The New York Herald Newspaper, December 27, 1857, Page 2

those anfering. Yet with those advantage» with ‘ao exuberant harvest—with the consciousness that the law, the severity of which had before created such alarm, would be relaxed—the amount of alarm which has occurred and the number of suspensions have reached an exteut infinitely greater than | double the amount of suffering in1847. (Hear, hear). | ‘The most wonderful is, that throughout these | ‘five wonderful years you have had a recurrence of | events each of Which would in ordinary times have Drought about a commercial convulsion; for during this time = hava had a European war; during this time you have had two of the greatest States in Eu- rope ne gotiating large loans; you have had suc- cessive bad harvests in France. Any one of those instances woald, in ordi times, have thrown the whole fabric down. And, in addition to these, yon have had a silk famine, which, as it a most important branch of trade and production, would have of itself been sufficient to bring about this conimercial convulsion, which has been retarded | by the arrival of the treasnre. (Hear, hear). The right honorable gentleman, the Chancellor of the chequer, tells us that the commercial distress has occasioned by the derangement of capital and credit. Well, it is not for me to di the of the right honorable gentleman; will he allow me to remind himthat he is the first minister that ever made such an admission as to a commercial crisis? He is the first minister who ever maintained that commercial distress had been occasioned by the derangement of capital and credit. (Hear, hear). If, sir, we attempted to form an idea of the extent of privation to which he referred, the imagination of no naa in this house could possibly see conclusion. «Hear, hear). There wag a commercial convulsion in 1837. And to what was it attributed? Why, to the joint stock banks issuing so many bank notes! (Hear, hear.) And no person was more distinct in that assertion, no person was more precise in charging the crisis to that cause, than the right honorable gentleman the First Lord of the Ad- miralty, who has just been cheering the new doctrine of the treasury bench—that commercial distresp is occasioned by the disarrangement of capital and credit. (Cheers.) Well, there was another commer- cial convulsion in 1847; and what happened then? In 1525 the commercial convulsion was produced by the circulation of the notes of country banks; in 1837 it was produced by the circulation of the jaint stock banks; and, in 1847 it was, according to the great an- thorities, produced by the mismanagement of the directors in the cireulation of their bank notes. (Hear.) In every instance the great authorities have confounded capital with currency; and on every oc- casion they have a‘tributed to the least influential form of credit consequences which could only be ef- fected by the employment of capital on a colossal scale, and on such dimensions that no circulation of bank notes could under any ciroumstances ever reach. Sees) If the House permit me, I will show them ii*what the misapprehension lies as to the cause of the difficulty ugder which we are laboring; and it is in its solutl alone tlie we can ever flad the means of extricatiag ourselves from those per- petually recurring panics. Now, sir, it is a very curious thing—and I have often wondered at the rea- sou why we should persist in such « confusion of ideas, and always mistake capital for currency, and attribute to the least powerful instrament the most powerful reeulte—it is a very curious thing in this country that the two schools of currency, which agree on no other single topic, are of one accoyd on this, with but one exceptionable point. It was at that time the school arose which has since been so protainent in accounting for the periodical oceur- rence of commercial distre. It was at that time the Birmingham school arose. Now, sir, their opi- nions have been predominaut in this House—public men have accented them, and the origin of those og may be traced to the Bullioy act of 1810. (Hear, hear.) 1 am sure that no one in this house would speak of the labors of the Bullion Committee in other than those terms of respect which their in- tellectual efforts and public services deserve. (Hear, hear.) The Bullion Committee vindicated the great principle upon whick the happiness of the commu- nity mainly depends—the standard of value. (Hear, hear.) The Bullion Committee proved that the over- issue of inconvertible joe must be depreciated, aud in our case was depreciated. I think, how- ever, it might be shown by a fair ‘gument that the price of gold in these days was raised by other” causes besides the ‘existence of | jepreciated paper. (Hear.) Because, let ux suppose that our paper was depreciated—and that it was de- | preciated, T think no fair inquirer can deny, was de- monstrated by the Sullion Committee—stil! we must remem/r that the Bullion Committee sat fifty years | aI suppers they were not an exception to which makes time act in enlarging the ex d thereby impraying the ideas of me. -) Itis not impossible that the Bullion | ¢ should have been correct in every coucla- | ich they might have arrived; and yet could | ery consequenc age of progress. Anyth' h passed fifty years ago has been subject in interval to great modification. Our commerce, our ‘correspondence, as extablished fifty years ago, has undergone very great change. (Hear, hear,) It is ition = e that has since | pedantry to suppose that the Ballion Committee could have foreseen all the ‘ible consequences piinciples which they advanced and es- «after all th ry has gone through for the last fort all the experiments on our circulation sharp experience which even fj mmercial crashes which we hay ! the acts which Parliament has after all that has been written by me" , ave devoted their attention to this sab- the height of a science of the curre tion ax when the surdity to ney is in exactly the | f the Bullion Com- peaker at the t ot (Hear, hear.) Sir, the Bullion Com- | tly right in their principle, that | > paper money of this country had d by overisane: but I think they tended that conclusion to the rapidly and ru bank notes ¢ at par—(hear)—for I hold that the sad ction complete, and which can be establ i by irrefutable argument, between pa- | per money wid paper credit. The inconvertible notes | are py money, and may be subject to a depreciat- | ing nfl out bank not aden tag we | not be to depreciation. (Hear) We have | the retu the iasue of notes by the country bank: | es for a period of twenty fv These retarns | emanate fron! believe between 709 and 800 country | bankers, and when you examine them you at once see that there is some law which regulates the iesue of bank netes convertible ai par, and whieh is too | strong, not caly for country bankers, but even for Bri Parliaments. (Hear, hear.) m will find | returns that at different parts of the year won expands, at another period of’ the ,and ata third period—the mid uiescent; and that these flucta ations correspond with the occupations of the people among whom these notes are circulated. | (Hear key hear.) In the «pring, when the farmer buys va find that im the country distriets—for it ix | listricts the main circulation of the notes of | country bankers takes place—an increase of ciroula- u at the close of the year, when agricultaral in a state of depression, the circulation fi that in the middle of the year, or | est. time, the circalation is equal. Yon same state of things to have rege y period of a quarter of a century: and sible to observe a phenomenon of this ing with all the reguiu ty of a astrono- mmenon—a rising at spring, a sinking at he year, aud ane quality at autumn ~ atthe conclusion that the law re circulation of bank notes is much too legislator? (Hear, hear.) No one without art going th Stroug for an can suppose that all the country bankers meet to re | gulate the circultion ina certain manner. Of all classes of men they are the least liable to enter | into such a combination. These returns show | it would be imporstble for any issuer to | Which depend# entirely on the wants of the coun! If he attempts a forced | circulation be is only lending his capital; bis notes k instantly to him, and he suffers for his | advances, You cannot control the cirew | that coutro! the circulatios # convertible at par. You may lock a box; but no man can contend that notes «xo locked ap can affect the circulation. (Cheem.) We now come to the crisis of 1437. Well hy the «ame authorities—the ultra-bullioniste—that commercial convulsion was caused by the joint +t banks those banks which were founded in conse nente of the horrible sins of the country bankers jaughter.) It was said to be necessary that we | should have banks of a more efficient character than those of the country bankers, and that when joint | stock banks were e ‘These banks re then established were not of of those establiihments of w ich we have heard thie evening; Wut when the change in the y Wa made in 1835, I beg Stock banks were establi+! ed; they had s paid up capital of £15,000,000, and a subscribe’ capital to ten times thatamount. There were, in all, 47) wnehes; and their promoters ex pected that they would make a great profit by the circulation of their bank notes, When the comme eal conrdsion of 1837 occurred, it was found out the erreulation of the joint stock banks had increased to, 1 think, the amount of £1,500,000, between 1835 and 1827, Well, it was instantly mid that the commer cial convulsion of England was cansed by that £1 £90,000. ae this was a redundant currency and ireMlation. an inflated « The fall of great home and great distarbanees of capital and credit in England mm) the United States was attributed to this. In defenders of the joint | reply, it was urged by t 'y the business of those es tock berths that in ty lishment: had increased, and that there | was « legitimate hewn I by the public for an in- | crewed cireulation of notes of that amount; tut that was not listened to. Vet nothing could be more aheurd than to contend thot such 0 camvulnon could have arisen from such a conte, When you talk of overissue and bank directors to force the ciroulation of their notes, | | has been assailed by | just been the theatre, and which is al ‘ power of the | find it Ley orals, not to measure theyaselves by | ## soon aa there were serious difficulties to meet. Tt NEW YORK HERALD, SUNDAY DECEMBER 27, 1857. the tem years since that last revulsion of 1847, with respect ‘to the commercial circumstances of this country. Inthe ten years you have doubled your exports and imports—(hear)—and in ten years you have not added ane bank note to your bank circula- tion. (Hear, hear, hear, hear.) The whole bank note circulation of England in 1846-47—speaking from memory—was about 40,000,000; and by the re- turn I Saw, which is about 1855, and clreamstances have since occurred in favor of my arguments as I am informed, the whole of the bank note circulation of England, which was 40,000,000 in 1846-47, was 89,000,000 in 1655. Sir, all this proves that bank notes are, ina certain sense, a form of credit that is really falling into desuetude. We have heard much with regard to the influence of the bank notes on the commercial fortunes and operations, The truth is there is no doubt that from a variety of circumstances—-improved means of communication, the penny post, the telegraph, and a thousand mstances—you require less of this kind of circulation, even with your immense- ly increased transaetions, than ten rs . Thope the House will eve that, with the shows Thave attempted to place before them, I ap- proach see eg ee of the eg din Le re i yy government with no prejudice whatever. Iam not one of those who suppose that the disturbance of the capital and credit of a coun- try like England could ever be primarily occasioned by er ee re which you may make in a law for the circulation of, after all, a limited amount of the notes of the Bank of England. But it is im- possible, in my inind, to resist this conviction. The act of 1844, which, after all, was an act only to re- galate the circulation and the issue of bank notes, was an act drawn up in deference to those fallacious principles respecting issue which have so long and so fatally prevailed in this country, and that arrangements of that act are framed in deference to those mistaken views, and in consequence of the de- ference to those mistaken views, exercise anaggravat- ing influence upon commercial distress when it arrives. (Hear, hear.) Sir, the “at ob jection to that act is, to my mind, that it paralyzes circulation—circulation, which should at all times be ati endl cxpecislly active at K. Eggo of om merci , becomes stagnant vel that those circumstances have occurred. That act applies to all circumstances, however different, ex- the same treatment. Whether you are dealing with a foreign drain, or her you are dealing with a domestic drain, occasioned by a panic, the action of the bank is exactly the same; while, in the one instance, it is perfectly competent to control the foreign inconve- nience the very moment that there is an alarm, instead of encouraging confidence, thedank announces that it is itsef the subject of terror, and occasions and increases the very panic which its legiti- mate influence wht to prevent. (Hear, hear.) Jn closing these observations with respect to the bank, I would make one remark of a serious charac- ter. As | hope that this committee on the act of 1844 will receive its death blow from this debate, I would express my opinion that there are three great conclusi with re- gard to the management of the bi which are satisfactorily established by the evidence which we have before us. I think it is, by that evidence, con- chisively shown that, in the first place, the directors of the Bank of England really exercise no more con- trol over the circulation of their notes than do the members of this House. 1 believe that what is called management of the circulation of notes by the bank directors is a misnomer and a delusion. (Hear, hear.) Secondly, I think by that we have estab- lished that the directors of the Bank of England have a great duty to perform to the nation as well as to themselves, and that is by the policy which they extend to the management of their securities, a sub- ject of infinitely more importance than the circula- ‘tion of bank notes, and in the wise management of which the wealth of the nation is intimately con- cerned. It isin the regulation of their rate of dis- count, it is in the discremination and discretion with which advances are made by the directors of the bank that a beneficial influence may no doubt be exercised over the fortunes of this country. Thirdly, I think it does Lage that it is becoming a great national ob- ject, which statesmen ought to insist upon accom- gz, that thee should be in the Bank of England at the command the diree- i i. great reas lors, with which, when moments o) pris arise like those which have recently occurred, it shall be in their power so far to assist distressed commerce, | not by advancing capital, but by the possession of cur- rency assuring to the commercial world thal there shall be o currency, an active circulating medium, which shall be the medinm of exchange where real property is concerned, and that those interested in the pursuits of commerce and in the sion of real capita! shall not find themselves in the condition in which some persons of undoubted capital and capacity have been recently placed. 