Atlantic Monthly | Page 2

excess or deficiency of money.[A] In France, as we know, the currency is almost entirely metallic, while in England it is metallic so far as the lesser exchanges of commerce are concerned; there is an obvious impropriety, therefore, in extending to the financial difficulties of those nations a theory founded upon a peculiarity in the position of our own.
[Footnote A: A failure of one half the cotton or wheat crop, we suspect, would play a considerable part among "the prices," whatever the state of the note circulation.]
If, however, it be alleged that the disturbances there are only a reaction from the disturbances here, we must say that that point is not clear, and Brother Jonathan may be exaggerating his commercial importance. The ties of all the maritime nations are growing more and more intimate every year, and the trouble of one is getting to be more and more the trouble of the others in consequence; but as yet any unsettled balance of American trade, compared with the whole trade of those nations, is but as the drop in the bucket. John Bull, with a productive industry of five thousand millions of dollars a year, and Johnny Crapaud, with an industry only less, are not both to be thrown flat on their backs by the failure of a few millions of money remittances from Jonathan. The houses immediately engaged in the American trade will suffer, and others again immediately dependent upon them; but the disturbing shock, as it spreads through the widening circle of the national trade, will very soon be dissipated and lost in its immensity. That is, it will be lost, if trade there is itself sound, and not tottering under the same or similar conditions of weakness which produced the original default in this country; in which event, we submit, our troubles are to be considered as the mere accidental occasion of the more general downfall,--while the real cause is to be sought in the internal state of the foreign nations. Accordingly, let any one read the late exposures of the methods in which business is transacted among the Glasgow banks, the London discount-houses, and the speculators of the French Bourse, and he will see at a glance that we Americans have no right to assume and ought not to be charged with the entire responsibility of this stupendous syncope. Our bankruptcy has aggravated, as our restoration will relieve the general effects; but the vicious currency on this side the water, whatever domestic sins it may have to answer for, cannot properly be made the scapegoat for the offences of the other side of the water. The disasters abroad have occurred under conditions of currency differing in many respects from our own, and we believe that if there had been no troubles in America, there would still have been considerable troubles in England and France, as, indeed, the financial writers of both these countries long ago predicted from the local signs.
The same train of remark may be applied to those who impute the existing embarrassments to our want of a protective tariff; for, granting that to be an adequate explanation of our own difficulties, it is not therefore an adequate explanation of those in Europe. The external characteristics of the phenomena before us are everywhere pretty much the same, namely,--a prosperous trade gradually slackening, an increasing demand for money, depreciation and sacrifice of securities, numerous failures, disappearance of gold, panic, and the complete stagnation of every branch of labor; and it should seem that the cause or causes to be assigned for them ought also to be everywhere pretty much the same. At any rate, no local cause is in itself to be regarded as sufficient, unless it can be shown that such local cause has a universal operation. But who will undertake to contend that the absence of a protective system here is enough to prostrate both Great Britain and France,--the nations which the same theory supposes to have been chiefly benefited by such deficiency? The scheme of free trade is often denounced by its opponents as British free trade; but we respectfully suggest that if its operations lead to so serious a destruction of British interests as is now alleged, the phrase is at least a misnomer. No! as the characteristics of the crisis are common to the United States, England, and France, so the causes of that crisis are to be sought in something which is also common to the United States, England, and France.
Now the one thing common to all these nations, and to all commercial nations, is the universal use of Credit, in the transactions of business. We conceive, therefore, that the existing condition of things may be most correctly and comprehensively described as a suspension of credit, and the consequent pressure for