The weekly north Iowa times. [volume] (McGregor, Iowa) 1857-1867, 1860-12-12
The Rationale Of the Panic.

That our readers may understand little
more precisely why and how the present
financial crisis has occurred, they must uu-
derstand the process by which the business
Of the cotton States is transacted. It off
fers entirely from that to which we are &C.
customed in the Northern States, and the
worst feature Of it is, that any derangement
Of credit in Charleston, Mobile or New Or.
leans, is felt with greater severity through.
out the entire region dependent on them for
supplies and export facilities.
The planter consigns his rice or cotton to
some factor, who disposcs of it, and, after
purchasing such articles as were ordered at
the time Of advice of the consignment, sends
an account Of the sales and disbursements
and balance on hand to his principal, who
draws on him when he needs the money,
TIL it is exhausted. The purchaser of the
cotton then either ships it, consigned to
some house abroad, and sells the draft
against it with the bills of lading attached,
to the banks or foreign agents, or sells the
cotton Itself to the same parties. Bills
drawn on London or Liverpool are chiefly
at sixty days sight, with the expectation
that the shipment viii be received and sold
before they mature. The present distrust
Of bills drawn by Charleston banks arises
| from the fear that owing to the insurrec-
tionary action on the part of mob, Charles.
ton may be declared no longer port of en-
| try, and be blockaded, so that cotton could
! not go forward, when, Of course, their bills
would be returned, with heavy damages
!, against the endorser. II secession or any
attempt to selze the forts should take place,
the port would be closed, the banks would
not buy either rice, cotton or bills; tho
planter could not sell his crop or buy his
supplies; the merchant could not sell his
goods, nor get his pay for those already sold
on credit, and universal bankruptcy would
prevail throughout the State, with the great.
| er severity this year, that the corn crop il
so deficient that many planters find that it
| will take all they receive for their cotton to
purchase food for their hands till the next
crop comes in. When to this is added the
heavy taxation inseparable from the main.
tainance Of larger bodies of troops and pur.
chase Of war material, it is evident that the
immediate effect must be TO derangs the Vi.
| tai circulation of the slave States and sub.
ject them to deplorable losses, which tho
North must share in proportion to the amt
due it from the South and to the extent of
its ordinary commercial transactions with
section.
1t is to prevent this interruption OF com.
mercial circulation that our banks and busi-
ness men are making great efforts, and wo
may add great sacrifices every day. They
may accomplish much, but we fear they
cannot prevent gradual but steady de-
preston Of value for some time yet to come.
There is very large body Of negroes to bo
fed in the South, at an extraordinary ex.
pcnse. That cost will increase from day to
day until the new crop comes in, and till
the extent Of this extraordinary expense
can(?) ke estimated, the North cannot set
tie up with the South, and settling up is a
process which must preccde any permanent
arrest Of declining market Our people
must not, therefore, look to any immediat.
improvement in our financial condition.
The clouds in the political horizon may DO
speedily disposed Of; but the financial at
mosphere cannot be SO easily cleared. The
commercial relations between the North
and South cannot be restored until both
sections agree upon terms Of mutual dis
charge, result which cannot be attained
until not only the hallance Of Indebtedness.
but the resources Of its payment are pretty
accurately ascertained.-N Y. Eps. hbst.