Fremont journal. [volume] (Fremont, Sandusky County [Ohio]) 1853-1866, 1858-01-08

cd for their qualification, except notorious
insolvency which makes credit impossible.
Always most active when prices arc rising,
circulation increasing, and credit expanding,
these desires, unchecked, never fail, under
such circumstances, to reach their crisis in
enormous and universal indebtedness, TO be
speedily and certainly followed by wide
spread collapse and disaster
For nearly ten years past the crcumstan-
ces Of the country have tended TO these re-
suits. Tho influx Of gold from California,
has rapidly augmented from year TO year
the volume OF the circulating medium
which has bcen still farther expended by a
vast though not equal, increase Of credit
currency. In ls4s, beforo the importation
of gold from California had commenced, tho
respective amounts Of coin and bank notes
in the country were as follows: coin $780,
753,027; bank notes S12S,606,041. In
1857, the respective amounts were, coin,
$276, 6,100,442: bank notes, $2l4,77s,222.
The aggregate currency in ls4s was s25s 2Se rs
The increase Of currency was--.-...--.-.. 2s66le54e
The increase Of coin was--..--.--.---- 149367 AIS
The increase Of hank notes was. s62721 ISL
The rapid augmentation effected 10y the
increase of coin alone, could not fail 10 pro-
duce marked effects in the rise of prices, in
the multiplication of transactions, in the en-
largemcnt of credits, and in the increase of
debts. The additional stimulation of this
tendency by the further introduction Of
$s6,272,lsl of credit currency sufficiently
accounts for all the effects which have been
witnessed
No system of currency can insure COM
pletc protection against speculation, debt
and revulsion; but that system, which, more
than any other, directly tends TO produce
and inflame these evils, is, without question,
the system of credit currency. That sys-
tenn, therefore, chiefly demands precauIion-
ary measures against such results.
Credit currency in the United States is
supplied by banks, in the form of notes
circulating rs money. The number Of
these banks, on the lst of January, 1856,
was 1898; their capital, $343,874,272;
their circulation. 1874, $50; their depos-
its, $212,7O5,662; their other liabilities,
s04,947,s23; their specie, S59,3l4,O63; /;
their rcsurces other than specie SS2O,7l3,-
1862. The number of banks at the present
time probably somewhat exceeds l4OO-
Their circulation is stated at S214,77s,S2
and their deposits at $23O,359,352, and
their specie at S60,000,000. 1t needs but
glance at this statement to perceive that
n currency SO expanded must greatly stimu-
late hazardous speculations, and tend TO f.
nancial discord: and that under the exigen-
cy of such dscord, the credit currency must
become, in part, or altogether, inconycrtible
into coin.
In our own State there are 81 banks; 36
branches of the State Bank and Independ
ent Banks, organized under the act of lS45,
and 10 Free Banks, organized under the
act of 1851.
Here follow tabular statments of the
Ohio banks on the Sd of August 1857, also
on the 2d of November, 1857.
1t will be seen from the above statement,
that the condition of these banks, so far rs
il is tested by comparison Of specie and
other cash means with immediate liabilities,
was stronger in November thanit had been
in August. The laws under which these
institutions were organized, were framed
with especial reference to the security Of the
bill-holder All the branches of the State
Bank are made sureties for the circulation of
each; and the convertibility Of the notes of
others is required to be guaranteed by plcdg-
cs of State or United States bonds.
These salutary provisions have protected
the people against serious losses from de-
probation of the notes Of the banks organ
lied under them, and it is highly creditable
TO their management that they have passed
through the recent crisis, made doubly per-
ious to many of them by the embezzlement
of their cash balances and collection bills at
New York, without suspension of specie
payments.
Still, it cannot be denied that the danger
of general suspension has been imminent,
or that some of these institutions have ac-
tuallv been in condition of legal, while
others have been in condition of virtual
suspension. These facts must necessarily
direct your attention TO the legislation nee
cssary to protect the people against the haz-
ard of so great an evil.
How far tho provisions of the charters Of
the Banks organized under the act Of lS45,
will admit of additional guards against sus-
pension, is n matter of doubt Tho decis-
ion of the majority of the Federal Supreme
Court, that the charter Of Bank by Leg
islative enactment is contract, and cannot
therefore, be modified by subsequent legis
lation, makes the reformation of evils in (
credit currency always difficult and often i'm
possible.
At the present moment however, it seems
not improbable that an act might be framed
acceptable to these Institutions and bene-
fetal to the community, by which mucl
larger specie basis would be provided fo
! circulation and deposits than is now re
: quired, and other additional securities oh
t tanned against suspension.
The act of 1851, under which the othe
: Banks are organized, is amendahle at tn
] discretion of the Legislature. Their circr
! lation is secured by the deposit of equ'
: amount in State or Federal Bonds. 1t
t plain that in financial crisis, when bond
e of all descriptions arc deprecated, this ST
t curity becomes inadequate. | recommen
, III i,