Lewistown gazette. [volume] (Lewistown, Pa.) 1843-1944, 1857-12-17

it's.
If this proportion was no more than suf6
eient to secure the controvertibility of it
notes, with the whole of Great Britain, and t.
some extent the continent of Europe as fielt
for its circulation, rendering it almost impos
sible that sudden and immediate run to
dangerous amount should be made upon it
the same proportion would certainly be in
sufficient undermpur banking system. Eact
of our fourteen #undred banks has but linn
tied circumference for its circulation, and in
the course of few DAYS the depositors and
noteholders might demand from such bank
a sufficient amount in specie to compel it tC
suspend even although it had coin in it,
vaults equal to one-third of its immediate Ii
abilities.
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 pro.
portion of gold and silver compared with the
amount of it's combined circulation and de-
posits. What has been the consequence p
In recent report made by the Treasury De-
partment on the condition of the banks
throughout the different States, according to
returns dated nearest to January, 1857 the
aggregate amount of actual specie in their
vaults is $685. 838, of their circulation
S2l4,778,S 800, and of their deposits $3.50, 0,35l,-
352. Thus it appears that these banks in the
aggregate have considerably less than one
dollar in seven of gold and silver compared
with their circulation and deposites.
1t was palpable, therefore, that the very
first pressure must drive them TO suspension
and deprive the people of convertible cur
rency with all its disastrous conquences. 1t
is truly wonderful that they should have so
lo, ~,
demand for the payment of one-seventh of
their immediate liabilities would have driven
them into insolv ency. An this is the con
dition of the banks, notwithstan ling that
our hundred millions of gold from Califor.
MIA hive flowed in upon US within the last
eight years, and the tide still continues TO
flow. Indeed, such has been the extrava.
gance of bank credits that the banks now
hold considerably less mount of specie,
either in proportion to their capitol or to
their circulation and deposites combined
than they did before the discovery of gold in
California.
Whilst in the year 1913 their specie in
proportion to their capital was more than
equal to one dollar for four and half, in
1857 it does not amount to one dollar for
every six dollars and thirtyrthree cents of
their capt. Il. In the year 1913 the specie
was equll within very small fraction TO
one dollar in five of their circulation and
deposites; in 1857 it is not equai to one
dollar in seven and half of their circula.
ton and deposites.
From this statement it i easy to account
for our financial history for the last forty
years. 1t has been history of extravagant
expansions in the business of the country,
followed by ruinous cvntractions. At
successive intervals the best and the most
enterprising men have heen tempted to their
rain ~ excessive bank loauS Of mere paper
credit exciting them to extravagaut importa-
tions u foreign gnaIs, wild spe .ulatiOns, and
ruinous and demoraliziug stock gambiing.-
When the crisis arrives, as arrive it must,
the banks can extend no relief 10 the people.
La a vain struggle to redeem their liabilities
in specie they are compel!ed ID contract their
loans aud their issues; and at last, in the
hour of distress, when their assistance is
most needed, they and their debtors togeth-
er sink into insolvency.
1t is this paper sy: tenn of extrayagant ex-
pansion, raising the nominal price of every
article far beyond its real value, when COM
pared with the cost Of similar articles in
countries whose circulation is wisely regula-
ted which has prevented us from competing
rers, has produced extrayagant importations,
and has counteracted the effect of the large
incidental protection afforded to our domes-
tic manufactures by the present revenue
tariff But for this the branches of our
mauuf1 ctures composed of raw ma terials, the
productions Of our own eountry-such as
cotton, iron, and wooden fabrlcs-wOuld not
only have acquired almost exclusive posses
sion of the home market, but would have
created for themselves a foreign market
throughout the world.
DepIorable, however, as may be our pres
ent financial condition, we may yet indulge
in bright hopes for the future. No other ma
ton has ever existed, which could have en-
dured such violent expansions and contrac,
tons of paper credits without lasting injury
vet the buoyancy of youth, the energies OF
our population, and the spirit which never
ouails before difficulties, will enable us soon
10 recover from our present financial embar'
rassment, and may'ev occasion us speedily
to forget the lessoR which they have taught
In the meantime it is the duty OF the Gov
ernment, by all proper means within Its
power, to aid in alleviating the sutferlngs OF
the people occasioned by the suspension oi
the banks, and to provide against a recur
renee Of the same calamity. Unfortunately
In either aspect OF the case, IL can 10 Du'
little Thanks to the independent treasury
the Government has not suspended payment
as il was compelled to do by the failure of
the banks in 1887. 1t will continue to dis
charge its liabilities to the people in gold anc
silver Its Disbursements in coin will pass
into circulation, and materially assist In re
storing a sound currency. From its hlgt
credit should we be compelled to make &
temporary loan, it can be effected on advan
taeeous terms. This however, shall If pos
si6Ie, be avoided; but, if not, then th'
amount shall be limited to the lowest practi
cable sum. ~,
have therefore, determined that willis
no useful government works, not already
in progress shall be suspended, new works
not already commenced. will be postponed
if this can be done without injury to th'
country. Those necessary for its deienc