1 was surprised to hear that one of the most eminent men in this country, one whom I greatly respect, as I ever re- spect intellectual power, Lord Overstone, has de- Chared his opinion that discuasion upon this entject is inconvenient and injurious; that Parliamentary debate upon it should not be encouraged, but even prevented; and that we should rest upon the conclu- sions that we have before the House in the reports of our committees. Tam surprised that a man so emi- nent, so capable of maintaining his opinions by his ven, or by his tongue—a man who is, besides, a peer of Pari ment— sh give such an opinion upon the proudest privilege ot Englishmen, and, as I believe, one of the beneficial influences of which cannot be | exaggerated or over estimated. No: I hope the time is arrived when we shall come to some safe | and satisfactory solution of this long vexed quea- tion. But! sure, whatever — be the conse- quences of amendment, | am only acting rightl; when | rece end the House to delegate their functions no louger to select committees, but to show to the country that sent them here that they are equal to the fulfilment of great public duties. (Cheers) The Honse divided. The numbers were:—- For the motion ...............ssseeeees eee 295 Against... uz Majority for the motion ceceeee US tn reply to Mr. Newpre are The Craxce.ton or tae Exemrgrmr said it would be competent to the committee to recom. mend any alterations in the act of 1844. Whether the governmeut should adopt such recommendations would be a matter for consideration. THE F CIAL CRISIS IN THE UNITED STATES IN A FRENCH POINT OF VI (Transiated from the Paris Conrtitutionnel, Nov. 29, for the New You Henao} The United States have passed throu, storm without having been the least remy le | it. They are accustomed to breezes of this kind. Since the commencement of the century, their boat a dozen of gales which would have cast more solid vessels upon the coast, but which have passed lightly over them, owing to the ba of the navigators. in 1798, the administration of President Adams a financial | having quarrelied with the French government, the United States passed through a financial crisis of the severest kind. Ten years subsequently, whilst Mr. | Jefferson was President of the United States, a general panic shook the commercial prosperity of the conntry. It was again disturbed by war from 1812 to 1*15. But peace restored to the finances of the American Union all their elasticity. Speculation asanmed enormons proportions; it was a period of general fever and folty. The finances and commerce of the country underwent another crash in 1826. Recovering quickly, the leason of sickness was soon forgotten. tn 1858 caine a relapse. The President of the United States, General Jackson, undertook a campaign against the banks. which, after leading to @ great many commercial failures, ended in a general bankrnptey, which was legalized in 1841. Finally, fresh excesses of speculation, chiefly in connection with railroads, brought on in 1854 another storm, the precursor of that of which the United States have ready subsiding, not, however, without leaving traces of its passage. Accastomed to these saccessive and periodical tempests, the Americans regard them with a philo- sophical eye; they strike their sail* and throw over- hoard the heavy burden of their debts. They thus get safe into port with nothing farther left to dothan | to wateb m their comfortable harbor the struggle of the poor fellows who are still at sea. A New York newspaper lately observes It is fortunate for our banks that they n compelled to suspend; it will enable them mmmence ona fresh basis and with renewed activity.” There are different modes of viewing matters. He | js awkward indeed who does not discover the right one, Formerly bankruptey, or even a mere suspen sion of payments, was considered the most terrible calamity which could befall a merchant, There were many who could not outlive such a misfortune. But thie was a prejudice, an error. The young and cressive American generation has done away with it. They understand credit in a mach larger sense. Like the chrysalis in debt, they emerge from bank ruptey like butterflies, and never appear lighter, more briliant or adventurous than wi they have pasted through this kind of liquidation. Bat let us not take offence at the fact; noting could be more unjust. In the United States this summary settle: ment of accounts ig not reserved for foreigners alone. We occasionally hear of insolvencies #0 impartial there that they spare neither the American cifizen nor the inhabitants of the Old World. Besides, people are generally very tolerant, and do not pre- fend to reserve to themselves the monopoly of that freeh perepective opened to the unlimited extension of credit. The Am@icans invented it, but, the: have not taken ont a patent for it. The Old Worl is old fogy enough in its notions to regurd the panc- tnal fulfillment of its engagements as a point of honor. This is all very well. People are even st Pe ate" on bi py, Jini en rel id World wi y, bu find 1y do not choose to limit’ their progress by He Wet me remind the House pf what bas oocuryed,during | its standard. Hence the free and unfettered character of their credit institutions. In each State each corporation has its bank; here the grocers establish one, there the shoemakers another; a third is founded by the butchers. Each of these associations issues its own notes. What are the guarantees of these paper issues? The question bs ae easily asked than answered. In the majorit cases these issues represent o1 confidence ; they are but another name for the pri- mitive truck system. The security of the shoe- makers’ bank is shoes; that of the rs’ bank, colonial commodities. As long as confidence reigns, system holds good. In fact, there is no reason > quarter of beef, or a ity of grocery artic any other equivalent commodity. But from the moment that the financial phere be sarmepat tha teok they pram lion vency a gel commences. The bills which the day before served as the circulating medium for all kinds of exchanges cease to have any currency, and with a fortune in es cee chee ara is . ne merchants have a bank reporter, which fur- nishes them with full information on the sfjuation of each of these institutions. You offer them a bill, they examine it, and their first question betrays the uncer. tainty padier which Hoey Jaboe. Have you not another bill? they inquire of their customer,who answers in the pant merchant then consults his reporter, and according to the evidence there furnished, he ac- cepts or refuses the bill. Of course his decision is entirely sro being based on information of more or less doubtful origin. In accordance with the current rumoss, one part of the city refuses bills which are ted by an- other, e appreciation of value variesin different localities. A traveller who during a crisis proceeds from.one State into another is never stre of bein, able to pay his hotel nses. Rich o one side of the territorial division, he is without 9 cent on the other; and he must carefully watch his time to re- turn to his starting point, for the cprice of the pee may in the meanwhile invalidat« the pills it at it accepted. It is superfiuous to observe that in stormy times the cashiers of the banks close their doors. Those establishments do literally nothing towards maintenance of credit. With a common although tacit accord, they cross their arms and await the termination of the ‘storm, and by. payin nobody they clear the market. This time the yallto d_ directors sicaply decided not to ive - apeiteg. to sae shareholders. As usual, the ks 8 mn specie