Arkansas true Democrat., 1857-10-27
The Suspended Banks.

lG puzzles us to tell when paper mouey oahNS do most harm-when they pay specie, or when they suspend specie payments. Certain 1t ls that it is when they paying specie, that they are laying the foundation of all the evils that we suffer during times of suspension. Certain it is, that, when paying specie, they, from time to time, so infate the currency as to lead men into the widest speculations, and then when this iufation can no longer be maintained, they ruin the merchants in order to save themselves
 In debate in the British House of Peers, more than thirty years ago. Lord Liverpool spoke some truths, which, though they are old, ought not to become obsolete.
 "Tne doctrine" he said, "maintained by some noble lords, that nothing was better than paper circulation convertible into gold, is true to this extent-that if convertible into coin, the evil would cure itself, whilst one not convertl- ble into coin would lead to nothing but ruin- But how is the cure to be operated? By the downfall of thousands and hundreds oi thou- sands and the convulson of all kinds of pro- pertv. It is true that the evil carries It's own cure but with such terrible consequnces that 
 the cure is worse than the evil"
 Viewing the terrible sufferngs the banks have inflicted on the community, in thelr effort 10 sustain specie payments, we could regard their suspension with some degree of patience, If they would at the same time suspend the mak- ing of new loans and discounts, and also sus- pend the declaration of dividends. Owing already more than they can pay, they ought not to increase the amount of debts due by them-and so long as they cannot pay what they owe, they have in reality no profits to diviGe. It is very easy to conceive, that dur ing times of expansion, solvent men may enter into engagements that they cannot meet with punctuaity in time of contraction, but which they may fulfill if a little time be allowed them. The banks being released from the ne- cessity of paying at al might now one would think, grant little more time to their debtors. Allow the plal ter and the farmer time to carry the produce of their fields to the merchant-al low the merchant of the inland towns time to carry that produce to the sea port-allow the exporter time to ship that produce to Europe, and to receive back the value of it-in addition to this, by making no new discounts, and by gradually calling in such amounts as the bank debtors can pay, so reduce the mass of paper cur rencv as to detain in the country the supply of California gold Do this, and in less than year, the banks may, not only resume specie payments, but commence new expansion, to be followed in due season by a new contraction.
 But we have little hopes that the banks will act on these principles. Under the spacious pretext of affording relief" to the public, they will increase the amount of bank credits and thus increase the evils we shall have ultimately to suffer.
 in August, 1914 This was followed by seven | years of confusion, sometimes eXpansiou some 1 times contraction ending in '2l. These seven years of confusion were followed by eight years of duneSs of business, ending in 1929; and | these eight years of dullness of business, were followed by between seven and eight years of apparent prosperity, ending in l636-'37.
 The second suspension of specie payments occurred in May, 1887. This was followed by six years of confusion, ending in 1843 These by seven years of dullness of business, ending in 1850; and these again, by about seven years of apparent prosperity, ending in 1857.
 Like many other diseases, the paper money disease is subject to the law of periodicity the periods appear to be shortening. Between the first and second suspension of specie pay ments, there was an interval of twenty three years. Between the second and the third the
 interval has been only twenty years. As the years of confusion, seven in the first cycle, were reduced to six in the second, perhaps they may in this, the third cycle, be reduced to five.
 Perhaps the reader will say this is gloomy prospect. And it is, but he ought not to be discouraged. The sky will not all the time be overcast with clouds. In the midst of the first cycle of confusion, "reljef" came in the shape of United States Bank, and multitude of State Banks. Never were there better times" than from July, 1917, to July, 1918. Never were the banks more liberal in their discounts.
 So right in the midst of the second cycle of years of confusion, we had good time" In 1859, the banks increased their current credits, and our imports of foreign goods, which, in 1888, were only l13 millions, were sweled in 1889 to l62 millions.
 But the reader must not suppose that when l the "good times' come, they are to last. Such measures of "reief" as are devised by sus- pended banks, and by State legislatures acting under the influence of suspended banks, never do permanent good. The evils growing out of the first suspension, felt most severely ill 1 l8l9-'2l from five to seven years after the sus- pension begun. And the evils of the second | suspension were felt most severely in 1842-'43, between five and six years after that suspension occurred. So it may be on the present occasion, making due allowance for the shortening which appears to be taking place in the fits of the paper money disease.
 | Northern Periodicals.
 | Harper's immense establishment, under the | effect of the convulsion which seems to have | deranged the finances of the country, is said to have failed. If it were possible that this fail