The weekly Portage sentinel. [volume] (Ravenna, Ohio) 1854-1861, 1857-12-10

"tNX hcpAIeteQ toe laAoe OF uotce AS'. N-~
banking department., for the Bank Of Eng
land always to kksP on band gold and silver
equal 70 oDe-third Of It's combined cireula
ten and dePesites.
II this proportion wss no more then suf-
fcient tpseeore the convertibility OF its
notes; which the whole OF Great Britain.
and 10 soma extent the continent Of Eu-
rcts. 10 field for its eirculSlion, rendering
alDust impossible that sudden and i'm
meriaie run to a dangerous amount should
BE made upon II, the same proportion would
certainly be insufficient cnder our banking
System. Each Of our fourteen hundred
banks has but a limited circuRference for
its circulatiSn, aud In the course Of very
few DAYS the depositors and note holders
might demand from such "a bank a sufficient
amount In specie TO compel tito suspend
even although |, hEd coin in its vsults equal
to one third Of its immediate liabilities.
And yet I am not aware, with the exeep.
ton Of the banks Of Louisiana, that any
State bank throughout the Union has been
required by iis charter to keep this or any
other proportion of gold and silver, compar'
cd with the amount OF lis combined circUla.
ton and deposits. What hos been the con-
sequence! In recent report made by the
Treasury Department on the condition oI
the banks throughout the different States,
according 10 returns dated nearest to Janu.
dry, 1857, the aggregate amount Of actual
specie in their vaults, is $5e, 1888, oi
their circulation S2l4,67s s22, ard Of their
deposits $3.50, 1852, Thus it appears
that these banks in the aggregate have con-
siderobly less than one dollar in seven oI
gold and silver compared with their circula-
ton and deposits.
fItwas pspable, therefore, that the very
first pressure must drive them to suspension
and deprive the people of a'conveftible cur.
rercy with tll i;s'distrcus consequences
1t is truly wonderful that they should have
80 long continued to preserve their credit,
when demand for the payment of one-
seventh Of thsir mnediate liabilities would
have driven them into insolvency. And
tEie 10 Tie condition OF the banks, notwith.
staRding that four hundred millions of gold
from California have flowed in upon us
wilhin the last eight years, aud the tide still
| continues to fow. Indeed, such has been
the extravaganza Of bank credits that the
banks now hold considerably less amount
Of f~spetie, either in proportion 10 their capi'
tailor to their circulation und'depostcs com
bined, than they did before the e'dsc0Veiy o
goldin California
Whilst in The year llS4S their specie ir
proportion to their capital was'more thar
equal toyore dollar for four and hall, II
1857 il does not amount to one dollar for eV
cry six dollars and thirty. three cents Of theil
capital. In the year lS48 the specie wat
equal within very small fraction to on,
dollar in FIVE of their circulation and depos
| ite; in 1857 It is not equal TO one dollar il
seven and a half of their circulation ant
Edeposits.
From this statement II is easy to accoun
for our financial history for the last forty
years. 1t has been a history OF eVtrava
gunt expansions in the business ofThe scUun
| try, followed by rulnous contractions. A
!, successive iGterrels the best and most zen
''.c-crieing business uen have been temple
to THEN ruin ny .xcesGive bank loans o
mere puper credit, exciting then 10 extrav
agant importA.ions Of foreign GOODS wi
speculstiuus, and ruinous and demora.!ziF
stock gambling. When the crisis arrives
as arrive it must, the banks can extend n
: lief TO the people. In vain struggle t
redeem their liabilities in specie they ar
compelled to contract their loans and thei
issues; and at last, in the hour Of distress
when their assistance Is most needed, the,
rand their debtors together sink into insol
rency.
1t Is this paper system Of extrGyasRnt ex
pansion, raising the nominal price Of ever,
article far beyond it's real value when com
pared with the cost Of similar articles il
counties whose circulation is wisely regu
| lated, which has prevented US from compet
| ing in our own markets with foreign manu-.
factErers. ..has produced ex'rAvagant importa.
tions, ard has counteracted the effect of the
large accidental protection afforded to ou,
domestic manufacturers by the present rev.
enue tariff. Bus for this, the branches oi
our manufactures composed of raw materi.
| Sls, the production of our own country, such
.as cotton, iron and wooden fabrcs-would
not only have acquired almost exclusive
DO, session Of the home market, but would
have created for themselves foreign mar.
ket throughout the world.
Deplorab'e, however, as may be our pres
ent financial condition, we may yet indulge
in bright hopes for the future. No other
nation has ever existed which could have
endured such violent expansions and con-
fractions Of paper credits without lasting in .
jury; yet the buoyancy of youth, the ener.
gies of our population, and the spirit which
never quai!s before difficulties, will enable
us soon to recover from our present financial
embarrassment, and may even occasion us
speedily to forget the lesson, which they
have taught.
Ip the meantime it Is the duty OF the gov
erpment, by oil proper means within it's
power, to aid In alleviating the sufferings OF
the people occasoBed by the suspension of
the banks, and to provide against a recur.
renee Of the same calamity. Unfortunately
in either aspect of the case, it can do but
little. Thanks to the Independent treasury,
the government has not suspended payment,
as it ives compelled to do by the failure Of
the banks 10 1887. 1t will continue to dis
charge its liabilities to the people in gold
and silver. Its disbursements in coin will
puss into circulation, and materially ASST
in restoring sound currency. From it's
high credit, should we be compelled to
make a temporary loan, it can be effected on
advantageous terms. This, however, shall,
'jf possible, be avoided; but if not, then the
au;aant shall be limited to the lowest prac.
ticAbIe SUM.
have, therefore, determined that willis,
no ussruI govsrnmeEt works in progress
shall be suspended. new wcrks, not already
commenced, will bo postponed, II this can
be dune without injury to the country
Those necessary for its defence, shall pro.
ceed as though there had been no crisis in
our monetary affairs.