Carroll free press. [volume] (Carrollton [Ohio]) 1834-1861, 1857-12-17

amSuat of United States e staea iecuri>
ties equal to theig hsles IN circnl....,,s !
And pledged toe their redemption. Th :,
eowever tsraishss no leo la,e sseur-
ities sgainst oVst issdes. Ga the ecu
trary /. may be perverted to initiate the
ourrsDcy, Indeed, il is possible by this
means 10 convert all The 6sbts Of the
United States aud the State Govern |
ments into bank notes, without refersnSe |
to the specie required to redeem thea. |
HowevervaluAblo these securities ma
be in themselves, they eanTo OF be con-
yerted into gold aud silver at the moment
of pressure, IS our experience teaehss,
in sufficient tine to prevent bank susr IN.
sions aud the depreciation o. OanS otes.
In England, which is .oa considerable
extent paper moDsy country, though
vastly behind olr own in this respect, it
was Zee ne3 advisable, anterior TO the
act Of Pariamsnt Of 1914, which wisely
separated the issue of notes from the
banking department, for the Bank Of
Enslsud always to keep on hand gold
and silver equal to oue-Ihird Of its CON,
bined circulation aud deposits.
If this proportion was no more then
sufficient to secure the eonverttllity OF
its notes, which the whole Of Great BIi-
tain, and TO some extent the continent
of Europe, as a field for its circulation,
rendering il almost impossible that a
sudden aud immediats run TO danger
ous amount should De made upOn it, the
same pro portion would certainly be in-
sufficient under our banking system
Esaeh Of our fourteen hundred banks has
but limited circumference for its eireu-
fation, aud in the course Of q very few
days the depositors and note holders
might demand from such bank a sufh'
cient amount in specie to compel 1t to
suspend, even although it had coin in its
vaults equal to one third Of its immedi-
ate liabilities.
Aud set am not aware, with the ex
ception Of the bank Of Louisiana. that
any State bank throughout the UHion
has been required by its chartert to keep
this or any other portion of gold or sill
vcr, oompare1 with the amount Of its
combined circulation and deposits. What
has been the conseque nee? In recent
report made by the Treasury Department
on the condition Of the banks through
out the different states, &C ;ordlng to re
turns dated nearest to January, 1857,
the aggregate amount of actual specie in
their vaults 500, $40 838 of their Circu'
lation 2l4,678, 822, and of their de-
posites 23O, 36l, 352. Thus it appears
that these banks in tho aggregate have
considerably less than one DOLLAR il
seven of g'Id and silver compared will
their circulation and deposites.
Ii was palpablo, therefore, that The
very first pressure must drive them tt
suspension, and deprive the poop!c
of a convertible currency, with all it
disastrous cons quenees. 1t is tr lll
wonderful that they should have so loul
continued to preserve their credit, wher
a demand for the paymtnt olono seventh
Of their immediate liabilities would hav,
driven them into insolvency. Aad Til
is the condition of the bruks, Dotwtb.
standing that four hundred millions [
gold from California have Il ,wll in up
ou us witmn The last eight years, pat
the tide ht,lI o5u!luues 10 flow. lndoed
sucl has hten the eXlravaganc' of bail
credits, t,at tho banks now hold cot
siderable is, nount of specie, either il
proportion 20 her capital or to then cir
cul.tiou md leposites continued, thar
they dii before 40 disc very If gold II
California.
Whilst in the year 184S their spdei
proportion to their cap tai was NOR
than equal to one dollar for four and
shals, in 1857 it docs not amount to ont
dollar for every six dollars and thirty
three cents Of their ca, i'al. In the yea
l84S the specie was aqual within yer,
snalt fraction to one dollar in five OF ,hti
circulation and dep sIts; in 1857 it i
not equal co one dollar in seven and
hals of their circulation aud deposits.
From this statement il is easy Lo aC
count foa our financial history for tn
last forty GEARS. 1t has been a histor
of oxtravagant cxpan lions in the bust
ness Of the couutry, f>l!owad by ruinou
contractious, AZ successive, interval
the best and mOs' enterprisiug busines
men have been tempted to their ruin b
excessive bank loans on me:e paper cred
it exciting them to "x.ravagaut importa
tions of foreign goods, wild specultionl
aud ruinOus aud demoralizing stoc
gambling. When the crisis arrives, a
arrive il must, the banks can extend n
relief to the people. In vain struggl
to redeem their liabilities in specie the
are compelled to contract their loans au
their issue; and at last, in the hour {
distress, when their assistance is mos
needed, they aud their debtors togotl
er sink into insolvency,
1t is this paper system Of extravagau
expsnsiOn. raising, the nominal price &
every article far beyond its real valu
when compared with the cost of simils
articles iu countries whose circulation
wisely regulated, which has has pre-
vented US from competing in our ow
markets with tOreigu manufactures, hs
pro1used extravAgant importstions an
has counteractad the effect Of the larg
incidental protection afforded to ou
d)mesdic manufactu es by tho prcsen
raveuue tariff. RuL for thia the hr.nch,