ents. Those who did not clove: Their doors took measures not to be importuned by too many demands for reim- bursements. In a certain city there occurred a It aeenied tat party had into igh: ranspire a gone into a neigh- boring State in order to brin ka ime amount. of the bills of a city bank, which it was his intention to Saeaes 3 that bauk for cash. His were watched, and when he was about to return with a c®rpet bag stuffed with the bills he had col- lected, his departure was annourfced by telegraphic despatch in the city in question. On arriving at the station he found the whole corporation which had established the bank ussembled to receive him. Hisses, hootings and threats were lavished upon him. He was shoved about, maltreated and thrust back intothe depot, where he took the first train that started for the place from whence he had come, esteeming himself fortunate at having got off with a few blows, and having escaped tarring and feather- ing. Thus excess in everything engenders the opposite excess. Where the action of the goverument does not make itself felt lynch law be oe its place. Unlimited liberty provokes the irregular control and brutal repression of the mob. When Dg le abolish the police as an obstacle to individual liberty they can only go abroad armed with revolvers, and they consequently present to the world the spectacle of scandalous and bloody quarrels in the streets of crowded cities. The Americans—we speak of the enlightened classes—are well aware of those vices of their social system, but no people are more willingly blind. hey continually t of their youth, and in fuct resemble those fiery and undisciplined spirits who mistake heat of the blood for truestrength, and treat as senile all those who do not exhibit, like them, the fierceness of untamed colts. ‘The fundamental vice of their institutions—the absence of all authority and control—they are some- times conscious of, but do not avow it frankly. They prefer to lay these excesses to the account of chance, of destiny, or of any other foreign cause than to acknowl their true wrong, which is the ubuse of liberty. expedients they employ to conceal this fault are sometimes puerile to an ex- treme. The proof of this lies in the ridiculous de- clamations in which the newspapers of the country indulge in their efforts to e: the financial crisis by the amplitude of crinolines and theextravagance ol Co pose of cry gong go Noth t wil jought that we are in, Nothin; of the sort. It is a serious piece of bulfoouery, ed riched with statistics, Custom House seports and economical considerations, which the gravest and most accredited Sywepepers of New Yort have exe- cuted before Europe. deceived crediters they al- lege as the reason of their insolvency thst the com- | merce of the American Union had Tuined itself in silks and laces for the ladies, but that allthis would soon be reformed. A fine guarantee for the future, truly! An exag- gerated issue of bank notes, enormous expenditure in the construction of railroads, foolish speculation ; in all kinds of values, adventurous and usscrupulous | trading, involve the United States in aises whose revulsion is felt everywhere; and we arecoolly told that the cause of all the disasters andlosses that follow line | It is quite right for a people not to allow them- selves to be depressed and doconrnged,mnore espe: cially by a panic, when they possess, likethe United States, immense resources and all the elements of a solid prosperity; but neither must they allow them- selves to appear as if they were trifling vith a thing so sacred as the security of commercial rdations, for by such a course they not only lose al. dignity of character, but all chance of further confidnce. [From the Paria Constitutionnel, Deo. t.) ‘The information that we have collected »nables as to determine more correctly the causes of he Ameri- can crisis, which nothing seemed to predcate, and which has burst upon the world so suaienly. It* furnishes us with instructive facta. These show the consequences of unlimited liberty in matters of credit, industry and public works. Theyteach us at the same time how to appreciate the adcrantages of the economical aystem which has been ‘astituted in our own country, and which is based upen the expe- rience and the progress of the last sixty This system is moderate; it is fownded uj commen right and upon liberty of labor, but it takes general interests into consideation, and admits the intervention of the government whenever public utility is in question. One can jridge of the relative value of the two systems by theirresults, There are two principal causes of the American crisis: one is to found in the orgutization of credit itself; the other in the rashness md in the excess of speculation favored by that orgunization. A multitude of banks have been establisied; with the help of these banks a tipon etterprises have been accumulated; a multitude of railways have been created; but as no concern was manibsted as to what returns these euterprises might mike, and as uo heed was taken as to whether theexpense of so many works did not exced “the disposable strength and capital of the wuntry, it has happened that the edifice thus reared end sup- ported by artificial means has suddenly broken down —the raflroads carrying away the banks, aad the banks carrying away in their torn in the general ruia the trade and industry of the entire Union. We have already had occasion to explain how the credit system bas been organized in the United States, if indeed, one can appl the name of organi- zation toa thing which is totally lacking in that quality of the banks. Some lish. ed without special charter, on the of conforming themselves to the stip local laws regulating credit associations ° sideration of which they are allowed toissue bills: the others are established in virtue of acharter of the Legislotare: they are bound to depnsit securi ties in State stocks to the amount of the bille they are anthorized to ise. Now, do our readers desire to know how many banks, with or without charter, there are at present existing in the United States’ No less than 1.416. There is not » town which — ental will be without one. There is not a trade which, in New York for example, ix without its representative bank. There are special banks for shoemakers, tailors, grocew, &e. This recalls to onr recollection a bill posted ov ine walls of Paris in 1845, and in which the chimney doctors +(fumistes) claimed, through pretendid delegates, the right of having at least two representatives in the National Assembly. ‘The declared capital of the banks with charter was, in 1856, 370 millions of dollars; of those with out charter 125 millions—altegether 495 millions of dollars. ‘This capital, as we have just sated, was nearly all in paper. resources in specie did not reach 60 millions of dollars, amd, with # feeble a metallic reserve, they wae not afraid to discount to the amount of millions. ‘iris may seem incredible. To en ome readers ty understand “it, it is necessary that we shoyld state that ey system has entered Ne, and that divided into infinite fractions, tw one dollar pills, it is used in all the transactions of daily life. if this general use of paper money facilitates emissions, it has alo for result to gender the position of the hanks more precarious and Yo ex- pose them to frightfnl reverses. The American banks were able to operate yy with their pre money, which bad not a sufficient representation in specie, aa ag Uy they were aided by confidence and prosperity. it all defects of sich an organization were sure to manifest themselves uly required @ paujc, an waugyal delgicucy of specie, to cause a run upon and {o threaten the in- suhiency of so feeble a metallic