Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1878-06-07

regulating the currency, equalizipg ex-
changes and maintaining specie payments.
After full elaboration, the bill rechar-
tering the bank was passed by decided
majorities in each house; but Gen. jack
SOL, for reasons which it is needless to dis
cuss, vetoed the bill, and as it could not
command the requisite majority Of two
thirds OF each house, it failed to become
law.
Not satisfied with having defeated the
re-charter in 1888, General Jackson order
ed the Secretary of the Treasury to remove
the deposits Of government moneys, which
had, heretofore. under the authority of
law, been kept in the Bank Of the United
States, from that bank, and to distribute
them among the State banks.
AS might have been anticipated, these
deposits gave a fictitious strength to these
banks. They commenced at once liberal
system OF dlscountlng on the faith of the
government deposits, thus inverting the
natural order OF things, and lOaning money
constituted actual capitol qnhich they oauned!
The Bank of the United States, being
about TO expire, was powerless to restrain
the State banks in their mad career, and
they proceeded to the widest excuses, Then
came the Flush Tines which have been
SO graphically described by Judge Joseph
e. Baldwin, i'll his admirable book, bearing
that name. The condition of things was,
in many respect, similar to that which
existed from 1911 to 1878, and more recent
ly in Confederate times.
LII 1885 Congress, perceiving the grave
mistake which had been committed by de-
posting the moneys OF the United States
III the State banks, and the disastrous re-
suits which had flowed from it, passed
what Was called the ''Sub-treasury Bill.''
by the terms OF that law the President
was required to withdraw the government
deposits from the State banks, and place
them in the custody of bonded officers of
the government.
The passage of that law at once disclos-
ed the weakness Of the state banks. They
had been doing business on a false prlnci-
pie. They were unable to meet the de-
mands upon them, and in May 1887, every
bank south Of New England, suspended
specie payments !,
Then followed the old process of strin-
gent contraction, after eXtravagant ex-
pausion. The inflated currency, like a
| full blown bladder, pricked by a pin, col
| lapsed. Nominal values shrunk to almost
| nothing. Nominal fortunes vanished like
| bubbles and widespread ruin and bank
| ruptcy were the fruits of this mischleyouS
policy. The disasters which followed the
| Revolutionary war, and the war of 1872,
| were in some measure attributabe to those
| wars, but the crash Which came on the
country in 1887, Was the result of par.izan
prejudice and unWise craftsmanship.
| Nor were the mischiefs of this revulsion
confined to private citizens. The gov
eminent Of the United States Was reduc-
ed to state of insolvency. Its resources
were in the hands Of broken banks, and it
was left without the means OF paying its
current expenses. On the 31st of May
representative Of the District Of which
| Augusta then constituted part, and 1
| remember that there was not money
enough in the treasury Of the United
| State to pay the members of Congress the
eight dollars per day to which they were
entitled for their services. And, worse
| still, when Congress sought to borrow the
| insignificant sum of five millions Of dol
| lars, to meet the immediate wants of
| government, the National credit was so
| low. that the loan could not be effected
| without pledging the proceeds of the pub
lie lands as security for its payment.
The Wing party under The lead of Mr..
Clay, sought to give relief to the country
| by the mode which had proved successful
| on two former occasions. viz the charter
of third Bank of the United States. The
| two houses by respectable majorities passed
I the bill, but, unfortunately, John Tyler
who had succeeded to the Presidency on the
death of President Harrison, under the in
! fluence of bad advisers, vetoed the bill, al
though he had himself been an active agent
in framing it.
All that could then be done for the rel eff
of the country Was to pass the tariff of
1912, which replenisEed the Treasury, re-
vived the public credit and gave great
impulse to industry, in all it's depart
| ments.
Thus, after nearly seven years of travail,
the third great financial difficulty was
overcome.
From 1913 to 1861, Notwithstanding
many mistakes Of policy, which retarded
our national advancement and were at
tended with some disturbances, the coun-
try was in a condition of comparative
prosperity-the currency had been brought
to the specie standard, in particular local
tiles, but business operations were serious
ly impeded by the want of a circulation
of uniform value in all parts Of the Union
and by burthensome rates of exchange.
l think, from the above narrative that
it must be obvious to ali unprejudiced
minds That | have not erred in stating that
the immediate cause of financial revulsions
is he contrGctionof currency which is the
%SNNSoesAJ W eo'eN"''o SeDl|eTeoeOfSs
THE PANIC OF 1873.
come now to the consideration of the
distressing condition Of money matters,
under which we are now suffering. twill
be found that it presents no exception to
the general rule which have stated.
OF the secession Of the Southern States,
in it's political aspects, l have nothing to
say; nor do propose to dwell on its coll
sequences in moral, social, OR industrial
point of view-my remarks will be confined
to its financial consequences.
During the four years war which fol-
lowed, it became necessary for both sec
tions to incur large debts, by the sale of
bonds and the issue of treasury notes. AS
the war progressed these issues increased,
and with each emission their value de-
creased. At one period in the North
dollar In gold was worth $3.50 III U: S.
Treasury notes, and in the latter part Of
1864 in the South, d dollar in gold had a
purchasing power equal to $50 in Con-
federate States Treasury notes!
Bargains made with reference to this
kind of currency were, in substance,
gambling contracts wagers on the
result Of the terrible conflict which was in
progress. When the war ended by the de-
feat of the Confederate armies and the
overthrow or the government, hundreds of
millions OF Confederate bonds and curren-
cy persisted in the hands of the holders. In
this way, thousands OF those who had been
over sanguine of the success of the Con-
federate cause were reduced to insolvency.
Of the amount of the issue of Confederate
obligations in their various forms, it is un-
necessary to say anything. as, with the
close OF the war, they ceased to be of any
practical Importance.
The matter which concerns us now is
the amount of the obligations of the |
United States, which, since the restora
tion of the Union have become our obi
cations.
In the progress Of the gigantic struggle,
the resources and credit of the United States
ant tric hs