The Athens post. [volume] (Athens, Tenn.) 1848-1917, 1857-12-18

exception of the banks Of Louisiana, that any
State bank throughout the Union has been
required by it's charter to keep this or any
other proportion Of gold and silver compared
with the amount of its combined circulation
and deposites. What has been the conse-
quencef In recent report made by the
Treasury Department on the condition OF the
banks throughout the different States, nc.
cording TO returns dated nearest to January,
1857, the aggregate amount Of actual specie
in their vaults is S5s,S49,s3s, of their circu-
lntion e2l4778,S22, and of their deposites
$230,36l,352 Thus It appears thai these
banks, in the aggregate, have considerably
less thnn one dollar in seven OF gold and Sit.
yer compared with their circulation and de.
posites. II was palpabe, therefore, that the
very first pressure must drive them 10 sus-
pension, and deprive the people Of convert.
ble currency, with all It's disastrous' conss-
quences. II is truly wonderful that they
shonld haze 80 long eoAtinusd 70 .preservs
their eredit, when dep,and for the payment
f50f 6ne Seventh Of their immhdas lisbIIiiiss
\ would have driven them ditto ibsbisency.-.-t
And this is the condition Of the 5unks, not.
withstanding that -four hundred millions Of
gold from California have flowed in upon ~
within the last eight years, and the tide still
continues TO flow. Indeed, such has been the
extravagance of bank credits that the banks
now hold considerably less amount Of spe-
Gle, either in proportion to their capital or 70
their circulation and deposites combined, than
they did before tho discovery of gold in CALI
forna. Whilst in the year 1848 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 thirty-three cents of
their capital. In the year ls4s the specie
was equal, within very small fraction, to
one dollar in five of their circulation and de-
pOstes; in 1857 1t Is not equal 10 one dollar
in seven and a half of their circulation and
deposites.
From this statement 1t is easy to account
for our financial history for the last forty
years. 1t has been history Of extravagant
expansions in the business the country, fol-
lowed by ruinous contractions. AT sncces-
sive intervals the best and most enterprsing
men have been tempted to- their ruin--by ex-
cessive bank loans Of mere paper credit ex-
citing them to extravagant importations Of
foreign goods, wild specul .tions, and ruinous
and demoralizng stock gambling. When the
crisis arrives. as arrive it must, the banks can
extend no relief to the people. In vain
struggle to redeem their liabilities in specie,
they are compelled to contract their loans
Distress when their assistance is most needed,
they and their doctors together sink into in
solvency. 1t is this paper system of extrava.
CANT expansion, raising the nominal price OK
every article far beyond its real value, when
compared with the cost of similar articles in
countries W hose circulation 10 wisely regulat-
ed, which has prevented us from competing
in our own markets, with foreign manufao.
turers, has produced extravagant importa'
| bas otaI ba affa &c he
large incidental protection afforded to our do
nestle manufactures by the present revenue
tariff. But for this the branches of our manu-
features composed OF raw materials, the pro.
ducetiou OF our own country--such as cotton,
iron, and woollen fabrics-would not only
have acquired almost exclusive possession Of
the honre market but would have creatAd for
themselves a foreign market throughout the
world. Deplorable however, as may be CUR
present financial condition, we may yet in
dulge in bright hopes for the future. No other
nation has ever existed which could have en-
, dured such violent expansions and contrac-
+ tions of paper credits without lasting injury;
|, yet the buoyancy of YOUTH the energies Of our
population, and the spirit which never quails
before difficulties, will enable us soon to re-
cover from our present financial embarrass-
ments, and may even occasion us speedily to
forget the lesson which they have taught.
! eminent, by all proper means within its pow
e er, to aid in aleviating the suffering Of the
. people occasioned by the suspension OF the
= banks and to provide against recurrence OF
= the same calamity. Unfortunately, in either
r aspect ofthe case it can do but little Thanks
to the independent treasury, the Government
.. has not suspended payment, as it was COM
PEELED to do by the failure of the banks in
e 1887. 1t will continue to discharge its liza.
! Al 4 al.
. disbursements in coin will pass into circua-
! ton, and materially assist in restoring a sound
u currency From its high credit, should we De
D compelled to make temporary loan. 1t can
: be effected on advantageous terms. This,
: however, shall, if be avoided; bnt, if not then
v the amount shall be limited to the lowest
r practicable sum.
| have, therefore determined that, whilst
f no useful Government works already in pro-
h gress shall be suspended, new works. not al.
ready commenced, will be postponed, If this
! can be done without injury to the country
Those necessary for its defence shall proceed
y as though there had been no crisis in our mo-
netary affairs.
: But the Federal Government cannot do
: much to provide against recurrence of ex.
= isting evils Even if nsurmountable consti.
e tutional objections did not exist against the
i. creation of National Bank, this would fur
Ii nish no adequate preventive security. Inc
history of the last Bank of the United States
/. abupdantly proves the truth Of this assertion.
il Such bank could not, il 1t would, regulate
4 the issues and credits ef fourteen hundred
>, State banks in such manner as to prevent
: the ruinous expansions and contractions in
" our currency which afflicted the country
s. throughout the existence Of the late bank, or
secure us against future suspensions. In 1925
y an effort was made by the Bank Of England
!, to curtail the issues of the country banks un.
Q der the most favorable circumstances The
l. paper currency had been expanded to ruin.
o Gus extent, and the bank put forth all its
v. power to contract it in order to reduce pricos
l. and restore the equilibrium Of the foreign
d exchanges 1t accordingly commenced sys
,r TEN sf curtailment Of its loans and issues, in
=. the vain hope that the joint stock and private
n banks of the kingdom would be compelled tt
y" follow its example. 1t found, however, thai
/" as it contracted they expanded, and at the
y end of the process. to employ the language
u, Of a very high official authority, "whateveI
u reduction Of the paper circulation was effect
l. ed by the Bank Of England lin 1929 wal
O. more than made up by the issues OF the coun
10 try banks"
g. But Bank Of the United States woult
s. not, If It could, restrain the issues and loan
in of the State banks, because its duty as reg
ts uator of the currency must often be In drec
I'd conflict with the immediate interest OF II
a stockholders. II we expect one agent to re
st strain or control another, their interest mus
IN at least 10 some degree, be nntngonistic. Bu
IN the directors of Bank OF the United State
4 e Al. ...t~ - Al L.