reserve. Beagles, of what use could the values which the banks had on pigoed prove in such an emergency? The first efiéct of the crisis was to render it impossi- ble for thent to realise those values. They were therefore inevit condemned to forfeit the essen- tial conditions of their existence and to suspend the payment of their bills. om whence did the embarrassmenta which pre- cipitated the catastrophe arise? That which al- ways happens when one misuses the facilities of ‘credit, occurred in this case. ns pinages headlong into enterprises. Land was 8] on for the sudden creation of new cities, 4 roads were lated in on still vaguer chances of a table . Immenee lines of railways, through jesert countries, were established for an agriculture and iver which did not exist. There is not in the United States, as here, a moderative govern- ment influence, which, studying constantly the gene- ral condition of resources, stimulates or tempers the it of enterprise, and grants or adj conces- of public works according the unem- ployed capital of the country. On the other side of the Atlantic everything is left to the ap- reciation, too, often blind of individual initiation. Be tions in railroads were therefore not amongst elements wanting to a fever excited by the exag- gerations of credit. In the rich and thickly populat ed regions communications leading to the same point were multiplied, without any attention being paid to the fact that two, three or four opposing, lines might cause the ruin of each other. In estern Stat and Territories the formation of com was en- couraged by large concessions of lands made along roads which were to be built through arid and sterile countries. It was in facta delirium, which could bay end in a catastrophe. igantic works were undertaken—but with what means? The companies not the capi- tal neeeded to execute and finish them. They scarcel, pao any more than that which they rid obtained by bie aga of their shares in Se al markets, principally in England, which now su! the consequences of her credulity. What course did they then pursue? They had resort to the system of besroneias Wheat constitutes, in fact, the financial system of American society,and which it U aaereesx upon a large acale. To give an idea of the extent to which these companies made use of it, it is sufficient to state that hed are now laboring under the weight of floating debt amounting to the enor- mous sum of of eight bers pt millions of dollars. But, credit, there always comes a trying moment—that when accounts have to be squared. When all this mass of railroad stock encumbered the market ey ended by that with which they should have begun, namely, by imguiring what the stock really repre- sented. What has resulted from that tardy investi- gation? The discovery of cruel deceptions. As to the railways in a ge 4 state, it has been found that, in consequence of the multiplicity of the lines and the competitions between them, thoir traffic has been progressively reduced, while the continual in- crease of the prices of labor and of materials has added to the expenses of the companies, so much so that many of them jepy not obtain, in 1858, re- ceipts enough to cover tI cost of working theirroads and of keeping them in order. As to the companies constructing railways in desert regions, it was found that, with all their concessions of lands, they an estate which might bring up some- thing in twenty or thirty eh but which at present is not likely to yield anyt! ing. Frm the moment that the imaginary domain of speculation was aban- doned, and realities were arrived at, all the railroad stocks were doomed to fall, and fell in- deed to their true value. Only as is usually the case after great financial delusions, the awaking was sud- den and the fall instantaneous. It was then by the discredit of railroad stocks that the evil commenced. It then spread itsélf from point to point, and with an irresistible force, from the very nature of the organization of American credit. Credit in our ancient Europe, what- ever may be the extent of its diffusion, rests always upon something positive, and as a last basis upon specie. In the commercial community of the United States, the credit of one only rests upon the credit of others, and it is therefore enough that con- fidence should be lost in one branch of national acti- vity to puta stop to the credit of the whole. Not being any a able to negotiate for cash their shares and bonds, nor to get them received as guaran- tees of loans, the banks and companies of all des- criptions found themselves with portfolios filled with inconvertible values, and so it has proved impossible for them to meet their engagements. The banks have therefore been compelled to suspend the pay- ment of their bills. Failures have taken place one after the other in the different branches of busi- ness; first in the great railroad cungene. such as the Illinois Central, the Erie, and the Michigan Rail- road, of which the capitals were respectively thirty, tetris and fourteen millions of dollars; after- wards, in the large manufacturers, then in the retail trade. The catastrophe has become general, and we now find the Western markets overflowing with agri- cultural produce, the sale of which is stopped by the difficulty of procuring drafts, which even on the best houses of Europe can only be negotiated at a loss of 15 per cent, and even these only for small amounts, Such is the balance sheet of unlimited liberty en- joyed by the United States in industrial matters, No doubt they will recover themselves, but at what price? Only by a general liquidation, which must come sooner or later. The vanks founded ou mere credit must be dissolved ; the coripanies which have laid down rails bought with borre money must gre up the lines to companies free from debt ; and speculators who have been over adventurous mrgt submit to bankruptey. This is an imperious necessity, to which, in spite of all expedients, they must col And now, in presence of this exposé, have we not reason to congratulate ourselves that we are jected toa eg which encourages such exe: freedom of labor is also the principle of onr industrial constitution, to this liberty, as to all others, we ac- knowledge and set a limit—the general interest of the country of which the State is a representative. We regulate it, and we even make it relax when that interest demands it. For instance, while giving the monopoly of a bank of issue to a great establish- nent, we regulate the circulation, avoid the abuses of extravagant credit, and are able to meet difficul- ties without resorting to any empirical or extra legal means. Again, the intervention of government in the construction of railways enabled us to group the concessions pursnant to a general system, to avoid wasteful expenditure and ruinous opposition, and to | foep the quantity of work done in each year within the limits of our disposable capital. Our system, it is true, is not so facile in practice as that of the United States. What so convenient for a government as to cross its arms and let every | individual do as it may seem good for his own in- terests? But we expect our government, while main- tainigg the right of every one to employ his capital, his infelligence and his labor in such # way as may | best vit him, to interfere when the public interest requires it. This is a delicate task, which often ex posse the government to the charge of interfering 00 much or too little. What an outery was made, for instance, by certain speculators when the decree of %tb March appeared, just after the peace, an- nouncing that the government had resolved not to make any new concessions of railways for some time to come! Bat how entirely was the wisdom of