Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-12-02
oUR GovERNnENr Is cRrrIcIsEp.

The London Economist has had a
shrewd eye on our commercial interests
ever since our financial troubles began.
Being edited in the commercial metrop-
oils Of the world, and in nation whose
general attainments are rivaled in only
one or two other countries, and whose
practical knowledge of economy is
probably not rivaled anywhere and,
moreover, being conducted with marked
ability, the Economists advice is GER
tainly worthy Of our consideration. 1t
is especially to be needed when we re-
member that the Economist is a cham
pion of the great maxim, that every ma
ton in the world has a direct interest
in the welfare of every other nation.
And, further, how shall we, a
rational people, disregard its coun-
sells, when they are support
ed by irrefutable argument At
ter commenting upon the nature of the
difficulties which the banks experienced
up to recent date, the Economist
asks, what, In such circumstances,
government ought to do for the banks.
To this question the following answer
is made:
''In our Judgment its duty is exceed
ingly easy to write on paper, and ex-
ceedingly hard to effect in practice.
There is the greatest danger in its Civ
ing any kind of help; if possible, it
ought to give no aid whatever. Bank
ing is trade Just like any other; the
lending of money is purely merchan-
ical matter as cotton spinning or
matchmaking. In this case, as in 9TH
ers, help to the bad competitor is harm
to the good competitor. If you want
not to have good cotton factories you
have only to subsidize the bad ones;
you have only to say that the Govern
ment will pay the bills of the insolvent
cotton spinners, and solvent ones will
not exist any more. In the same
way the greatest discouragement to
sound banking is a help to unsound.
Failure is the penalty
which nature imposes on bad banking;
and failure gets rid of the bad bank.
But if the Government prevents the
failure, it not only shares the penalty
but continues the evil The bad bank
still exists, and is the more trusted be-
cause it has been helped; as the Gov
eminent has helped it once, the public
expect that the Government will help
it again. Probably the bank itself
thinks so also; and having been saved
once from the natural penalties of in
caution, it will not care much about
being cautious again. y These
reasons are IN argument perfectly
conclusive; but we admit that it is
most difficult for government to act
on them. The collapse of large sys-
tenn of banking causes so much evil,
and that evil affects so many persons
that it is most difficult for a govern
ment to be passive in it. On every
side it is pressed on to "do something"
and it is most difficult to refuse. A
least iron" executive would refuse; it
would say, "All he'll to these bad banks
is so much impeachment to future good
banks; it is so much sacrifice of future
good to avoid present pain. We are
trustees for the future nation, and we
must resist the cries of the present
nation" But least IRON executive
like this is very difficult to find and is
especially difficult in free States. For
an elected government to deny the
wishes of its electors is near to an i'm
possibility. Though sound principles
commands government to give no
aid at a great collapse of banking
credit, we do not expect that principle
often to be- obeyed. Much too often
the present evil will be cured, though
at the cost of greater evil"