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JOURNAL OP BANKING, CURRENCY, AND PINANCE".
Notices of New Works or New Editions......
......... 189-14 4
Art. 1.-AN EXPOSITION OF THE CRISIS OF 1857.
TIIL CRISIS A HOPEFUL EVENT-THE "SICK NAN WILL GET BETTER IF HE HAS CONSTITUTION ENOUGA -30 FATAL LESIONS IN AGRICULTURE, MANUFACTURES, RAILROADS, OR COMMERCE—THE AMERICAN BOLSE BOUND, BUT THE PARTNERS IN DEBT TO EACH OTHER-SKKTCH OF THE GROWTH AND PROSPERITY OF THE PARTNERS-PUBLIC OPINION AS TO THE SOURCE OF IT--THE FINANCIAL PARTNER, VITII GENERAL APPROBATION, INTRODUCES THE SAME PRINCIPLE INTO HIS DEPARTMENT, AND ISSUES PAPEE MONEY, AND OUTSTRIPS THE OTHERS-COMPLICITY OF THE STATE WITH THE FINANCIAL PARTNER-TIIE SYSTEM IS UNEQUAL, BUT THE OTHER PARTNERS THINK IT ALL RIGHT, AND MORTGAGB THEIR PROPERTY MORE DEEPLY-A PRINCIPLE SETTLED: “THE MORE DEBT, THE MORE MONEY"MONEY BOTH VERY PLENTY AND VERY SCABOE, AND PROPOSED REFORM&-STATEMENT OF ACCOUNT BETWEEN THE PARTNERS-NOTICE OF SETTLEMENT-HOW RECEIVED-WHY OBJECTIONABLE-118 DISASTROIS EFFECTS, AND THE OSTENSIBLE REASONS FOR GIVING IT-BKETCH OF THE FINANCIAL PARTNER STRENGTHENING HIS POSITION-EXTENT OF IT - CONSEQUENCES TO THE REST OF TID HOTSE-THEY SUE FOR RELIEF, AND IN VAIN-ABSTRACT RIGHITS LIMITED BY TERMS OF PARTNERSHIPTHE RIGHT AND WRONG OF THE CASE-TAE COLLISION-GENERAL PROTEST DAY-QUESTION WHICH WENT TO SETTLEMENT-QUESTION STILL PENDING--PROBABLE RELIEF MEABUEK8--INERYECTUAL AS REMEDY--INJUSTICE AND TYRANNY OF THE BANK SYSTEM-NATURE OF DEBT-MONETWHAT DOES NOT CONSTITUTE MONEY--THE CREDIT SYSTEM--ITS LEGITIMATE PROVINCE AND BOUNDARIES-WHAT IS MONEY--PRIVATE DUTIXSUITABLE FOR TUK TIMES.
The financial troubles of the country need no longer want a proper name. At first, scouted as panic, senseless and causeless, for the full cure of which only a little confidence was needed; then discussed under the Dame of the pressure, which was tardily admitted to be the fact by the public journals, wbile large volleys of rhetoric were discharged at the panic, its guilty accessory these troubles at length arrived at the dignity and importance of a crisis. The suspension of the banks of New York city, after two months of boast and defiance, during which period they were (according to their own showing) alike impregnable under siege and assault
, and bearing aloft the banner on whose ample folds was inscribed the financial honor of the country, ceased to be a dim possibility, but a
present and significant fact. Virtually, if not formally, the other banking institutions of the country followed 'suit, and suspension general, if not total, became the order of the day.
I think we may congratulate ourselves and each other that we at length reached a crisis. For a crisis, unlike a panic, has in it elements of hope, and often premonitions of returning health and strength. Our "sick man," the financial system, has been for a long time in unhealthy condition - his bloated form and feverish activity proclaimed that-but of late, like Job, covered from the crown of the head to the sole of the foot with malignant boils slowly progressing to a head, his sufferings have been intense. But, with the crisis, the aching and throbbing malady reached its acme of agony; relief or dissolution must follow. And the constitution of our Young America is by far too firm and springy, for us to think for a moment he is on his last legs. Let us try and learn the facts of his case.
