White Cloud Kansas chief. [volume] (White Cloud, Kan.) 1857-1872, 1857-12-31

4
keep on hand gold and silver equal to one-thir,
Of its combined circulation and deposites. |
this proportion was no more that sufficient :,
secure the eonvertibility of It's notes, with tn
whole of Great Britain, and to some extent tn,
continent of Europe, as field for its circulation
rendering it almost impossible that sudden anc
immediate run to dangerous amount shouldb b,
made upon it, the same proportion would Ger
tainly be insufficient under our banking system
Each Of our fourteen hundred banks has but
limited circumference for its circulation, and il
the course ola very few days the depositors anC
note-holder might demand from such bank
sufficient amount in specie to compel it to sus
pend, even though il had Coin in its vault equs
to one-third ofits immediate liabilities. AND
yet am net aware, with the exception of the
banks ofLouisiana, that any State bank through
out the Union has been required by its charter
to keep this or any other proportion of gold and
silver compared with the amount Of its conbin
ed circulation and depOsites. What has been the
consequence? In a recent report made by the
Treasury Department on the condition of tbs
banks throughout the different States, according
to returns dated nearest to January, 1857, the
aggregate amount ofactual specie in their vault:
is $50, 349, s3s, of their circulation $2l4,77s,.
SD, and of their deposites $3.50 ISL 1852. Thus
it appears that these banks in the aggregate
have considerably less than one dollar in seven
of gold and silver compared with their circula-
ton and depostes, 1t was paIpable therefore
that the very first pressure must drive them to
suspension, and deprive the people of a CONVEX
tible currency with all its disastrous consequent
ces. tits truly wonderful that they should have
so long continued to preserve theitlEdit, when
a demand for the payment Of one-seyenth Of
their immediate liabilities would haya driven
them into insolvency. And this is the condition
Ofthe banks, Notwithstanding that four hundred
millions of gold from California have flowed in
upon us within the last eight years, and the tide
still continues to flow.
Indeed, such was the extravaganza Of bank
credits that the banks now hold considerable
less amount of specie, either in proportion to
their capital or to their circulation and depos-
ties combined, than they did before the diseoV-
cry Of gold in California. Whilst in the year
l64S their specie in proportion to their capital
was more than equal to one dollar for four and a
half, in IS57it 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 deposites; in 1851
it is not equal to one dollar in seven AMI hall
of their circulation and deposites-
From this statement it is easy to account for
our financial history for the last forty years. /;
has been history of extravagant expansions in
the business Of the country, followed by ruinous
and most enterprising men have been tempted
to their ruin BY excessive bank loans of mere
paper credit, exciting them to extravagant i'm.
portations of foreign goods, wild speculatiOns,
and ruinous and demoralizing stock gambling
When the crisis arrives, as arrive it must, the
banks can extend no relief to the people. In a
vain struggle to redeem their liabilities in spe'
Gle they are compelled to contract their loans
and their issues; and at last, in the hour Of dis.
tress, when their assistance is most needed, they
and their debtors together sink into insolvency
It is this paper system of extravagant 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 ex
traEagant importations, and has counteracte6
the effect of the large incidental protection af
forded to our domestic manufactures by the
present revenue tariff. But for this the branches
of our manufactures composed of raw materials
the production of our own country-such as cot
ton, iron, and woollen fabrics-Would not onl,
have acquired almost exclusive possession o
the home market, but would have created fo
themselves foreign market throughout thu
world.
Deplorable, however, as may be our presen
financial condition, we may yet indulge in brigh
hopes for the future. Ne other nation has eve
existed which could have endured such yiolen
expansions and contractions of paper credit
without lasting injury; yet the buoyancy o
youth, the energies Of our population, and tn
spirit which never quails before difficulties, vii
enable US soon to recover from urpresent fnan
: cial embarrassment, and may even occasion u
7 speedily to forget the lesson which they haT
taught. r r.-..r AKA, si-.s,
In the meantime it Is the duty ofthe Govern
ment, BY all proper means within its power, t.
aid in alleviatingthe sufferings of the peopl
occasioned BY the suspension of the Banks, an
to provide against recurrence Of the same ca
lamity. Unfortunately, in either aspect Of tn
case, it can do but little. Thanks to the indie
pendent treasury, the Government has not sus
/, pended payment, as il was compelled to do b
the failure of the Banks in 1887. It will con
tinue to discharge its liabilities to the people
gold and silver. It's disbursements in coin wi
pass into circulation, and materially assist in re
storing sound currency. Fronts high credit
should we be compelled to make a Temporal
loan. it can be effected on advantageous term
This, however, shall, II possible, be avoided
, but, If not, then the amount shall be limited 3
the lowest practicable sum. g
Ihave, therefore, determined that whilst n
useful Government works already in progress
shall be suspended, new works, not already com
menced, win be postponed, if this can be don
without injury to the country. These necessar
for its defence shall proceed as though there ha
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