Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-09-26
BANKS AND BANKING.

As a party, the Democracy have ever opposed the |
Banking system, both national and State. The de-
leterous effects of both have been seriously felt by
our citizens upon several occasions within the las
three-qusrt Of century.
Through the instrumentslity Of the democratic
party the results of the mad spirit Of national bank
ing was exposed-the national bank killed, and
the people save from ruin.
From 1924 until 1886, banking, throughout the
country, high-paper currency increased its
circulation from 81 to $50 per cent-and, neces
sary consequence that followed, speculation ran
wild and in 1887 the doors of the banks closed,
and the people, who held their paper, were, in
many instances, hOplessly ruined. From that panic
the country recovered, and, under a constitutional
currency, and more mild system Ofbanking, it has
prospered. But within the last few years that
spirit of bank expansion has been developing ITSELF
which has flooded the country with a redundancy of
bank paper
The effect of banks of issue is to produce artif-
ci increase Of credit in the communities where they
exist, and precisely that extent unsOund con-
diiion in the walks of trade. Credit when acting
solely under the guidance of its natural laws is
benifcent in its effects, and furnishes the great
means by which the difficulties growing out of al
unequal distribution of wealth are overcome. But
when credit is stimulated into a state of unnatural
expansion by the exertions ola class, who deemt for
their special interest to promote and supply the
means for such a state of things, the result is, we
are inclinded to think, in a majority of cases. dis
astrous to those for whose benefit it prOfessedy
designed.
If We were asked to state, in q single phrase, the
fundamental source of all the financial con
WILSON'S and disasters which have, within the
last twenty years. successfully afflicted the country
we should answer-sn excessive and abused credi',
It isno exaggeratOn to say, that the whole trade OF
the nation has been conducted upon a false and
fictitious basis-on time contracts, rather than on
cash payments-on promissory notes and like sub
stitutes for money, and not on money. The natura
consequence has been that we have done a business
greatly in excess of the actual specie capital Of the
country; the prices of everything have been cores
pondingy inflated railways and all like enterprises
have been undertaken on borrowed or spuriOu,
means and in rash disregard of certain essential
dtions of remunerative returns our habits of life
have become loose and extravaganza to a fearful
abroad to pay for importations of foreign
goods which supplied the place of domestic fabrics
and to that extent diminished the productive activity
and revenues Of our own industry; and finally, the
perpetual presence in the stock market of larg,
mass Of floating debts, in the shape of bonds mort
cages, notes of hand, and paper securities of al
kinds, has led naturally to habitual speculation il
stocks which have no real value and are called
8. fancy and in such as are valuable, but whose
value is constantly being misrepresented by the
gambling operations at the Stock Board. II is
obvious that if this unsubstantal and fallacous mode
Of doing business is persisted in long enough, itmus
inevitably end in bankruptcy.
A time must come when accumulated obligation.
cannot be met with anything but gold and silver
and a very large part of the financial transaction:
of the country have never contemplated any such
mode Of final settlements, it follows naturally en-
ough, that When the specie is demanded and credi
can no longer be made available through transfer:
Of paper promises and securities, there must be
general breakdown, and sudden revelation of tbt
hollow and illusory character of much of what hai
appeared be a sOlidy prosperous state of affairs
TRAILING on credit and the substitution for a bon.
tide currency of that which is not really money, MOI
readily convertible into it, are two Of the radca
mischiefs which have brought about our present
monetary troubles Unless these fundamental vices
in our commercial system are corrected, We may
expect TO recover from one crisis only to relapse in
to another, while our progress in wealth will b,
unhealthy aud delusive