this astified by the event! Where should we be now, if, following the example of the United States, we had placed no check upon the spirit of enterprize? It isthe intervention of our government, exercived with the fullest appreciation of the wants of the country, which has protected our ¢ ree and finances by apportioning in the interest of all the ane action of those two principles so often in con fliet—liberty and authority. (From the Paris Pays, Dec. 8.) ‘The last news from New York shows « great im- provement in financial affairy. Money bad reap: oo in large quantities, the stocks have improved in price, and the position of affairs in general seems to be much better. This is not actonishing at all in a country where those immense commotions tn pub- lic fortune depend upon fictitious causes which arise or die away on account of the institutions and = manners, without it being to prevent them by regulating in 9 reason able manner the ‘social in me and by reforming that which is adventu or anrely in manners. Some persons look even npon the American crises a an evil inherent to American society; and the readiness with which the commer cial crises and the dixorders reeniting therefrom are accepted, contribute not a little to diminish the moral sense among the people. (From the Paris Debate, Deo 10.) We place to-day onder the eves of oar readeéa an article from the New Youk Henan, in whieh that journal examines the financial crisis of the United tates in connection with that of England. At the moment that the news of the disasters in the English market reached the other side of the Atlan- tic, the situation was improving in America. It is curious to see how the New Youre Herany views the consequences: which the English crisis will have upan the American banks, It says:— All the rotten parts of onr commercial frame bave been cut out; ail the solid parts remain. Our debt to the forcien ‘world i¢ in a fair way of being wiped ont by thn solvency of the individual debtors; hut while the Bri tish,and French manufacturer must loge part and may lone all of his claim, the goods will remain here. The riches will remain with ws; that is the only reault perceived by the American journal, and that consoles it for all the rest. IJtisasystem of easy liberation. OPERATIONS OF THE CREDIT MOBILTER. Viewpa (NOW, 28) correrrondence of London News | In my last letter I promised you a true, fall and rtienlar account of the Austrian Credit Mobilier. will now ende vor to make good that promise. To this end, however, and for the better an and- ing of the subject, it will be necesmry to take a somewhat retguspectivg view of fue gircumtanges | that have hitherto redounded as little to the honor } that at first gavé tise tothe idea of, and subsequently led to the foundation of this institution. During the war in the East (from 1853 to 1855) the finances of Austria were ina very deplor#ble condition, chiet- ly o tothe necessity of an immense expendi- ture for the maintenance of an army consisting of bagi 500,000 men; and despite the national loan of 000,000 florins, patriotically conceived and landably carried into effect, for the puree of paying off the government debt to the National k to such a minimum as to enable that institution eA ee its Re gore payments, ry — to aveee preciat x currency of the country, it was found, pevertheless, at this 3 rfod, that nothing short of a positive influx of foreign capital, in +. ld enable the government to re-establis! the currency of the empire upon a safe and solid ba- sis. Hence the famous sale of the government line of railroad from the Saxon frontier (Bodenbach) down to the southeastern frontier of Hungary to the Paris Credit Mobilier, cnd the consequent establishment of | the Franco-Austrian Raihoa: yy. This fiscal | transaction created no small sensation in the mo- neyed world at the time, and though it did being large capital, in hard silver coin, into the coffers of the government ictnevgd Best Pereine had, nevertheless, made an excellent bargain with the Austrian gov- ernment. and earned a fat Ee) for te esi and ler. The Rothschilds, indignant at thia un- looked for success of their parvenu rival, began to bestir themselves, and to muster their old adherents, in order effectually to give battle to the audacions | upstart on the very next occasion when another fat , ‘try of foanee in the Himmclpfortgase, Shortly nance in the Himmel . | sheewarte: Baroy Breck returned Pte Constantine | . an of a speedy peace luro) e dawn. "This very eo ae constituted Ages | tent share of that “good luck” for which his Excel- lency was once so proverbial, and with which he in- augurated, as it were, his accession to the post of | Minister of Finance. At this period also the suc- cessful operations of the Paris Credit Mobilier were everywhere spoken of, and the level pnberiagt 2 tatents ats chief director were lauded to the skies. M. © Pereire became a celebrated man, a sort of financial demigod, at least on the Continent; and if the Rothschilds had not lost. caste, they were certainly oblij to admit that, for the time being, the parvenu Pereire pore Jor for | pegs ty err Cre crepe Haceog forfalready, at all the cipal places of exc! a int rate veoking houses had enlisted under the luerative standard of Pereire, and swore by the “ Credit Mobilicr de Paris.” Such were the charac- teristi¢s of the period when Baron Bruck took office as Minister of Finance. His excellency had been a merchant, a trader, and a uulator, in former days, as well as a Minister of Commerce, and an ambas- sador. All this must be borne in mind ; for Lereaf- ter it will be seen that no one except # man of such diversified talents as his Excellency is would have yentured to persist in so speculative a policy as he has done to this day. Considering the positive advantages that would accrue to the finances of the country by a farther influx of the precious metals from abroad, Haga Bruck very logically conceived that the establish- ment of an Austrian Credit Mobilier, if founded on a capital of silyer specie, would be a legitimate and means taining the “consummation so de- voutly to he wished.” Negotiations to this end were consequently opened with M. Pereire, who, was then Sxeetly in vogue. Thie enterprising financier declared willingness to undertake the job, but pertinaciously objected to the large capital (sixty millions of florins) which the Minister proposed and deemed it necessary to insist upon in order to attain his object. M.Percire, on the other hand, con¢ended that a small capital would be a less burden, and afford comparatively a larger profit to the share holders of the einen Ca ae He instanced the ies ital of the Paris Credit Mobilier, and the admi- rable results of that institution. But the ad- vantages of the shareholders of a similar in- stitution in Austria was a# secondary consi- deration with the Austrian Minister of Finance, whilst with M. Pereire it was essentially « primary ; one. The statutes of the pro Austrian Credit Mobilier had been already concocted, and the paying up of the capitel in hard silver coin had been readily conceded by M. Pereire. Nevertheless the negotia- tions with that gentleman were interrupted by cer- tain iahigees set on foot y end Rothsehild party, and were finally broken off for two reasons: First, M. Pereire would not consent to so large a capital being fixed as the fundamental busis of the institu- tion as that demanded by M. de Bruck; and second- ly, M. Pereire was unable to obtain sati-factory arantees against undue influence being exercised y the Austrian government upon the operations of the propgsed institution. Under these circum- stances, and “desirous t» prove to M. Pereire how easily his services a be dispensed