Clarksville chronicle. (Clarksville, Tenn.) 1857-1865, 1857-12-14

sive bank loans OF mere paper credit exciting them
to extravagant importations of foreign goods wild
speculations, and runiOus and demorslizing stock
gambling When the crisis arrives, as arrive It
must, the banks extend no relief to the people.
In vain struggle to redeem their liabilities in specie,
they are compelled to contract their loans and their
issues and at last in the hour Of Distress when their
assistance is more needed, they and their debtors
together sink into insolvency.
1t is this paper system of extravsgant expansion,
raising the nominal price of every article far beyond
its real value, when compared with the cost of SIM
liar articles in countries whose circulation is wisely
regulated which has prevented us from competing
in eur own market with foreign manufacturers has
produced extrasagant importatons aud has counter.
acted the effect ofthe large incidental protection
afforded to our domestic manufactures by the pre-
sent revenue tariff. But for this the branches OF
our manufactures composed of raw Isateiials. the
production OF our own country-sueh as cotton,
iron and woolIen fabrics-would not only have ae-
quired almost exclusive possession of the home
market but would hare created FOR themselves
foreign market throught the world,
Deplorable, however, as may be our present n
nancial condition, we may yet indulge in bright
hopes Of the future. No other nation has ever
existed which could have endured such violent
expansions and contractions of paper credit with
out lasting injury; yet the bouysncy of youth,
which never quas before difficulties, viii enable
US soon to recover from our present fnanciol EN-
barrassmeut, and may even occasion us speedily
to forget the lesson which they have taught
In the meantime il is the duty Of the govern
meat by all proper means within its power, to aid
in alleviating the sufferngs of the people, occa-
stoned by the suspension Of banks, and to provide
against a recurrence of the same calamity. Unfor-
tunately in either aspect of the case it can do but
little Thanks to the independent treasury, the
government has not suspended payments, as it was
compelled to do by the failure ofthe banks in 1887
1t will contnre to discharge its liabilities to the
people in gold and silver. Its disbursements in
coin will pass into circulation, and materially assist
in restoring sound currency. From its high cred
| it, should we be compelled to make temporary
| loan il can be effected on advantageous terms.
This, however, shall, if possible, be avoided; but
| if not, then the amount shall be limited to the
| lowest practicable sum.
/ have, therefore, determined that whilst no
| ful government works already in progress shall be
! suspended, new works not already commenced, will
be postponed if this be done without injury to
the country. Those necessary for its defence shall
proceed as though there had been no crisis in our
| monetary affairs
Rut the Federal Government cannot do much to
provide against recurrence of existing evils. Even
il insurm0untabe constitutional objections did not
exist against the creation of National Bank, this
would furnish adequate preventive security. The
history of the last bank Of the United States ahun-
dany pi owes the truth OF this assertion. Such bank
could Iot, if it would, regulate the issues and
credits of 400 state banks in such manner as
| to prevent the runous expansions and contractons
in our state banks which afflicted the country during
the existence of the late bank secure US against
| future suspensions. In 1925 effort was made by
| the Bank of England to curtail the issues OF the
country banks under the most favorable circum-
| stances.
The paper currency had been expanded to ru-
nous extent, and the bank put forth all its power
contract in order to reduce prices and restore
the equilibrium of foreign exchanges. 1t accord
ingly commenced a system of curtailment of its
| loans and issues in the vain hope that the joint
stock and private banks OF the country would be
compelled to follow its example. 1t found, howev-
er that as it contracted they expanded and at the
end of the process, to employ the language OF a
very hign official authority, whatever reduction OF
the paper currency was effected by the bank oi
England in 1925 more than made up by the is
sues of the country banks"
But the Bank of the United States would not, il
it could restrain the losses and loans OF the State
banks, because its duty as regulator OF the cur
rency must often be in direct conflict with the i'm
mediate interests of its stockholders. Ii we ex-
pect one agent restrain control another, their
interest must at least in some degree be antagOniS
States would feel the same interest and the same in
clinaton with the directors of the State Banks to
expand the currency to accommodate their tavorItes
and friends with loans, and to declare large dVi-
dends. Such has been our experience in regard to
the last Bank
After all we must mainly depend upon the patri-
otism and wisdom of the States for the prevention
and redress of the evil If they will afford us a
specie basis for our paper circulation by increas
ing the denomination of bank notes, first TO twenty
and afterwards to fifty doars if they will require
that the banks shall at all tines keep on hand al
least one dollar in gold or silver for every three
dollars of their circulation and deposites; and il
they will provide by self-executing enactment,
which nothing can arrest, that the moment they sus
pend they shall 60 into liquidation believe these
provisions, with a weekly publication by each bank
of statement of its condition, would go far to Sc
cure us against future suspensions of specie pay
ments.
Congress, in my opinion, possesses the power tC
| pass a uniform bankrupt law. applicable to ali bank
ing institutions throughout the Uued States, and
strongly recommend its exercise. This would make
il the irreversible organic law of each baIks exist
ence that a suspension of specie payments shal
produce its civil death. The instinct of selfpreser
vaon would then compel it to perform its duties in
such manner as to escape the penalty and preserve
its life.
The existence of banks and the circulation o
bank paper are so identical with the habits of oul
| people, that they cannot at this day be suddenly
abolished without much immediate injury to the
country. If we could conGne them to their appro
pirate sphere, and prevent them from administering
to the spirit of wild and reckless speculation by
travagant loans and Issues they might be continued
with advantage to the public
But this say, after long and much reflection: il
experience shall prove it to be impossible to enjoy
the facilities which well regulated banks might af-
ford, without at the time suffering the calami-
ties which the excesses Of the banks have hitherto
inflicted upon the country, it would then be far the
lesser evil to deprive them altogether of the power
to issue paper currency and confne them to the
functions of banks of deposit and discount.
Our relations with foreign governments are, upon
the whole, in a satisfactory condition
The diplomatic difficulties which existed between
the government of the United States and that of
Great Britain at the adjournment of the last Con-
gress have been happily terminated by the appoint
ment of British minister to this country, who has
been cordially received.
Whilst it is greatly to the interest, as / am con-
vinced it is the sincere desire of the governments
and the people of the two countries to be on terms
of intimate friendship with each other, has been
our misfortune almost always to have had some irri-
tating, if not dangerous outstanding question with
Great Britain.
Since t. origin of the government we have been
employed in negotiating treaties with that power,
and afterwards in discussing their true intent and
meaning In this respect the convention of April
l9, 1850, commonly called the Clayton and Bulwer
treaty, has been the most unfortunate of all; be
cause the two governments place directly opposite
end contradictory constructions upon its first and
most important article.
Whilst, in the United States, we believed that
this treaty would place both powers upon ex
act equality by the stipulation that neither will
''occupy, or forfeit coonize, assume, exer.
else any dominion" over any part of Central Amcri-
ca, it is contended by the British Government that