help to these bad banks is so much im-America- the legal tender of the counpediment to future good banks; it is so try is supplied by the Government, much sacrifice of future good to avoid and the scarcity of it is an underlying present pain. We are trustees for the cause of the present confusion. A fixed future nation, and we must resist the cries of the present nation." But a "cast 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 impossibility. Though sound principle commands a 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. quantity of currency has been maintained in the face of a rapidly-augmenting trade, and in consequence money has been dear and prices have been depressed. Here, again, as Government caused the difficulty, it might be said that Government should cure, or, at least, alleviate it. But this would be said in error. This case is not on the same footing as the former one; the requirement of a fixed reserve is a questionable benefit, which might be temporarily foregone without disadvantThings will be "made age. But the non-increase of the inconpleasant" for the time, no matter how trovertible paper during an augmenting unpleasant they may be afterwards. The trade is the remedy, the painful but symptom will be abated, but the disease necessary remedy, by which that paper will be uncured. has gradually been raised much nearer to Under these difficult circumstances the level of gold than it was once. The President Grant appears to be acting application of that remedy cannot be invery fairly; probably as well as a person terrupted without serious evil; its progso placed can be expected to act. If he ress is necessary to the future welfare is not doing absolutely nothing, he is of the country. The present bad curdoing as little as he can. In two respects, rency is at the root of the American disindeed, his position is not quite so sim-asters, and till it is removed the country ple as it would at first sight appear. The is not safe from a recurrence of them. American Government, though it has But every additional "greenback" issued escaped the usual aggravations of a bank- at the present crisis is an interruption of ing panic, though its own money is safe, the remedy. If President Grant were though the currency is unsuspected, now, as he has been much urged, to issue nevertheless has difficulties of its own. a large number of new greenbacks, those Its legislation has been unusual, and that greenbacks would remain in circulation, legislation has had singular results. It and would, in part, undo the beneficial prescribed that the banks should keep a work which has been already done; they certain reserve, and the panic was inten- would augment the premium on gold, and sified because the public saw that the increase the depreciation of the paper. limit of that reserve was approached, if Against such demands President Grant not infringed. As this part of the evil has in the main been firm. He has was caused by the past action of the yielded only to this extent. There are in Government, there can be no objection the Treasury, as we have before exto its being retrieved by its present ac-plained, some 44,000,000 dols. of greention. President Grant has, therefore, backs, which once made part of the curvery reasonably connived at a temporary rency, but which were formerly withevasion of the law; it has been given out that the banks will not be required to make a statement for any date during the panic, and, therefore, it will not be known what is their precise reserve, but no one doubts that it is generally less than the prescribed proportion. This is most certain to be the case with the New York Banks which have also suspended, since the panic, their usual practice of publishing weekly statements. There is nothing against principle in this connivance; on the contrary, it is in accordance with It is important also to observe that, principle. In another respect, too, the just as the American Government is in a position of President Grant is difficult peculiarly advantageous position to do its and peculiar. The principal currency of duty, and to refrain from making ad drawn from it; a part, and only a part, of these withdrawn greenbacks have been re-issued at this crisis. Perhaps even this was contrary to principle, and the Government had better have abstained from it; but in such a moment-in a system of Government so popular, and after demands so urgent and prolongedfew Governments would have been so firm, few would not have deviated further from the strict letter of economical teaching. Governments must interfere; at a certain England and the safety of the banknote stage of the calamities, more or less ad- are not thoroughly distinguished. The vanced, they must give help for their own public mind but vaguely apprehends the sakes. They have deposited the pro- separation of the departments, and the ceeds of taxation with some bank, and simple case which the American Governthey must preserve that bank; they would ment is considering has never been bebe unable to defray their ordinary expen- fore us. What, then, in such circumditure, and to pay the national creditor if stances ought a Government to do? In that bank stops. Their money is part of our judgment its duty is exceedingly easy the money market, and therefore they to write on paper, and exceedingly hard must support the money market. But to effect in practice. There is the gravest the American Government is not thus in danger in its giving any kind of help; if the money market: it keeps its funds in possible, it ought to give no aid whatthe Treasury, and does not deposit them ever. Banking is a trade just like any in any bank. It can, therefore, consider other; the lending of money is as purely without bias (which most Governments mercantile a matter as cotton spinning or cannot) whether it ought to give or with- matchmaking. In this case, as in others, hold help in panic; it can consider the help to the bad competitor is harm to the permanent interest of the nation, and not good competitor. If you want not to its own momentary interest. In this re- have good cotton factories you have only spect the American panic is simpler than to subsidize the bad ones; you have only most panics, and in another, almost as