|
|
 |
giving them work in Central Park, recently purchased and
then in course of development. The charitable societies
and people of the city established soup kitchens for the
needy and starving thousands, so that danger of an
uprising was averted. This brief panic is notable for
the role that telecommunications plays. When a branch of
the Ohio Life Insurance and Trust Company fails, news
that would formerly have taken weeks to criss cross the
nation, its impact diminishing with time is known within
hours, thanks to the telegraph. The news induces one of
the first waves of panic selling in the stock market.
The underlying cause of the recession is a downturn in
agricultural exports brought on by the end of the
Crimean War in Europe, as well as over-speculation in
railroads and real estate.
The First Annual Message
During the term of James Buchanan while in office as
President March 4,1857 to March 4, 1861.
Washington, December 8, 1857.
Volume: V Page: 436 (extract) "We have possessed
all the elements of material wealth in rich abundance,
and yet, notwithstanding all these advantages, our
country in its monetary interests is at the present
moment in a deplorable condition. In the midst of
unsurpassed plenty in all the productions of agriculture
and in all the elements of national wealth, we find our
manufactures suspended, our public works retarded, our
private enterprises of different kinds abandoned, and
thousands of useful laborers thrown out of employment
and reduced to want..
Volume: V Page: 437 (extract) "It is our duty to
inquire what has produced such unfortunate results and
whether their recurrence can be prevented. In all former
revulsions the blame might have been fairly attributed
to a variety of cooperating causes, but not so upon the
present occasion. It is apparent that our existing
misfortunes have proceeded solely from our extravagant
and vicious system of paper currency and bank credits,
exciting the people to wild speculations and gambling in
stocks. These revulsions must continue to recur at
successive intervals so long as the amount of the paper
currency and bank loans and discounts of the country
shall be left to the discretion of 1,400 irresponsible
banking institutions, which from the very law of their
nature will consult the interest of their stockholders
rather than the public welfare.
It is one of the highest and responsible duties of
Government to insure to the people a sound circulating
medium, the amount of which ought to be adapted with the
utmost possible wisdom and skill to the wants of
internal trade and foreign exchanges. If this be either
greatly above or greatly below the proper standard, the
marketable value of every man's Property is increased or
diminished in the same proportion, and injustice to
individuals as well as incalculable evils to the
community are the consequence.
Volume: V Page: 439 (extract) " From this
statement it is easy to account for our financial
history for the last forty years. It has been a history
of extravagant expansions in the business of the
country, followed by ruinous contractions. At successive
intervals the best and most enterprising men have been
tempted to their ruin by excessive bank loans of mere
paper credit, exciting them to extravagant importations
of foreign goods, wild speculations, and ruinous and
demoralizing stock gambling. When the crisis arrives, as
arrive it must, the banks can extend no relief to the
people. In a vain struggle to redeem their liabilities
in specie they are compelled to contract their loans and
their issues, and at last, in the hour of distress, when
their assistance is most needed, they and their debtors
together sink into insolvency.
It is this paper system of extravagant expansion,
raising the nominal price of every article far beyond
its real value when compared with the cost of similar
articles in countries whose circulation is wisely
regulated, which has prevented us from competing in our
own markets with foreign manufacturers, has produced
extravagant importations, and has counteracted the
effect of the large incidental protection afforded to
our domestic manufactures by the present revenue tariff.
But for this the branches of our manufactures composed
of raw materials, the production of our own
country--such as cotton, iron, and woolen
fabrics---would not only have acquired almost exclusive
possession of the home market, but would have created
for themselves a foreign market throughout the world.
Deplorable, however, as may be our present financial
condition, we may yet indulge in bright hopes for the
future. No other nation has ever existed which could
have endured such violent expansions and contractions of
paper credits without lasting injury; yet the buoyancy
of youth, the energies of our population, and the spirit
which never quails before difficulties will enable us
soon to recover from our present financial
embarrassments, and may even occasion us speedily to
forget the lesson which they have taught.
[Continue on next page]
|
|
|
|