with, ne- jations were now a opened with Baron hschild and his party. The indefatigable ser- vices of M. Louis de Haber, in promoting these negotiations, now became fatal conspicuous. The standing and position of this gentleman in the commercial world at that time are too well known to require comment; but they were pro- i As rightly appreciated. When he saw that nothing was to be got out of Pereire, he wisely ten- | red his “ good offices” to the opponent party. if the job could not be secured in one way, there was no reason why it should not be accomplished in another. M. de Taber's personal connections with some of the leading members of the Austrian aris- tocracy, in the my of private industrial enterprises, culiarly qualified him to instil into their minds the love of speculative enterprise. For the most part, these noblemen, though in possession of large landed estates, had comparatively but little command of ready cash. Thus situated, they readily adopted the Spry suggestions of de Haber, to the effect. hat the getting up of an Austrian Credit Mobilier would, in all probability. turn ont as Jucrative an rm as that of the creation of the Credit jobilier at Paris, by which the original founders had amassed immense fortunes, and enriched all fig connected with them: thus doing also an in- inity of good to others, perhaps also to the country and to the community at large. Of course this lat ter consideration was decisive with the Austrian nonety, in question; and thus a new and a ver: markable era sprung up in this couptry, the charac- teristics of which were that the Austrian noblemen of an almost endless descent, accustomed from time immemorial to consider all participation in public associations of capital and intelligence, except for objects of benevolence or for the promotion of sci entific or agricnitural pursuits, as incompatible with his high station, now abjures this antediluvian prin ciple, and adopting the more enlightened views of his compeers in the west of Burope, sits down at the same board with his plebian fellow creatures to pro- mote the commerce and industry of his country This, however: is unfortunately putting a better fa upon the matter than the case in question warrants; for instead of promoting these great interests of so- ciety, members of the board of directors of the Austrian Credit Mobilier have allowed them ed themselves, almost blindly, to be dragged into a whirlpool of reekless stockjobbing speculations | of their illustrious names as to the bencfit of those | whore interests they have mereaponely undertaken | to protect in that capacity. But all this will be made | more apparent hereafter. Well, then, to resume the thread of my story, it must be stated that the negoti tions with the Rothschild purty were concluded, and | atthe same tj strange and inconsistent as it may appear—t rinciple of basing the capital of the Austrian Credit Bank upon a silver currency | was abandoned, but the principle of » large, an wiedly capital, to be paid ap in the depreciated paper currency of the country, was adbeod to. he Imperial concession for the establishment of an institution under tho fallacious title of a “Credit Bank for commerce and trade,” was granted to a list of ilustrions noblemen, in conjunction with Baron Rothschild, of this place, M. Laemel, the banker, of Pragne, and some other persons of minor note,» as founders of the institution. The large amount of shares allotted to most of these noblemen and ? peared this morning in person, and in reply gentlemen, with the exception of. Baron Rothschild and M. de Laemel, was altogether mnjustifiable, if the limited command of ready cash at their disposal be atall taken into account, and the detrimental consequences arising from thie paucity of their means, were made manifest enough by the final wording given to the statutes of the new company. First of all, the Minister of Finance had no alterna: | tive but to abandon the principle of having the shares paid up in silver coiggas M. Pereire, the only com petitor for the reali®tion of this sonnd idea, had receded from the project altogether; and, secondly, the Minister was obliged to admit the dangerous principle of allowing the institution to make ad- Fances npon ite own shares, ax without this conces. | sion ite founders would have been anable to pay up | the shares allotted to them, Now, if, for argument’s sake, we were to admit the opinion of many sound national economists, who hold that the Crédit Mobilier in Pavis ix the wary prnctape of a leg, mate modern swindle, and yet in mind that by the statutes of this institution all advances pon deposits of its own shares are prohibited, what opinion should we be warranted in forming ‘of the Austrian Credit Bank’ A farther comparison of the constitutions of the Paris and Vienna institutions may here be well-timed, and not uninteresting. The so-called statutes of both companies are very similar in princidle, and yet their hag os 9 tions are founped on a very dissimilar basis, For instance, the Paris Credit Mobilier may extend ita Speretigea to all partsof the known world; whereas those of the Vienna Credit Bank are lienited to the confines of the Austrian empire. Both institations are founded on the principle of being constrained to speculate in the public fanda and industrial shares only for the rive. And, in trath, nothing can be more one sided than this. Whet would be thought of any private specalator or stockjobber, whose operations are olways for the rige and never for the fall? Would he not be held to be at least an oddity? Paris ins! tution, has the meons at its command to counteract, at least in part, this anoma- lous condition of ita operations, by haing permitted to do the ao-called prepinga or option buninegy om the . | upon which only 30 per cent were then ' ure,’’ because it is no failure at all, either simple exchanges. This liberty, how’ ed. by the Vienna itution. | not en owing to the comparative this, that, rors of the latter institu of the fourea soiple ing | ~ sian of opm “a shares was conaned ™ et by which means they » espqupied 8e see} these shares to their right had sub- ing them up; that the same. "\ders at tai to be conceded to the shareby. “Vienna if consequently, the funds of the © “nese. were always more or less absorbed by y. " and therefore not free to be disposed OF ». advantage; that thus the most extravagas’ tion @ la hausse was reckleasy encourages finally led, as inevitably it could not do ot toa tful reaction and fearful ruinou! and you will agree with me that I have alre ficiently proved the inferiority of the ele constitution of the Vienna Credit Bank | pared with the Paris Credit Mobilier. Nevo excellent results might still have been obtair | the operations of the Vienna Credit Bank had been conducted with superior intelligen rudence and strict loyalty. But of cou ravagant price to which shares of tl tion were p in the spring and summ\ year (the shares of the nominal value of 2 stock reached very nearly florins!) could ne’ been justified. For two reasons, however, torily results were rendered unattainable. choice of the boa: of directors and of the ing directors was an unhappy one; and, the interference of the Ministry of Finan operations of the institution has of necessit; it the most lamentable consequences. should tire your readers’ patience and intruc discreetiy on your valuable space, I will res communicat.on of details on these points fc my next lctters. THE NEW YORK HERALD AND THE F CIAL CRISIS, From the Manchester (England) Guardian, D ‘hen the monetary panic in the United States | genera! suspension of specie payments by the that country there was a very strong impression land, would certainly be compelled to follo: amplo of their brethren in the United States, their doors agtiust all claims for specie payment the first intelligeace of the effect produced in thir reached New York it caused great surprise, and rr No smai! amount of disappointment, ina: there were no indications of the anticipated bank and some le at New York appeared ‘due respect bad not been paid to the ma “smazh’’ which had taken place on that sid: Atlantic, seeing that English merchants and slood pretty firmly, notwithstanding the bad nes came upon them. At length, however, we beginning on this side of the water. 