to say that the Government will pay the important, it is also simpler. It is essen- bills of insolvent cotton spinners, and soltially a deposit panic; not a note panic. vent ones will not exist any more. In the There is no doubt about the currency. same way the greatest discouragement to Greenbacks, the inconvertible paper sound banking is a help to unsound. If issued by Government, are not suspected you always help bad banks out of the but hoarded; the national bank notes, difficulties, you will hardly ever have being secured by the deposits of un-banks which are not in difficulties. Faildoubted securities, are also in excellenture is the penalty which nature imposes credit. We have to consider only the on bad banking; and failure gets rid of duty of the Government to the banks, not its duty to the currency of the people. What, then, in such a panic ought such a Government to do? the bad bank. But if Government prevents the failure, it not only shares the penalty but continues the evil. The bad bank still exists, and is the more trusted In England we have never had this because it has been helped; as the Govprecise problem to consider. Our Government has helped it once, the public ernment has always been so placed that expect that the Government will help at last it must support the money market. it again. Probably the Bank itself Its money was deposited in the Bank of thinks so also; and having been saved England, and it could not permit the once from the natural penalties of Bank of England to fail. It is sometimes incaution it will not care much about imagined that the necessity for the in- being cautious again. Caution in banktervention of Government arises from ing, we must remember, means presthe Act of 1844. But this is a mistake. ent low profit; rashness means present It had to interfere in one way or another high profit. Banks helped by Governyears before the Act of 1844 was heard ment will always tend to be rash, and of; in 1797 it helped the Bank of Eng-take the present high profit, because they land by suspending the specie payment are exempt from the only reason which of the banknotes; in 1793 it issued Ex- would make them take the low prontchequer Bills itself; in 1825 it was on they are certain not to fail. the very verge of doing so again. Our These reasons are in argument perfectGovernment never could let the money ly conclusive; but we admit that it is market take care of itself," for it would most difficult for a Government to act on have lost its own money if it had. And them. The collapse of a large system of behind the banking panic there has al- banking causes so much evil, and that ways been in England the possibility that evil affects so many persons, that it is the convertibility of the banknote might, most difficult for a Government to be be endangered. Since the Act of 1844 this dread, no doubt irrational, is still, it is confessed, felt. The safety of the Banking Department of the Bank of passive in it. On every side it is pressed on to "do something," and it is most difficult to refuse. A" cast iron" Executive would refuse; it would say, "All help to these bad banks is so much im-America- the legal tender of the counpediment to future good banks; it is so try-is supplied by the Government, much sacrifice of future good to avoid and the scarcity of it is an underlying present pain. We are trustees for the cause of the present confusion. A fixed future nation, and we must resist the quantity of currency has been maintained cries of the present nation." But a "cast in the face of a rapidly-augmenting trade, iron" Executive like this is very difficult and in consequence money has been dear to find, and is especially difficult in free and prices have been depressed. Here, States. For an elected Government to again, as Government caused the diffideny the wishes of its electors is near to culty, it might be said that Government an impossibility. Though sound princi- should cure, or, at least, alleviate it. But ple commands a Government to give no this would be said in error. This case is aid at a great collapse of banking credit, not on the same footing as the former we do not expect that principle often to one; the requirement of a fixed reserve be obeyed. Much too often the present is a questionable benefit, which might be evil will be cured, though at the cost of temporarily foregone without disadvantgreater evil. Things will be "made age. But the non-increase of the inconpleasant" for the time, no matter how trovertible paper during an augmenting unpleasant they may be afterwards. The trade is the remedy, the painful but symptom will be abated, but the disease necessary remedy, by which that paper will be uncured. has gradually been raised much nearer to Under these difficult circumstances the level of gold than it was once. The President Grant appears to be acting application of that remedy cannot be invery fairly; probably as well as a person terrupted without serious evil; its progso placed can be expected to act. If he ress is necessary to the future welfare is not doing absolutely nothing, he is of the country. The present bad curdoing as little as he can. In two respects, rency is at the root of the American disindeed, his position is not quite so sim- asters, and till it is removed the country ple as it would at first sight appear. The is not safe from a recurrence of them. American Government, though it has But every additional "greenback" issued escaped the usual aggravations of a bank- at the present crisis is an interruption of ing panic, though its own money is safe, the remedy. If President Grant were though the currency is unsuspected, now, as he has been much urged, to issue nevertheless has difficulties of its own. a large number of new greenbacks, those Its legislation has been unusual, and that greenbacks would remain in circulation, legislation has had singular results. It and would, in part, undo the beneficial prescribed that the banks should keep a work which has been already done; they certain reserve, and the panic was inten- would augment the premium on gold, and sified because the public saw that the increase the depreciation of the paper. limit of that reserve was approached, if Against such demands President Grant not