money; and the depositories of that essential become, under his assaults, more and more meagre and tenuous. The managers of them at last get alarmed, and begin to withhold their issues of paper; which means that they begin to reduce their loans to the community. The money-market grows "tight," as it is phrased; the money-world feels generally as if it had taken an overdose of persimmons. Merchants and dealers, shorn of their usual accommodations, are compelled to borrow at ruinous usuries, or to fail to meet their payments. Their default involves others; others fail, and others again. The bowels of the banks, with us the great money-lenders, close with the snap and tenacity of steel-traps; and then a general panic, or want of commercial confidence, brings on a paralysis of the domestic exchanges, and wide-spread bankruptcy and ruin. Importations are checked, of course; but they are checked in a sharp, rapid, and violent way, accompanied by the most painful embarrassments and convulsions.
This we believe to be an outline of the history of all our commercial catastrophes, stripped of those local and incidental circumstances which vary from time to time: over-issues of money,—speculative prosperity,—all the world getting rich in the most agreeable manner,—fairy palaces rising on all sides, without the sound of trowel or hammer; then,—the day of adjustment,—the rapid contraction of the currency,—all the world getting poor in the most drastic and disagreeable manner,—and those fairy palaces, which rose under our very eyelids over-night, vanishing, like the palace of Aladdin from the vision of the Grand-Seignior after he awoke in the morning. But, alas! the revulsion does not stop with the overthrow of the palaces which had been reared without labor; it is not satisfied with the dissipation of mere fancies and dreams; but, being itself a most real thing, it carries with it many a stately structure, which the toil, the economy, the self-denial of years had hardly raised. Extraneous causes,—a short crop,—a reduced tariff,—a peculiar mania of enterprise,—may hasten or retard the various steps of the process which has been described; but its cause and its course are almost always the same, and the discerning eye may easily detect them, from the beginning to the end of our modern commercial experience. In the existing difficulties, in this country, the railroad speculations have had much to do with producing and aggravating the effect; but the primary source of it, we think, is to be found in the ease with which our currency is inflated, under a banking system which varies from State to State, and which, outside of New England and New York, where it is by no means perfect, is as bungling a contrivance, for the ends to be answered, as was ever inflicted on the patience of mankind. Much of the trouble is due also to the extravagance and reckless waste of our people, which, though owing in some degree to our want of good manners and good taste, are directly traceable to the stimulus given to expense by the over-issue of artificial money. While the paper which passes for money is plenty, and every man can easily get "accommodations" from the banks, we squander without thought. No matter how costly the articles we buy; the expansion of the currency is greater than the rise in market values; and it is only when the contraction comes that we see how foolishly lavish we have been.
What, then, is the remedy? "Why, away with paper currency altogether!" says one. Yes,—tear up your Croton-water-pipes, because the breaking of a main sometimes submerges your dwellings; destroy your railroads, because the trains sometimes run off the track; arrest your steamships, because an "Arctic" and a "Central America" go disastrously down into the deep, deep sea! That were not wise, surely; that were very unwise, even were it possible, which it is not.—"Give us a high protective tariff," says another. Most certainly, friend, if we are to be perpetually flooded with paper,
