The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-10-19

country. That It Il already doing 60 we know.
The steamship Fulton on Saturday took out $751;
900 in epece, in the face Of the apparent adverse
state of the exchanged We may expect much
more to follow, for the laws of trade are immuta-
ble The banks, in view Of the penalties Of the
law, resisted for time the current toward sus-
pension; but now that they have given way to
the tide they must 90 with ii, wherever 1t
may carry them. If they do not
augment their loans, where is the relief to come
from that was anticipated from suspension 1t
was only because, being relieved from the obliga-
ton to pay their debts, they could loan their
If it should be found, after proper examina-
tion Of the subject that the Judges Of the First
and Second Judicial districts have erred in the
course they bave pursued-as is maintained by
two of our correspondents-the position of the
banks will be one Of great complication and pos
sible disaster. But even that viii not be the
worst part of the position. The fact that eight
Judges in private consultation, with closed doors,
determined in time of popular excitement to
wrest the majesty Of the law from it, course, and
suspend the administration of justice, is fearful
CONNIE Mt upon the stability of our institutions
That the criminal upon the eve OF execution
should desire to have suspended the action of the
Law that condemned him to death is most NATL
raj ibut what could be hoped from the Judge that
did suspend the action of the Law, or the commu-
nifty that sanctioned it? Let us see how near we
approach to such an instance
In a time of cool and calm reflection; after a
deliberate view of the dangers to which the
whole community are exposed by an undue ex-
pansion of our banking institutions; with per-
manent desire to restrain such expansion, and to
prevent as far as possible, the evil effects of its
imperative reaction, the sovereign voice of the
people imposes upon those institutions certain
penalties in case of refusal to pay their iabili-
ties. The fear Of the incuryence of these penal
ties is the only restriction that can be laid by
legislative action upon banking imitation AL
other systems have been found useless and In
operative. Bank commissions, to act during
normal times, have no effect, for commissioners
may be deceived or are venal. Laws to restrain
loans and discounts are powerless before the
hope of profit A salutary fear of the ultimate
result is the only thing that can clip the wings of
speculative hope. The calm voice of the COM
munity establishes this fear, by q well digested
code, knowing that it was a salutary restraint
that it was imposing upon itself. In q time of
health it prescribed the rules that should be fol-
lowed towards itself when the fever of specula-
ton should have displaced the operations of cool
reason.
The time of fever came Speculation In every
thing took possession Of the public mind. West
ern lands were inflated; city lots were inflated;
railway enterprises were inflated; prices of cot
ton sugar, wheat in fact Of every thing, were in
fated to point Of exorbitant speculative pros
perity. Everybody went to swapping jackets
with promissory boot, and imagined all the
while that they were getting rich, when they
were only creating promises to pay. Many saw
the evil that was coming; but they, too, leaped
into the tide Of speculation, confding In their
judgment and ability to get out of it before the
impending crash came. The banks gave way to
the current and expanded their loans to fearful
extent Then II was that they committed the
crime which legislation had hoped to reach.
But pay day came, as 1t always does come. The
banks saw their danger, and suddenly contracted;
in few weeks they reduced their loans twenty
millions of dollars, and the crisis was complete.
But they were in the power Of the spectators,
who now saw that they must be irretrievably
ruined If the banks did not expand again. This
could only be done by violating the law. And
they have violated it.
Whatever may be the sanction that eight
Judges, or even the whole community, lends to
this violation now, its effects must ultimately be
disastrous to all; and when reason shall have
again assumed Its sway in the public mind; when
every man, instead Of contemplating bis promise
to pay which he has been led into giving by the
fever of expansion, shall take comprehensive
view Of the whole disaster and lite true causes,
the majesty Of the law will resume its
sway, and SPECTATORS, stockholders, bankers and
Judges may yet be consigned together to univcr-
cal condemnation This Is a fearful state Of
things, but there is o remedy, and we will see in