infringed. As this part of the evil has in the main been firm. He has was caused by the past action of the yielded only to this extent. There are in Government, there can be no objection the Treasury, as we have before ex -in a rency, but which were formerly with- to its being retrieved by its present ac-plained, some 44,000,000 dols. of greention. President Grant has, therefore, backs, which once made part of the curvery reasonably connived at a temporary evasion of the law; it has been given out that the banks will not be required to make a statement for any date during the panic, and, therefore, it will not be known what is their precise reserve, but no one doubts that it is generally less than the prescribed proportion. This is most certain to be the case with the New York Banks which have also suspended, since the panic, their usual practice of publishing weekly statements. There is nothing against principle in this connivance; on the contrary, it is in accordance with It is important also to observe that, principle. In another respect, too, the just as the American Government is in a position of President Grant is difficult peculiarly advantageous position to do its and peculiar. The principal currency of duty, and to refrain from making ad vances, it is in a peculiarly disadvanta- give, for example, such relief as the Bank geous position if it deviate from its strict of England gave in the panic of 1825duty and make those advances. A Gov- it must lend much, and it must lend on ernment like ours, or like the French all sorts of securities, by the discount of Government, has a skilled agent whom it bills, on the deposit of shares, and in all can trust to make them; the Bank of kinds of various ways. In most countries France or the Bank of England can safe- a Government would be much puzzled to ly lend at such junctures, while neither judge of such miscellaneous securities, Government could do so without great and at New York it would be puzzled alperil. It was partly from the conscious- most more than anywhere else, for such ness of this great difficulty that, in 1825 securities are there unusually treacherthe greatest of our panics the Eng- ous, and the borrowers are unusually delish Government itself refused to lend void of scruple. anything, but encouraged the Bank of England to lend to its last shilling. But the American Government has no similar resource; it has no skilled intermediary; it is face to face with the banks which have failed and with the nation which is distressed. It must itself lend all which has to be lent, and to give full relief to On the whole, therefore, we consider that up to the present time the American Government has performed with great discretion the difficult duties which devolve on a Government during a great panic, and we hope that it will to the end of that panic preserve the same discretion, and be able to act upon it. but this is quite insufficient. Rather cutting off the stagnant water should be looked to, and means taken to keep a current of pure, beautiful water in every street.” The next memorialist, with much less show of reason, proposes that for the future the Emperor should "have his hair dressed after the fashion of foreign ladies, and thus set a new fashion." "This is impossible," was the official rejoinder. "Let the letter be returned." Pall Mall. FEARS have of late been frequently expressed that the advisers of the Mikado of Japan have in their work of radical reform advanced so far ahead of their countrymen that they have incurred the danger of encouraging a reactionary movement. When the house mats common to every habitation were abolished, when the people were ordered to cut their hair in the European style, when the national religion was disestablished, when stray dogs were condemned to be shot, and when the temperature of the water at the public baths was regulated by Act of Parliament, lookers-on not unnaturally thought that the Government was outstepping the bounds of prudence. But Japanese ways are not as IN 1869, Mr. Church stated that he had our ways, and two memorials to the throne found copper to be the colouring-matter of the from citizens of Yedo which have recently red feathers of the "Plantain-eaters." This appeared show that the reforms which have was received rather doubtfully. Mr. Monteiro hitherto been introduced have but whetted writes to the Chemical News, stating that he the appetite of the people for more minute purchased some of those feathers in the marlegislation. One memorialist gravely ex-ket, at Sierra Leone, and that they have been presses a hope that on the first opportunity the Government would consider the best means of destroying the flies and mosquitoes which appear to abound in Yedo. By these insects, the writer goes on to say, "some poor people find their rest quite broken. The pests may seem small, but their poisonous action is great, and highly injurious to the public health. Some say, 'Use a mosquito net;'| analyzed by Mr. Henry Basset. The result being that 300 feathers gave 1045 turacin, and from 76 to 80 per cent. of metallic copper, thus confirming Mr. Church's results. Mr. Monteiro states that copper, as green malachite, is found extensively disseminated over a large extent of country, where these birds are common. IV. THE EMOTIONAL LANGUAGE OF THE FUTURE, Saturday Review, V. MARRIED LIFE IN CHINA, VI. SINGULARITY, . WAITING, 631 A CRY OF THE SPIRIT, 578 TRANSLATION OF MR. 578 640 PUBLISHED EVERY SATURDAY BY LITTELL & GAY, BOSTON. TERMS OF SUBSCRIPTION. For EIGHT DOLLARS, remitted directly to the Publishers, the LIVING AGE will be punctually forwarded for a year, free of postage. But we do not prepay postage on less than a year, nor when we have to pay commiss.on for torwarding the money; nor when we club the LIVING Age with another periodical. An extra copy of THE LIVING AGE is sent gratis to any one getting up a club of Five New Subscribers. Domittances should be made by bank draft or check, or by post-office money-order, if possible. If neither of these can be procured, the money should be sent in a registered letter. All postmasters are obliged to register letters whet. requested to do so. Drafts, checks and money-orders should be made payable to the order of LITTELL & GAY. |