues, ! they might be continued with advantage to the public.
 But this say, after long and much reflection; if experience shall prove it to be impossible to enjoy the facilities which well regulated banks might afford, without, at the same time suffering the calamitles which the excesses of the backs have hitherto inflicted upon the country, it would then be far the lesser evil to deprive them altogether of the power to issue a paper curren- cy and confne them to the functions of banks of deposit and discount.
 Our relations with foreign governments are upon the whole, in satisfactory condition.
 The diplomatic difficulties which existed be. tween the government of the United States aud that of Great Britain at the adjournment of the last Congress have been happily terminated by the appointment of British minister to this country, who has been cordially received.
 While it is greatly to the interest, as I am convinced it is the sincere desire, of the govern. AleuCS anu peOpie Oi tue two COuQCrleS to De or terms of intimate friendship with each other, il has been our misfortune almost always to have had some irritating, if not dangerous outstand ing question with Great Britain
 Since the origin of the government, we have been employed in negotiating treaties with tha power, and afterwards in discussing their true intent and meaning In this respect, the con vention of April 19, 1850, commonly called thu Clayton and Bulwer treaty, has been the mos unfortunate of all; because the two government. placed directly opposite and contradictory con structons upon its first and most important ar ticle.
 Whilst, in the United States, we believe tha this treaty would place both powers upon ar exact equality by the stipulation that neither will ever "occupy or fortify, or colonize, or as sume or exercise any dominion" over any par of Central America not held by the British Go vernment that the true construction of this Ian. guase has left them in the rightful possession O all that portion of Central America which wa. Tn their Occupancy at the date of the treaty ir