4 few reck mercial gamblers it Glasgow aad Lis were pe by the Americans :itures and dragged with tb rotten banke; aud in the end the government t pradent to suxpend the opogation of the restrainiz in the act of , and to permit the Bauk of Ka make a further issue of notes agyiust securities iy In other wor@s, the bank was placed in} ame position in regard to its issues of pape. h is oceupied by the best banks in the Statc York in the of best times. Like them, it provides for the due payment of ‘ts notes by the deposit of ment stocks, and its notes are consequently a theirs have been at any former period. In the United States, however, the position of t of England docs not seem to be very well unc many persons there apparently believing that t, sure which Las been adopted amounts to somethi suspension of specie payments in England, sucl existed for some time past in the United Sta almost all writers on the subject its importance § ,reatly magnified and ernggerated. A posterip letter of our New York correspondent, in another isa tolerably fair sample of the geuera! run of which is to found in New York newspapers a1 lars; whilst the following extract from the Ni Herat of the 25th ult., serves to show the view tained by more excitable writers :— We publish elsewhere a succinct account of the ses pensions which have been made by the Bank of Engl the present one must not be confounded with nor it \iged of by those. Commerce was not king then nor did England have, at the beginning of the presen ‘& young and powerful rival who could dispute with by crown. The present suspension is far more than + bank failure; it is the failure of the whole monetary | reney system cf the empire, and will produce t spread and mos’ lasting effects. The Bank Act of Ii! trived with all the skill and experience of Sir Rob: who began bis career with the gold bill that brought © resumption of specie payments in 1821, after twer | ears of bank suspension, and which was counted eing the great preventive of the very thing thal occurred, ts demonstrated to be as weak'as all the ¢ vices that have been brought forward to stay the ¢ comes upon the immense system of bank credits » public confidence is withdrawn, Much of the supremacy of England's merchant prir now pass away from (hem and pass into the hands younger rivals on this side of the Adantic. Her m have not the reeuperative energy 7 Rossensed by our 0. though the measure she has now adopted as a pailic present disaster may a! relief for a time, she Urough the struggles of a resumption of specie pe wich may produce effects aa permanent, though les diately evident, ax those of the panto. ‘Por these # she bas not those vast resources that exist with lus crops of cotton, wheat and other product jelde and varied climates. It must be admitted that the allegations containe preceding extract are somewhat surprising. “T sent suspension,” certainly, is not “a simple ba, plex; and, so far as the Bank of’ England is con there is™uot the slightest danger of failure. ‘Then, how the Bank is to “go through the struggles of ar tion of specie payments,” which payments neit! now, nor are likely hereafter to be suspended at « ‘we conceive, requiro some ingenuity to explain satisfaction of the English minds, at any rate Whether the antleipations of the New York Hera: tho effects of the present crisis, in transferring cot from England to the United States, will be realié shall willingly wait to see. Possibly it may in some degree on the adoption of a step which the , * has more than once suggested as probable—nam repudiation by American merchants of debts ¢ European creditors. If that should prove to be on, manifestations of American “ recuperative ener may certainly give some advantages to the smart the other side of the Atlantic: A merchint who, | Tegarding his obligations, keeps his funds togethe der to make a fresh start with a clear stage, will ¢ with some advantagp another who, to use t! known language of Beau Brummell, “ muddies perty away in paying bis debts,” We are not, hoy very seriously alarmed at the probabie result of th in the direction indicated by the New Yors Herat Amongst other errors and misstatements which ¥ in the American papers in reference tothe Bank ¢ land, ie one for which also the New Yoax Heras! | sponsible. It isto the effect that “the Hank of F charter has been suspended, and an unlimited ir small notes authorized."’ Everybody in England quite well that neither the Bank of Eugiand nor an.) English bank has,or is likely to obtain, power t! small notes, by which, of course, notes under five must necessarily be meant. ‘ t Supreme Term. ‘ Before Hon. Jadge Davies. SUIT POR DIVORCE AGAINST JOHN B. HOLME Dre. 26.—-Anna Maria Holmes vs. John Bb ~-Messrs. Abbott appeared on behalf of the pl) in this case, who sues for a divorce from ho band, who was convicted at the Coart of Se. last month of the crime of forging his wife's na’ a deed for the sale of some property, and senten, the State prison for a term of 15 years and 6 m+ It appears that the Sheriff proceeded to Sing, for the purpose of serving the defendant in y! with a copy gf the complaint and summon Sheriff could not identify Holmes from the rest } prisoners in the «ame workshop, and the Warde the prison refused to point him out unless com) hy law todo so. Under these circumstances og applied for an order for Mr. W. Beardsley to, cause why he refused to aid the Sheriff in sere process of Jaw on @ prisoner ander sentenc crime. t The Judge granted the order, and the Ward¢ question from the Court, said that if there wa’ law ‘to compel him to point out Sheriff, he wonld comply with it. The Judge said he should adviee the Ward comply with the request of the Sheriff, there! be no law to compel him to do #o, but there, pei things done without positive law; for inst he (the Jndge) had given the Warden advict there was no law to compe! him to do so. , The Warden said be was informed by the T Inspector that he was not bound by law to a Sheriff in the service of processes, and that f against the rules of the prieon to do #0. ' Judge Davies again advised the Warden to the Sheriff; he would advise him to have the ec Tolmes taken from the workshop and browgh the office of the prison, where the Sheriff could’ him with the process of the Court. " The Warden and the Judge then held a pw conferences fier which counsel for plaintiff t | for the Warden to permit the Shea papers on Holmes, otherwise the & | be permitted to take a witness with hint identify the defendant. te prisoners t’ Liability of Hotel Keepers. MARINE COURT. Before Hon. Judge McCarthy. Dee. 4.— Benjamin Wolf vs. Predevick DP ‘This is an action against the defendant, a4 thet prietor of the Prescott House, on Brondway, fo recovery of the value of wearing apparel, lod stolen from the room of pii@ntiff, who was a the hotel. It appears in evidence that the ply had been a eat in the hotel from the midd > »tothe 6th of November, 1 the Mth day of Octoher last, the plaintiff's was entered, and two new coats, &e., belongiur him, were stolen therefrom. } seco held ‘Ve defendant liable, and reng f iu for the j cintifY for the yalue qf thee Perty, agd gosty gt eujt. 4