New Orleans daily crescent. [volume] ([New Orleans, La.]) 1851-1866, 1861-12-27
Bankruptcy at the North.


bankruptcy at the North. ~
The subjoined article, from the New Y York Herald
Of the 10th, is substantially confession of bank.
ruptcy. The great Yankee nation, which has been
hoasting of its millions OF men and billions of dol
lars with which to conquer the South is exhausted
in less than six months. The capital of the bahks
has been sunk in worthless treasury notes.-the
Government can borrow. no more. Individuals re-
fuse to loan unless victory can be won, and that
is very remote probability.
In his desperation, says the Richmond Wing OF
the 2lst, we hear that Chase proposes to borrow
three hundred millions from the banks, and give
them United States bonds for five hundred millions
as security. To give credit to these bonds, he fur
ther proposes to give lien on all the property Of
the United States. We don't see how this will
mend the matter. The lien will be worthless, and
the banks have nothing but worthless paper to
give. financial " smash-up" is imminent and in
evitable: 7'-" n' =S5, ss'=.# ~ @
Geo.. From the New York Hsrald's Money ArticIel =
The fluetaation in the stock market for the past
fortnight mas been extremely slight. The attitude
OF operators has been one Of suspense waiting to
see how Government was going to raise money for
the war, and now England was going to receive
the Trent affair. 1t was expected that the report
of the Secretary of the Treasury would solve the
former problem; but the Secretary threw upon
Congress the responsibility of providing ways and
means, and his report consequently exercised no
effect whatever upon the market. The news per
Hansa, which had been measurably anticipated, y
caused slight though general advance; but peo-
Pile generally seem to be waiting Tor further ad-
vices. -
The public mind seems quite prepared for q
general suspension of specie payments, and there,
is no sign of panic or alarm anywhere. Many per-
SONS still cling to the notion that Congress can de-
wise some means OF obtaining money without re-
sorting to the policy which has been invariably
adopted by nations engaged in expensive wars.
1t would be very agreeable to see these hope real
lied. 1t would be great thing for our financial
future, if we could carry ou the war to the com
plete suppression of the rebellion without disturbing
the ordinary relations Of currency. But, to calm
observer, this seems as impossible as to yanqnish
the rebels without calling large army into the
field, and taking pains to drill it according to the
rules Of war. We must, in finance, as in strategy,
submit to the laws of nature and tread the beaten
path No nation, whatever its financial standing,
has ever been able to raise the enormous sums re-
quired in great wars rapidly enough, by the ordi
nary process of loans, to satisfy the wants Of its
government. 1t ia not reasonable to expect that
we can form an exception to the rule.
Mr.. Chase has, thus far, done better than any
foreign finance minister ever did. He has raised
over 5000 100000 in five months by loans at rea
sonable rate of interest. But in order to do this
he has obliged the banks Of the three leading loyal
cities to sink their entire capital in Government
loans, so that they cannot now lend any more
money 10 Ene government, unless Lney ulSn0neSty
lend the money of their depositors, which does not
belong to them. The public have relieved the
banks of about $4s 900 900 of 80 Treasury notes.
and have besides absorbed nearly $4,000, 900 of
demand notes. They would subscribe literally
still in the event Of victory of decisive eharac
ter.
As to the reform in the currency proposed by
MIR. Chase, it commands the approval of every body
who is not interested in country banks but it is
obvious at glance that its operation under the
most favorable circumstances will be so gradual
and so slow that it cannot serve the purpose of
financial expedent in the present pressing ener-
gency. 1t seems, therefore, that we have reached
the point which has usually been met with much
earlier by nations engaged in expensive wars; in
other words, canwe borrow, except at some ex-
travagant rate of interest," the large sums now I'M
psratvely needed rapidly enough to subserve the
necessities of Government, If this be so, Congress
can only pursue one course, which is to authorize
Mr.. Chase to pay contractors, soldiers sailors and
other creditors OF the Government in paper which
the war.
The country is rich enough and confident enough
to absorb any amount OF this paper, even il it
reached the sum specified by Mr.. Chase as the
utmost that would be required to carry on the
war till July, 1868; and there is no reason why it
should fall to anything below mere nominal rate
ef discount. That it would cause the banks to
suspendspecie payments as precautionary meas
ure to prevent boarding, is admitted on all sides.
The only question that now calls for debate-ad-
hitting the position of Government to be what we
have stated7-is when our banks should take the
step of suspending specie payments. Many of our
bank managers feel natural scruple at doing SO,
when the necessity for the measure is neither i'm
| mediate nor obvious to the masses. But it simply
resolves itself into question whether the banks
| shall suspend while they are strong or whether
they shall wait till they are forced into suspension.
| 1t is transparent that when Government begins
to pour out irredeemable paper money people will
begin to draw gold from the banks for the purpose
of boarding, if they can do So. And experience
wa II n ret
out of boards than it is to prevent the beginning of
hoardings. If the banks wait, and allow their
timd scruples to prevent the adoption Of bola
war policy at oncea they will probably go through
a rapid process of depletion and be forced to sus
pend with twenty millions of gold on hand, wher
| they might have suspended with forty. Whether
their depositors will gain anything BY this course
banks had IA recognized head or were under one
general management, the features of the cast
would have been realized long ago, and ther
would be no hesitancy now in adopting the or A
policy which can be safely pursued, due reg az
being had to the separate interests of deposit 'ior
bank stockholders the Government and F-ss
at large. ....