Wheeling daily intelligencer. [volume] (Wheeling, Va. [W. Va.]) 1852-1859, 1857-12-10


sion, and deprive the people of a convertible
currency with all its disastrous consequences
II is truly wonderful that they should have so
long continued to preserve their credit, when
demand for the payment Of one-seventh of their
immediate liabilities would have driven them in
to insolvency. And this is the condition OF the
banks, notwithstanding that four hundreds Of
millions of gold from California have flowed in
upon us within the last eight years and the tide
still continues to flow. Indeed, such has been
the eNtrayrgance of bank credits that the banks
now hold n considerably less amount of specie
either in proportion to their capital or to their
circulation and deposites combined, than they
did before the discovery of gold in California.
Whilst in the year Is4S their ssecie in prcpor-
ton to their capitnl was more than equal to one
dollar for four and hall, in 1S4T it does not n
mount to one dollar for every six dollars and
thirty-three cents Of their capital. In the year
lS4S the specie was cqval within very small
fraction to one dollar in five of their circulation
and deposites in 1857 it is not eqeal to one
dollar in seven and half Of their circulation and
dcpositeS
From this statement it is easy to account for
our financial history for the last forty years
1t has been history ofextravagant expansions
in the business of the country, followed by ru-
inous contractiOns. At successive intervals the
best and most enterprising men have been
tempted to their ruin by excessive bank loans OF
mere paper credit, exciting them to extrayagant
importations of foreign goods, wild specua-
tions, and ruinous and demoralizing stock gam
bling When the crisis arrives, as arrive it
must, the banks can extend no relief to the peo-
pie. In a vain struggle to redeem their liabih-
ties in specie they are compelled to contract
their loans and their issues; and at last, IN the
hour of distress, when their assistance Is most
needed, they and their debtors together sink
into insolvency
1t is this paper system of extravngant expan-
sion, raising the nominal price of every article
far beyond its real value, when compared with
the cost of similar articles in countries whose
circulation is wisely regulated, which has pre-
vented us from competing in our own markets
with foreign manufacturers, has produced OK
travagant importations, and has connteracted
the effect of the large incidental protection at
forded to our domestic manufactures by the
present revenue tariff. But for this the branch-
es of our manufactures composed of raw mate
rails, the production of our own country-such
no os..to,, iron and ,unoIan fnhrics-wnuld not
only have acquired almost exclusive possession
of the home market, but would have created
for themselves foreign market throughout the
world.
Deplorable however, rs may be our present fl
nancal condition, we may yet indulge in bright
hopes for the future. No other nation has ever
existed which could have endured such violent ex-
pansiOus and contractiOns of paper credits witort
lasting injury; yet the buoyancy of youth, the en-
or qunils before difficulties, will enable TO
recover from our present financial embarrassment
mud may even occasion us speedily to forget the
lesson they have taught.
In the meantime it is the duty of the government
by all proper means within its power TO aid in al
leviatng the sutferings of the people Occasioned
by the suspension of the banks, and to provide
against the recurrence of the same calamity. I'm
in either aspect of the case it do
but little. Thanks to the Independent treasury,
l.
was compelled to do by the failure of the banks in
1887 1t will continue to discharge its liabilities
20 the people in gold and silver. Its disburse-
nents in coin will pass into circulation, and mate
,iaIy assist in restoring a sound currency. From
is high credit, should we be compelled TO make
temporary loan, it can be effected on advantageous
crms, This, however, shall. if possible, be
wooded; but. if not, then the amount shall be linn
ted to the lowest practicable sum.
have, therefore, determined that whilst no
useful government works already in progress
shall be suspended,new works not already conf
menced, will be postponed, if this can be done
without injury to the country. Those necessary
for its defence shall proceed as though there
had been no crisis in our mOnctory affairs.
But the federal government cannot do much
to provide against recurrence of existing, evils.
Even if insurmountaGle constitutional obiec-
lions did not exist against the creation of n ma
tional bank, this would furnish no adeouute
preventive security, The history of the last
Bank OF the United States aLundantlV proves
the truth of this assertion. SuclEa bank could
not, if it would, regulate the issues and credits
fourteen hundred State banks in such a manner
as to prevent the ruinous expansions and con-
fractions in our currency which afflicted the
country throughout the existence of the late
bank. or secure us agaidst future suspensions.
In lS26 an effort was made by the Rank of En-
gland TO curtail the issues of the country banks
under the most favorable circumstances The
paper currency had been expanded tt, 5, ruinous
extent, and the bank put forth all it, iIwer to
contrast it in order to reduce prices a, srcstore
the equilibrium of the foreign exchanges. 1t
accordingly commenced system of CT, ailment
of its loans and issues, in the vain hope that
that the joint stock and private banl,s of the
kingdom would be compelled to folk, " it's ex-
ample. 1t found howevar, that rs it contract
cd they expanded, and at the cud of the profess
to employ the language of a very high official
authority, whatever reduction of the paper
circulation was effected by the bank of England
lin 1921 was more than made up by the issues
Of the country banks"
But Bank of the United States would not
Fit could. restrain the issues and loans of tie
State banks, because its duty as a regulator of
the currency must often be in direct conflict
with the immediate interest OF its stockholders.
five expect one agent to restrain or control an
other their interests must at least, in some de-
gree, be antagOnistic. But the directors of a
Bank OF the United Sta'cs weuld feel the same