In July last, the fears which had been entertained earlier in the year respecting the crops were fairly dispelled, and it became evident that not merely average crops, but abundant plenty, would crown the harvests of the year. An unusual breadth of land had been put under plow and harrow, and the earth was justifying the largest expectations. It was nowhere disputed that never before had the soil been so largely planted, and yielded so bountifully. Whatever else might happen, there could be no lack of bread. Not only enough for our people themselves to eat, but after a careful comparison of figures, from eighty to one hundred millions of dollars' worth to sell to other nations, after the necessary abatements to supply the wants of a rapidly increasing population. The great interest of the country--the agricultural—was safe beyond contingency. How great the values which have been lifted from the soil by the powers of nature, under man's husbandry, since the snows of 1856, will appear
best from census returns, and necessary inference from them.
In 1850, the annual value of the agricultural products of the country was but a fraction short of $1,300,000,000; the estimate of 1854 was put at $1,600,000,000; and it is believed the figures of the year 1857 reached $2,000,000,000. It is, and was seen to be months ago, a handsome income for a single branch of industry-agriculture.
Take another department of labor-manufactures. They have been in the main prosperous and growing. Though, in exceptional cases, and for brief periods, falling short of the expectations of proprietors, (when were men's calculations of gain ever fully realized ?) the manufacturing interest has been steadily and largely increasing. In 1850, its annual creation of values footed $1,000,000,000, and it is no unreasonable estimate that places them, in 1857, at $1,500,000,000.
Thus, in two departments of labor—agriculture and manufactures—there have been produced by the labor and skill of our people $3,500,000,000. But when to this vast sum are added the profits which have been made by our ships, plowing every ocean, bringing and carrying the commerce of the country, and the profits upon our domestic or internal commerce, which together were rated, in 1850, at $1,500,000,000, the annual returns from these three sources alone reaches from five to six thousand millions of dollars. A people whose yearly creation of values is measured by figures of this magnitude ought not to reckon themselves insolvent with out a clear demonstration from facts and figures that such is their condi
tion. An income like this is large enough to stand some losses, and pay for some improvements upon the farm, without breaking down the proprietor, and sending him into corduroy, and his wife and daughters into home-spun.
But improvements had been made upon the farm which complicated the question. Nearly 25,000 miles of railroad had been built, and the money had been partly borrowed. They had cost $825,000,000. In many cases they had paid good dividends upon the stock, and kept up the interest money; in others, not-for they had been pushed boldly in every direction and the creditors were not now pressing for their pay. Whether they were a 3 or 10 per cent investment for the individual stockholders, there was no doubt the railroad improvements were a remunerative investment for the farm; the country had profited in its increased productiveness vastly in consequence of them. They were no South Sea Bubble —no Credit Mobilier--through which everybody was going to get ric they knew not how-by doing they knew not what -- by the simple force of accumulated capital, and whose splendid assets turn out, upon investigation, to be but splendid debts. Whatever shifting valuations may be put upon the stocks by the caprices, or fears, or reckless gambling of Wall-street, the iron highways and the iron steeds remain, and can earn their living, pay, pay for their keeping, and something more, in dragging to the seaboard the heavy granaries of the West. Upon these vast highways of commerce and pleasure rest some $80,000,000 of direct railway obligations, and about as much more in State and city obligations, issued for railroad purposes; and this comprises the whole registered FOREIGN indebtedness. We speak not of the whole bonded and floating debt upon the railroads of the United States owned at home—that is another matter. One hundred and sixty millions of dollars upon property which cost eight hundred and twenty-five millions, is no ruinous and hopeless debt. Twenty per cent only of their cost owed for abroad—the balance, of 80 per cent, belonging to the American people. Any one of us, owning a house which cost to build it $5,000, would not regard a mortgage upon it of $1,000 as an alarming indebtedness. What, therefore, as a people, we owe abroad for our railroad system is no fatal affair; much less fit cause for a general downfall.
What else do we owe for abroad? Nothing but the account current of our merchants for such importations as their shipments of produce and gold have not already canceled. Put it at $90,000,000—one quarter's purchases, according to last year's figures. Two hundred and filty millions foreign indebtedness, and five thousand millions profits on agriculture, commerce, and manufactures! Foreign debt, 5 per cent on one year's income--a large part of the debt not yet due! And when to income is added the value of capital which the industry and thrift of former years bas produced, that has not been spent, but remains the farms, the fences, the dwellings, the shops, stores, manufactories, bridges, railroads, steamboats, ships, mines, &c., which constitute some part of the wealth of the country, and rated, exclusive of United States government property, at $18,000,000,000, it becomes no mere flourish of declamation, but just sober truth, that, as a people, not only are we not ruined, but wealthy and prosperous beyond all precedent. The AMERICAN HOUSE is sound undeniably.
All this was apparent three months ago; for with the balance sheets